InvestMacro

The EUR/USD currency pair

• Prev Open: 1.0497
• Prev Close: 1.0541
• % chg. over the last day: +0.42%

A recent US consumer poll released by the University of Michigan on Friday showed that many Americans believe the Fed will have a hard time ensuring a soft landing of the economy due to the planned aggressive rate hikes. The Federal Reserve will almost certainly approve a rate increase of 50 basis points, or 0.5%, this week. Traders are also predicting a 75 basis point hike at the June meeting.

• Support levels: 1.0453
• Resistance levels: 1.0580, 1.0633, 1.0770, 1.0796, 1.0870, 1.0908, 1.0936

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. The price reached the support level and is trading flat now. The MACD indicator has become inactive. Under such market conditions, traders can look for sell deals from the resistance level of 1.0633, but only after the additional confirmation. Buy trades can be considered on intraday timeframes from the support level of 1.0453, but only with short targets and confirmation.

Alternative scenario: if the price breaks out through the 1.0770 resistance level and fixes above, the uptrend will likely resume.

• – German Retail Sales (m/m) at 09:00 (GMT+3);
• – Spanish Manufacturing PMI (m/m) at 10:15 (GMT+3);
• – Italian Manufacturing PMI (m/m) at 10:45 (GMT+3);
• – French Manufacturing PMI (m/m) at 10:50 (GMT+3);
• – German Manufacturing PMI (m/m) at 10:55 (GMT+3);
• – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
• – US ISM Manufacturing PMI (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2552
• Prev Close: 1.2571
• % chg. over the last day: +0.15%

Bank of England Governor Andrew Bailey said the central bank was on a “very narrow margin” between curbing inflation, which is 7%, three times higher than the target, and preventing a recession. A quarter-point rate hike to 1% would satisfy the precondition for the Bank of England to start actively selling its bonds. Active bond selling will tighten monetary conditions but could hurt the economy.

• Support levels: 1.2502, 1.2438
• Resistance levels: 1.2670, 1.2791, 1.2862, 1.2917, 1.2981, 1.3010, 1.3083, 1.3115

On the hourly time frame, the GBP/USD currency pair trend is still bearish. The price reached the support level and is trading flat now. The MACD indicator has become inactive. Under such market conditions, sell trades should be looked for from the resistance level of 1.2670, but with confirmation. For buy deals, traders may consider the level of 1.2502, but only with short targets.

Alternative scenario: if the price breaks down through the 1.2863 resistance level and fixes above, the mid-term uptrend will likely be resumed.

The USD/JPY currency pair

• Prev Open: 130.84
• Prev Close: 129.85
• % chg. over the last day: -0.76%

The fundamental picture of the USD/JPY currency pair remains unchanged. Central banks’ monetary policy in the US and Japan is the opposite. The central bank of Japan is still aiming for ultra-soft conditions, while the US Federal Reserve is aggressively tightening monetary policy. Bank of Japan Governor Haruhiko Kuroda still sees the yen’s weakness as a positive for Japan. However, policymakers fear the yen at a 20-year low will suffer from more expensive food and fuel. The survey found that half of the Japanese companies expect higher costs to affect their profits. There are no prerequisites for a medium-term trend reversal yet. But traders should keep in mind that markets are pricing in future scenarios, so any verbal information about monetary policy changes can lead to radical corrective action.

• Support levels: 129.10, 128.51, 127.24, 126.91, 125.48, 124.66, 122.97
• Resistance levels: 130.85

The medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator has become inactive, and the buyers’ pressure has decreased. Under such market conditions, it is best to look for buy deals, expecting the continuation of the uptrend, but only after a pullback, as the price has strongly deviated from the average values. First of all, it is worth considering the support level of 129.10 or 128.51, but with additional confirmation. A resistance level of 130.85 may be considered for sell deals, but only with short targets.

Alternative scenario: If the price fixes below 126.91, the uptrend will likely be broken.

• – Japan Manufacturing PMI (m/m) at 03:30 (GMT+3).

The USD/CAD currency pair

• Prev Open: 1.2804
• Prev Close: 1.2858
• % chg. over the last day: +0.42%

Economic growth in Canada has reached its annual high. On Friday, Statistics Canada reported real gross domestic product increased by 1.1% last month, the largest monthly gain since March 2021. This is the ninth consecutive monthly gain. In early April, the central bank raised the key interest rate by 0.5% for the first time in more than 20 years and warned that more rate hikes are coming, but analysts believe the next hikes will be 0.25% each. But last week, Bank of England Governor Tiff Macklem told a House of Commons committee that the bank would consider taking another 50 basis point step.

• Support levels: 1.2751, 1.2684, 1.2644, 1.2607, 1.2521
• Resistance levels: 1.2852

In terms of technical analysis, the USD/CAD currency pair is bullish. The MACD indicator became positive, and the buyer’s pressure increased again. Trade is worth it only with short targets. Under such market conditions, it is better to look for buy trades on the lower timeframes from the support level of 1.2571, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2852, but it is also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates below 1.2644, the downtrend will likely be resumed.

• – Canada Manufacturing PMI (m/m) at 16:30 (GMT+3).

The EUR/USD currency pair

• Prev Open: 1.0559
• Prev Close: 1.0497
• % chg. over the last day: -0.59%

In April, the annual inflation rate in Germany reached a record high of 7.8%. In contrast, Spain’s annual inflation rate fell from 9.8% to 8.4%, indicating that the Spanish economy is not as tied to Russia’s energy resources as the German economy. Several other European countries will report inflation today, and the overall figure for the Eurozone will be published. Analysts expect annual inflation in the Eurozone to be 7.5% (currently 7.4%). If the CPI turns out worse than expected, the euro could rise sharply amid expectations of faster monetary policy tightening by the ECB.

• Support levels: 1.0453
• Resistance levels: 1.0580, 1.0633, 1.0770, 1.0796, 1.0870, 1.0908, 1.0936

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. Growth in the dollar index led to the fall of the European currency. The MACD indicator is in the negative zone, selling pressure remains, but the divergence is increasing. Under such market conditions, traders can look for sell deals from the resistance levels of 1.0580 or 1.0633, but only after the additional confirmation. Buy trades can be considered on intraday timeframes from the support level of 1.0453, but only with short targets and confirmation.

Alternative scenario: if the price breaks out through the 1.0770 resistance level and fixes above, the uptrend will likely resume.

• – Eurozone French Consumer Price Index (m/m) at 09:45 (GMT+2);
• – Eurozone German GDP (q/q) at 11:00 (GMT+2);
• – Eurozone Italian Consumer Price Index (m/m) at 12:0  (GMT+2);
• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+2);
• – Eurozone GDP (q/q) at 12:00 (GMT+2);
• – US PCE price index (m/m) at 15:30 (GMT+2);
• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.2543
• Prev Close: 1.2453
• % chg. over the last day: -0.72%

The widening interest rate differential between the US and other countries, the risks of a global recession, and war in Ukraine are strengthening confidence in the dollar. In turn, the UK economy is going into “stagflation” (lower economic growth with high inflation). All of this leads to the fall of the British pound against the dollar.

• Support levels: 1.2438
• Resistance levels: 1.2670, 1.2791, 1.2862, 1.2917, 1.2981, 1.3010, 1.3083, 1.3115

On the hourly time frame, the GBP/USD currency pair trend is still bearish. The MACD indicator is in the negative zone, selling pressure remains, but the divergence is increasing. The price has reached the daily support level. Under such market conditions, sell trades should be looked for from the resistance level of 1.2670, but with confirmation. For buy deals, traders may consider the level of 1.2438, but only after the appearance of a bullish initiative and with short targets.

Alternative scenario: if the price breaks down through the 1.2863 resistance level and fixes above, the mid-term uptrend will likely be resumed.

The USD/JPY currency pair

• Prev Open: 128.41
• Prev Close: 130.83
• % chg. over the last day: +1.88%

The Japanese yen fell below 130 per dollar for the first time in 20 years as the Bank of Japan doubled its bond-buying rate. On Thursday, the Bank of Japan decided to keep monetary policy unchanged despite a weaker yen and rising inflationary pressures due to higher import costs. This contributes to another round of weakening of the Japanese yen. It’s a bank holiday in Japan today.

• Support levels: 129.10, 128.51, 127.24, 126.91, 125.48, 124.66, 122.97
• Resistance levels: 130.85

The medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator is positive again, and the buying pressure has increased. Under such market conditions, it is best to look for buy deals, expecting the continuation of the uptrend, but only after a pullback, as the price has strongly deviated from the average values. First of all, it is worth considering the support level of 129.10 or 128.51, but with additional confirmation. A resistance level of 130.85 may be considered for sell deals, but only with short targets.

Alternative scenario: If the price fixes below 126.91, the uptrend will likely be broken.

The USD/CAD currency pair

• Prev Open: 1.2818
• Prev Close: 1.2806
• % chg. over the last day: -0.09%

On Thursday, Canada’s most populous province of Ontario projected a steady decline in the deficit in the medium term due to a strong economic recovery and predicted a return to surplus by 2027-2028. This is a good sign for the Canadian currency. But it should be noted that the Canadian dollar is a commodity currency and also strongly dependent on the dynamics of oil prices and the dollar index. The dollar index is rising along with oil prices. As a result, the USD/CAD currency pair is trading without significant changes. Currently, the USD/CAD has no fundamental prerequisites for a medium-term trend as rising oil prices, along with the Bank of Canada’s plans to raise interest rates, will strengthen the Canadian dollar.

• Support levels: 1.2745, 1.2644, 1.2607, 1.2521
• Resistance levels: 1.2852

The USD/CAD currency pair is bullish in terms of technical analysis. The MACD indicator became negative, and the price began to correct to the average values. Trade is worth it only with short targets. Under such market conditions, it is better to look for buy trades on the lower timeframes from the support level of 1.2745 or 1.2644, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2852, but it is also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates below 1.2607, the downtrend will likely be resumed.

• – Canada GDP (m/m) at 15:30 (GMT+2).

The EUR/USD currency pair

• Prev Open: 1.0636
• Prev Close: 1.0558
• % chg. over the last day: -0.74%

Traders now expect the Fed to raise rates by 50 basis points at each of the next three meetings as the US central bank struggles to fight inflation well above its 2% target. The hawkish remarks by Powell and other Fed members have sparked rumors that a much higher level of 75 basis points will also be considered. Nevertheless, many analysts believe that the Fed’s aggressiveness is already in the prices. This means that when the official data is released, the dollar, on the contrary, may fall.

• Support levels: 1.0453
• Resistance levels: 1.0699, 1.0770, 1.0796, 1.0870, 1.0908, 1.0936

From the technical point of view, the EUR/USD currency pair trend on the hourly time frame is bearish. Growth in the dollar index led to the fall of the European currency. The MACD indicator is in the negative zone, selling pressure remains, but divergence has appeared. Under such market conditions, traders can look for sell deals from the resistance level of 1.0699, but only after the additional confirmation. Buy trades can be considered on intraday timeframes from the support level of 1.0453, but only with short targets and confirmation.

Alternative scenario: if the price breaks out through the 1.0770 resistance level and fixes above, the uptrend will likely resume.

• – Eurozone Spanish Consumer Price Index (m/m) at 10:00 (GMT+2);
• – Eurozone ECB Economic Bulletin (m/m) at 11:00 (GMT+2);
• – Eurozone German Consumer Price Index (m/m) at 15:00 (GMT+2);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
• – US GDP (q/q) at 15:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.2573
• Prev Close: 1.2545
• % chg. over the last day: -0.22%

The pound sterling fell to a 21-month low against the dollar amid rising fears over the UK economic outlook. The UK government borrowing in the recently ended 2021/22 fiscal year was almost 20% higher than the country’s budget office forecast last month. This underscored the problem for Finance Minister Rishi Sunak, who is forced to provide new aid to households and businesses affected by rising inflation.

• Support levels: 1.2438
• Resistance levels: 1.2670, 1.2791, 1.2862, 1.2917, 1.2981, 1.3010, 1.3083, 1.3115

On the hourly time frame, the GBP/USD currency pair trend is still bearish. Growth in the dollar index led to the fall of the British pound. The MACD indicator is in the negative zone, selling pressure remains, but the divergence is increasing. The price has reached the daily support level. Under such market conditions, sell trades should be looked for from the resistance level of 1.2670, but with confirmation. For buy deals, traders may consider the level of 1.2438, but only after the appearance of a bullish initiative and with short targets.

Alternative scenario: if the price breaks down through the 1.2863 resistance level and fixes above, the mid-term uptrend will likely be resumed.

The USD/JPY currency pair

• Prev Open: 127.21
• Prev Close: 128.42
• % chg. over the last day: +0.95%

On Thursday, the Bank of Japan decided to maintain its monetary policy despite the weakening yen and rising inflationary pressures due to higher import costs. Japan is a major energy importer, and sustained increases in gas and oil prices undermine Japan’s trade conditions. The central bank’s board has decided to maintain its overall monetary policy, setting 10-year rates at around zero and short-term rates at -0.1%, reaffirming its commitment to unlimited government bond purchases. Thus, it may contribute to the next round of Japanese yen weakness.

• Support levels: 128.87, 128.51, 127.24, 126.91, 125.48, 124.66, 122.97
• Resistance levels: 130.85

The medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator is positive again, and the buying pressure has increased. Under such market conditions, it is best to look for buy deals, expecting the continuation of the uptrend, but only after a pullback, as the price has strongly deviated from the average values. First of all, it is worth considering the support level of 128.87 or 128.51, but with additional confirmation. A resistance level of 130.85 may be considered for sell deals, but only with short targets.

Alternative scenario: If the price fixes below 126.91, the uptrend will likely be broken.

• – Japan Retail Sales (m/m) at 02:50 (GMT+2);
• – Japan BoJ Monetary Policy Statement at 06:00 (GMT+2);
• – Japan BoJ Interest Rate Decision at 06:00 (GMT+2);
• – Japan BoJ Outlook Report at 06:00 (GMT+2);
• – Japan BoJ Press Conference (tentative).

The USD/CAD currency pair

• Prev Open: 1.2818
• Prev Close: 1.2816
• % chg. over the last day: -0.02%

The Canadian dollar is a commodity currency and is highly dependent on the oil price movements and the dollar index. The dollar index is growing along with oil quotes. As a result, the USD/CAD currency pair is trading without significant changes. Currently, the USD/CAD currency pair has no fundamental prerequisites for a medium-term trend as rising oil prices, together with the Bank of Canada’s plans to raise interest rates, will strengthen the Canadian dollar.

• Support levels: 1.2745, 1.2644, 1.2607, 1.2521
• Resistance levels: 1.2852

The USD/CAD currency pair is bullish in terms of technical analysis. The MACD indicator remained positive, but the divergence increased. Trade is worth it only with short targets. Under such market conditions, it is better to look for buy trades on the lower timeframes from the support level of 1.2745 or 1.2644, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2852, but it is also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates below 1.2607, the downtrend will likely be resumed.

• – Canada BOC Gov Macklem Speaks at 01:30 (GMT+2).