InvestMacro

The EUR/USD currency pair

• Prev Open: 1.0896
• Prev Close: 1.1075
• % chg. over the last day: +1.64%

Yesterday, the European currency showed the sharpest daily jump in almost six years after it became known that the foreign ministers of Ukraine and Russia will hold negotiations in Turkey today. The ECB will hold a meeting on monetary policy and an interest rate decision. Analysts believe that amid the war in Ukraine, the ECB will not change anything in monetary policy.

• Support levels: 1.0993, 1.0930, 1.0823
• Resistance levels: 1.1065, 1.1144, 1.1291

From the technical point of view, the EUR/USD currency pair trend on the hourly time frame is bearish, but there are signs that the price may change a priority. The MACD indicator has become positive. The price has adopted the structure of sideways movement with a wide range. In such market conditions, it is better to look for sell trades on the intraday time frames from the resistance level of 1.1065. Buy trades can be looked at from the support of 1.0993 or 1.0930, but only with short targets since there is no fundamental reason for the Euro to strengthen right now.

Alternative scenario: if the price breaks out through the 1.1065 resistance level and fixes above, the mid-term uptrend will likely resume.

• – Eurozone ECB Monetary Policy Statement at 14:45 (GMT+2);
• – Eurozone ECB Interest Rate Decision at 14:45 (GMT+2);
• – Eurozone ECB Press Conference at 15:30 (GMT+2);
• – US Consumer Price Index (m/m) at 15:30 (GMT+2);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3099
• Prev Close: 1.3186
• % chg. over the last day: +0.66%

There are no major economic events related to the UK this week, so the British pound has remained stable in recent days. Today, the US publishes data on consumer inflation, which could significantly shake the dollar, as analysts expect another acceleration of inflation in the United States. If the actual value is worse than expected, the dollar index could strengthen sharply, and the next week’s Fed meeting is likely to decide on a more aggressive increase in interest rates. A rise in the dollar index will cause the GBP/USD to fall. If the real inflation value turns out to be better than expected, the opposite may happen – a decrease in the dollar index and an increase of GBP/USD.

• Support levels: 1.3127, 1.3091
• Resistance levels: 1.3274, 1.3315, 1.3418

On the hourly time frame, the trend on the GBP/USD currency pair is bearish. Volatility is high, sellers’ pressure has stopped, the price started trading in a sideways range. The MACD indicator has become positive. Under such market conditions, buy trades should be considered from the support level of 1.3127, but better with confirmation. For sell deals, there are no optimal entry points now.

Alternative scenario: if the price breaks out through the 1.3275 resistance level and fixes above, the mid-term uptrend will likely resume.

The USD/JPY currency pair

• Prev Open: 115.67
• Prev Close: 115.86
• % chg. over the last day: +0.16%

The monetary policy of the central bank of Japan is now aimed at making the Japanese yen cheaper (USD/JPY growth), and the US Federal Reserve will begin to tighten monetary policy this month. Therefore, investors often transfer their funds to the yen in case of any panic moods in the market.

• Support levels: 115.89, 115.41, 115.13, 114.71, 114.41
• Resistance levels: 116.32

The medium-term trend on the USD/JPY currency pair is bullish. The MACD indicator is in the positive zone, but there are signs of divergence. Under such market conditions, it is best to look for buy deals on the lower time frames from the support level of 115.89, but with additional confirmation. Sell deals may be considered from the resistance level of 116.32, but it is better to wait for the reaction of sellers.

Alternative scenario: if the price fixes below 115.41, the uptrend will likely be broken.

• – Japan Producer Price Index (m/m) at 01:50 (GMT+2).

The USD/CAD currency pair

• Prev Open: 1.2885
• Prev Close: 1.2805
• % chg. over the last day: -0.62%

The Canadian dollar is a commodity currency, so it is highly dependent not only on the monetary policy of the Bank of Canada but also on the dynamics of oil prices and the dollar index. The dollar index fell yesterday, while oil showed its biggest drop in almost two years after the United Arab Emirates, a member of the Organization of Petroleum Exporting Countries and their allies (OPEC+), said it would support increased production. This situation led to a sharp decline in USD/CAD quotes.

• Support levels: 1.2790, 1.2653, 1.2555, 1.2517
• Resistance levels: 1.2871, 1.2890

From a technical point of view, the USD/CAD currency pair trend is bullish. The price trades between the moving averages, indicating a more flat structure within a bullish trend. It is worth trading only with short targets, as both oil and the dollar index are still fundamentally inclined to rise. Under such market conditions, it is better to look for buy trades on lower time frames from the support level of 1.2790, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2871.

Alternative scenario: if the price breaks through and consolidates below 1.2726, the downtrend will likely resume.

The EUR/USD currency pair

• Prev Open: 1.0853
• Prev Close: 1.0896
• % chg. over the last day: +0.39%

The European currency has stopped falling as European countries want to issue new EU bonds. Europe is approaching stagflation. This is when economic growth starts to slow down when inflation is high. The sanctions imposed on Russia due to the invasion of Ukraine are also hitting the European economy hard, and it is currently not possible to entirely replace gas and oil supplies from Russia.

• Support levels: 1.0893, 1.0823, 1.0633
• Resistance levels: 1.1001, 1.1061, 1.1213

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. The MACD indicator has become positive. The price has taken the sideways structure. Under such market conditions, it is better to look for sell deals on the intraday time frames from the resistance level of 1.1001. Buy deals should be considered from the support level of 1.0893, but only with short targets, as there are no fundamental reasons for the euro to strengthen now.

Alternative scenario: if the price breaks out through the 1.1061 resistance level and fixes above, the mid-term uptrend will likely resume.

• – US JOLTS Job Openings (m/m) at 17:00 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.3105
• Prev Close: 1.3099
• % chg. over the last day: -0.05%

The British pound is now trading at its lowest level since December 2020. Despite Brexit, the UK economy is still strongly integrated into the European Union economy, so rising energy prices and sanctions against Russia have a negative impact on the British national currency. But on the other hand, thanks to the same Brexit and the fact that the Bank of England is tightening monetary policy, the UK will suffer the least from stagflation.

• Support levels: 1.3091
• Resistance levels: 1.3175, 1.3274, 1.3315, 1.3418

On the hourly time frame, the trend on the GBP/USD currency pair is bearish. Volatility is high, sellers’ pressure has stopped, the price started trading in a sideways range. The MACD indicator is showing a divergence towards buying. Under such market conditions, buy trades should be considered from the 1.3091 daily support level, but better with confirmation. The resistance level of 1.3175 is good for sell deals, but only with additional confirmation in the form of sellers’ initiative.

Alternative scenario: if the price breaks out through the 1.3315 resistance level and fixes above, the mid-term uptrend will likely resume.

The USD/JPY currency pair

• Prev Open: 115.32
• Prev Close: 115.67
• % chg. over the last day: +0.30%

Japan’s GDP increased by 1.1% in the last quarter, against expectations of 1.3% growth. The Japanese yen and the US dollar are safe-haven currencies. Since there are currently no prospects for ending the war in Ukraine, investors are buying the yen as a protective asset against inflationary risks. At the same time, it should be remembered that the policy of the Japanese central bank is now aimed at making the Japanese yen cheaper (USD/JPY growth), and the US Federal Reserve will begin to tighten monetary policy this month. As a result, the USD/JPY currency pair is now trading in a wide price range with growth elements.

• Support levels: 115.13, 114.71, 114.41
• Resistance levels: 115.79, 116.32

The medium-term trend on the USD/JPY currency pair is bullish, but the structure is flatter, as the price has no single dynamics and the price is trading in a wide corridor. The MACD indicator has become positive, with long positions prevailing inside the day. But there are first signs of divergence. Under such market conditions, it is best to look for buy deals on the lower time frames from the support level of 115.13, but with additional confirmation. Sell deals should be considered from the resistance level of 115.79, but it is better to wait for the reaction of sellers.

Alternative scenario: if the price fixes below 115.13, the uptrend will likely be broken.

• – Japan GDP (q/q) at 01:50 (GMT+2).

The USD/CAD currency pair

• Prev Open: 1.2819
• Prev Close: 1.2889
• % chg. over the last day: +0.55%

The situation on the USD/CAD currency pair remains the same. The Canadian dollar is a commodity currency, so it is highly dependent not only on the monetary policy of the Bank of Canada but also on the dynamics of oil prices and the dollar index. Investors buy the dollar index as a defensive asset in the war. Moreover, this month the Fed will begin tightening its monetary policy, providing additional support to the US currency. The growth of the dollar index leads to the growth of USD/CAD. However, it should be noted that the Bank of Canada has already begun to raise interest rates, and this, along with rising energy prices, will also help the Canadian currency.

• Support levels: 1.2820, 1.2726, 1.2653, 1.2555, 1.2517
• Resistance levels: 1.2890

In terms of technical analysis, the USD/CAD currency pair trend is bullish. The price is trading above the moving average lines, with long positions prevailing inside the day. The MACD indicator is in the positive zone, but the first signs of divergence are shown, which means the growth potential is limited. It is worth trading only with short targets because both oil and the dollar index are inclined to grow now. Under such market conditions, it is better to look for buy deals on the lower time frames from the support level of 1.2820, but it is better with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2890.

Alternative scenario: if the price breaks through and consolidates below 1.2726, the downtrend will likely resume.

• – US Crude Oil Reserves (w/w) at 17:30 (GMT+2).