InvestMacro

The EUR/USD currency pair

• Prev Open: 1.0708
• Prev Close: 1.0737
• % chg. over the last day: +0.27 %

Germany’s inflation rate increased from 8.6% to 8.7% (forecast 8.9%) annually. Despite the fact that the data was better than forecasted, the rising inflation is not a pleasant factor in itself, especially for the largest economy in the region. Although the outlook for the eurozone has improved in recent months, many Wall Street analysts still believe a shallow recession will materialize later this year. Weak economic data in the coming weeks may limit the euro’s potential to grow in the short term.

• Support levels: 1.0710, 1.0650, 1.0597
• Resistance levels: 1.0838, 1.0906, 1.0926, 1.0967, 1.1017, 1.1077

The trend on the EUR/USD currency pair on the hourly time frame is bearish. The price is still forming a corridor. But the false breakdown zone below 1.0710 works as support and does not allow the price to go lower. The MACD indicator has become inactive, and volatility has decreased. Under such market conditions, buy trades are best considered from the support level of 1.0710, but with confirmation since the level has already been tested. Sell deals can be considered from the resistance level of 1.0838, but better with confirmation in the form of a reverse initiative.

Alternative scenario: if the price breaks down through the resistance level of 1.0967 and fixes above it, the uptrend will likely resume.

• – US Michigan Consumer Sentiment (m/m) at 17:00 (GMT+2);
• – US FOMC Member Waller Speaks at 19:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.2057
• Prev Close: 1.2117
• % chg. over the last day: +0.50 %

The British pound has been showing growth in recent days and looks more confident than the euro. Last month’s minutes of the Bank of England’s Monetary Policy Committee (MPC) meeting showed that some policymakers are still set for another rate hike in March as they warn of rising risks to UK inflation. Meanwhile, the Bank of England expects inflation to start falling rapidly from mid-2023 and reach about 4% by the end of the year. Today, the UK will publish GDP data for the quarter as well as data on industrial production levels. A strong reading may give sterling confidence against the dollar and other currencies.

• Support levels: 1.2073, 1.2000, 1.1930
• Resistance levels: 1.2202, 1.2147, 1.2202, 1.2311, 1.2416

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. Yesterday the price reached the “premium” area but did not reach the resistance level. Statistically, about 70% of reversals occur in this zone. At the moment, the price is trading at the level of the moving averages. The MACD indicator has become inactive. Under such market conditions, it is better to look for buy deals on intraday time frames from the support level of 1.2073 or 1.2000, but with confirmation in the form of an impulse initiative. Sell trades are best sought after a pullback from the resistance level of 1.2202 but are also better with confirmation in the form of a reverse initiative.

Alternative scenario: if the price breaks out through the 1.2416 resistance level and fixes above it, the uptrend will likely resume.

• – UK GDP (q/q) at 09:00 (GMT+2);
• – UK Industrial Production (m/m) at 09:00 (GMT+2);
• – UK Manufacturing Production (m/m) at 09:00 (GMT+2).

The USD/JPY currency pair

• Prev Open: 131.40
• Prev Close: 131.51
• % chg. over the last day: +0.08 %

Bank of Japan Governor Haruhiko Kuroda said yesterday that the benefits of the soft monetary policy outweigh any other side effects on the economy, failing to boost wages over the past decade. Kuroda believes that the soft monetary policy should continue after the change in the governor of the Bank of Japan. But that will be up to the new governor, who will be chosen this month and appointed in April 2023. The Producer Price Index, which measures inflation between plants and factories, has declined from 10.5% to 9.5% year-over-year, the first sign of declining inflation.

• Support levels: 131.09, 130.34, 129.68, 129.98, 129.19, 129.04, 128.16
• Resistance levels: 131.58, 132.95, 133.23

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. Yesterday the price tested the support level of 130.34 in the “discount” zone. The MACD indicator is in the positive area, and there is slight buying pressure. It is better to look for buy deals from the support level of 131.09, but only with confirmation on the lower time frames. Sell positions can be searched from the resistance level of 131.59, but it is also better with confirmation in the form of reverse initiative.

Alternative scenario: If the price fixes below the support level of 128.16, the downtrend will be renewed with a high probability.

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

The USD/CAD currency pair

• Prev Open: 1.3439
• Prev Close: 1.3454
• % chg. over the last day: +0.11 %

At the Bank of Canada’s latest interest rate meeting, it became clear that the Bank of Canada may have held the last rate hike of the year. Overall inflation was down from a June peak of 6.2%, and December inflation was 5.4%. The short-term interest rate markets see interest rates unchanged for the rest of the year. Canada’s labor market data will be released today. The employment change is expected to show an increase of 15,000 jobs from the previous figure of 104,000. Unemployment is also projected to rise to 5.1%, and average hourly earnings to fall to 5.2%. If the labor market data is negative, the Canadian dollar may lose some ground, especially if oil prices are also down.

• Support levels: 1.3421, 1.3333, 1.3295, 1.3212
• Resistance levels: 1.3472, 1.3496, 1.3520, 1.3554, 1.3595

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is forming a wide-volatile sideways. The MACD indicator is positive again, but there are signs of divergence. Sell positions should be considered from the resistance level 1.3472, but on the condition of a false breakout, as the level has already been tested. Buy trades can be considered from the support level of 1.3421 but with additional confirmation in the form of an impulse initiative.

Alternative scenario: if the price breaks down and consolidates below the support level of 1.3263, the downtrend will likely resume.

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

The EUR/USD currency pair

• Prev Open: 1.0720
• Prev Close: 1.0713
• % chg. over the last day: -0.06 %

According to the ECB Governing Council spokesman Martins Kazaks, the central bank should raise interest rates to levels that will “significantly” constrain the economy. At the same time, the politician added that rate hikes might have to be maintained after the March meeting. That said, the peak in borrowing costs will have to be maintained for some time to ensure that the eurozone’s strongest price spike is subdued. Analysts are predicting that the ECB will raise the rate by 0.5% at the March meeting and a 0.25% rate hike in May.

• Support levels: 1.0710, 1.0650, 1.0597
• Resistance levels: 1.0838, 1.0906, 1.0926, 1.0967, 1.1017, 1.1077

The trend on the EUR/USD currency pair on the hourly time frame is bearish. The price is forming a narrow corridor. But the false breakdown zone below 1.0710 works as support and does not let the price go lower. The MACD indicator has become inactive, and sellers’ pressure is weak. Under such market conditions, buy trades are best considered from the support level of 1.0710, but with confirmation since the level has already been tested. Sell deals can be considered from the resistance level of 1.0838, but better with confirmation in the form of a reverse initiative.

Alternative scenario: if the price breaks down through the resistance level of 1.0967 and fixes above it, the uptrend will likely resume.

• – German Consumer Price Index at 09:00 (GMT+2);
• – Eurozone Economic Forecasts (m/m) at 12:00 (GMT+2);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.2037
• Prev Close: 1.2070
• % chg. over the last day: +0.27 %

Strikes remain a problem for the UK government. On March 15, civil servants are planning another strike. On the same day, Chancellor of the Exchequer Jeremy Hunt will present his financial plan, and there will be additional pressure to revise payroll requests possibly. Since the strike is undermining the UK economy, this is a negative for the British currency. Friday’s GDP data may serve as an additional catalyst for price movement.

• Support levels: 1.2059, 1.2000, 1.1930
• Resistance levels: 1.2147, 1.2202, 1.2311, 1.2416

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The price is trading at the level of the moving averages. A false breakdown zone was formed below the level of 1.2000. The MACD indicator has become positive. Under such market conditions, it is better to look for buy deals on intraday time frames from the support level of 1.2059 or 1.2000, but with a confirmation in the form of an impulse initiative. It is best to look for sell deals after a pullback. The best resistance levels are 1.2147 and 1.2202, but it is also better with a confirmation in the form of a reverse initiative.

Alternative scenario: if the price breaks out through the 1.2416 resistance level and fixes above it, the uptrend will likely resume.

• – UK Monetary Policy Report Hearings at 11:45 (GMT+2).

The USD/JPY currency pair

• Prev Open: 131.05
• Prev Close: 131.43
• % chg. over the last day: +0.29 %

Most Japanese inflation indicators show that price growth has no signs of easing, despite the Bank of Japan holding firm to its forecast that inflation will return to the 2% target in the first half of this year. In addition, rising wage growth (+4.8%) is also raising concerns about the wage and price spiral. This inflationary pressure has sparked rumors that the Bank of Japan will simply be forced to abandon its soft monetary policy.

• Support levels: 130.34, 129.68, 129.98, 129.19, 129.04, 128.16
• Resistance levels: 131.58, 132.95, 133.23

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading at the level of moving averages. Above the level of 131.58, a false breakout area was formed, which is now acting as resistance. The MACD indicator has become inactive. It is better to look for buy deals from the support level of 130.34 or 129.68, but only with confirmation on the lower time frames. Sell deals can be sought from the resistance level of 131.59, but it is also better with confirmation.

Alternative scenario: If the price fixes below the support level of 128.16, the downtrend will be renewed with a high probability.

The USD/CAD currency pair

• Prev Open: 1.3386
• Prev Close: 1.3446
• % chg. over the last day: +0.35 %

Oil prices rose yesterday due to supply chain problems in Turkey because of the earthquake. In addition, the inventory data from the American Petroleum Institute (API) showed a 2.18 million barrels decline instead of a projected increase of the same amount. The Canadian dollar is a commodity currency, so rising oil prices help to strengthen the Canadian currency. However, it is always worth keeping in mind that an excessive rise in oil prices may increase inflation again.

• Support levels: 1.3385, 1.3333, 1.3281, 1.3212
• Resistance levels: 1.3442, 1.3472, 1.3496, 1.3520, 1.3554, 1.3595

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is forming a wide-volatile sideways trend. The MACD indicator is positive again. Sell deals should be considered from the resistance level of 1.3442 but on the condition of a false breakout, as the level has already been tested. Buy trades can be considered from the support of 1.3385 or 1.3333, but with additional confirmation in the form of an impulse initiative.

Alternative scenario: if the price breaks down and consolidates below the support level of 1.3263, the downtrend will likely resume.

The EUR/USD currency pair

• Prev Open: 1.0725
• Prev Close: 1.0727
• % chg. over the last day: +0.02 %

On Tuesday, Federal Reserve Chairman Jerome Powell reiterated that inflation is slowing but reaffirmed the need for it to continue rising. Morgan Stanley predicts that the US Federal Reserve will end its tightening cycle at the May meeting at 5.00-5.25%, after which it will take a long pause. According to the Fed’s rate monitoring tool, expectations of a rate hike in March are almost entirely factored into prices, while the probability of a rate hike in May jumped from 38% to 69%.

• Support levels: 1.0710, 1.0650, 1.0597
• Resistance levels: 1.0781, 1.0838, 1.0906, 1.0926, 1.0967, 1.1017, 1.1077

The trend on the EUR/USD currency pair on the hourly time frame is bearish. Yesterday the price formed a false breakdown zone, which can now act as a support zone. The MACD indicator is in the negative zone, but sellers’ pressure is weak. Under such market conditions, buy trades are better to be considered from the support level of 1.0710. Sell deals can be considered from the resistance level of 1.0838, but better with confirmation in the form of reverse initiative.

Alternative scenario: if the price breaks down through the resistance level of 1.0967 and fixes above it, the uptrend will likely resume.

• – US FOMC Member Williams Speaks at 16:15 (GMT+2);
• – US FOMC Member Waller Speaks at 20:45 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.2020
• Prev Close: 1.2047
• % chg. over the last day: +0.22 %

Friday’s US jobs report continues to support the dollar index and, in turn, limits GBP/USD quotes recovery attempts. Market participants estimate a higher Fed peak rate for 2023 than the Bank of England (BoE). Given the problems in the UK economy, the Bank of England is much closer to completing its rate hike cycle. The Bank of England will likely hold another 0.25% hike at its next meeting, but that will not narrow the interest rate differential between the BoE and the US Fed, which is negative for the pound.

• Support levels: 1.2000, 1.1930
• Resistance levels: 1.2147, 1.2202, 1.2311, 1.2416

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The price is trading at the level of the moving averages. A false breakdown zone was formed below the level of 1.2000. The MACD indicator has become positive. Under such market conditions, it is better to look for buy deals on intraday time frames from the support level of 1.2000, but with confirmation in the form of reverse initiative. It is best to look for sell trades after the pullback, as the price has deviated strongly from the moving averages. The best resistance levels are 1.2147 and 1.2202, but it is also better with a confirmation in the form of the reverse initiative.

Alternative scenario: if the price breaks out through the 1.2416 resistance level and fixes above it, the uptrend will likely resume.

The USD/JPY currency pair

• Prev Open: 132.63
• Prev Close: 131.07
• % chg. over the last day: -1.19 %

Solid payroll data has once again sparked rumors that the Bank of Japan might reconsider its ultra-soft monetary policy after all. Even though it is just a rumor, the Japanese Yen managed to appreciate slightly against the dollar. A lot will depend on who becomes the next governor of the Bank of Japan. A more hawkish politician might reverse the trend in the USD/JPY currency pair, while a more dovish candidate who will continue with the current soft monetary policy will lead to even more weakness in the Japanese currency as the interest rate differential between the Bank of Japan and the US Fed continues to widen.

• Support levels: 130.34, 129.98, 129.19, 129.04, 128.16
• Resistance levels: 131.58, 132.95, 133.23

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price has corrected to the “discount” area but hasn’t reached the support level, which is why one more decrease in quotes is possible. The MACD indicator has become negative. It is better to look for buy deals from the support level of 130.34, but only with confirmation on the lower time frames. Sell deals can be searched from the resistance level of 131.59, but it is also better with confirmation.

Alternative scenario: If the price fixes below the support level of 128.16, the downtrend will be renewed with a high probability.

The USD/CAD currency pair

• Prev Open: 1.3444
• Prev Close: 1.3397
• % chg. over the last day: -0.35 %

Just two weeks ago, when the Bank of Canada raised its interest rate, analysts were certain that this was the last rate hike. But yesterday, the BoC head dispelled those predictions, pointing out that it was too early to think about lowering rates, and it was not entirely clear if the Bank of Canada had raised rates enough. The Canadian dollar strengthened yesterday on the back of a 4% rise in oil prices. Oil prices were supported by continuing bets on consumption growth in China, as well as the fact that all operations at the Turkish oil export terminal with a capacity of 1 million barrels per day in Ceyhan were halted after a major earthquake. This terminal exports Azeris crude oil to international markets.

• Support levels: 1.3333, 1.3281, 1.3212
• Resistance levels: 1.3442, 1.3472, 1.3496, 1.3520, 1.3554, 1.3595

From the point of view of technical analysis, the trend on the USD/CAD currency pair is bullish. Yesterday the price formed a false break zone above the level of 1.3442, which will act as resistance. The MACD indicator has become negative, and there is slight seller pressure. Sell deals should be considered from the resistance of 1.3442 in case of a reversal in the intraday time frames since it has already been tested. Buy trades could be considered from the 1.3333 support level, but with additional confirmation in the form of an impulse initiative.

Alternative scenario: if the price breaks down and consolidates below the support level of 1.3263, the downtrend will likely resume.

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

The EUR/USD currency pair

• Prev Open: 1.0781
• Prev Close: 1.0725
• % chg. over the last day: -0.52 %

The dollar jumped to a four-week high against the euro on Monday. Unexpectedly strong US jobs data last week raised the possibility that the US Federal Reserve will continue to raise interest rates to fight inflation. This news is still being “digested” by market participants. But it should be noted that despite the hawkish statements of the US Fed representatives, the ECB also continues to raise rates aggressively and plans to make another 0.5% increase in March. Therefore, traders should not count on a prolonged EUR/USD downtrend.

• Support levels: 1.0710, 1.0650, 1.0597
• Resistance levels: 1.0781, 1.0838, 1.0906, 1.0926, 1.0967, 1.1017, 1.1077

The trend on the EUR/USD currency pair on the hourly time frame has changed to bearish. The price is trading below the moving averages. The MACD indicator is deeply negative, but there are the first signs of divergence. Under such market conditions, waiting for a small pullback is best, as the price has deviated strongly from the moving averages. Buy trades are best considered from the support level of 1.0710, but confirmation in the form of a reverse reaction on the lower time frames is needed. Sell deals can be considered from the resistance level of 1.0838, but it is also better with confirmation in the form of a reverse initiative.

Alternative scenario: if the price breaks down through the resistance level of 1.0967 and fixes above it, the uptrend will likely resume.

• – German Industrial Production (m/m) at 09:00 (GMT+2);
• – US Trade Balance (m/m) at 15:30 (GMT+2);
• – US Fed Chair Powell Speaks at 19:00 (GMT+2).

The GBP/USD currency pair

• Prev Open: 1.2029
• Prev Close: 1.2020
• % chg. over the last day: -0.07 %

The British pound has been showing weakness lately. Economic data has not been strong enough to strengthen the pound compared to its peers, while ongoing strikes and the threat of more strikes in the coming weeks undermine sentiment. A recent International Monetary Fund (IMF) update indicated that the UK economy would contract by 0.6% this year, almost one percentage point below their previous estimate.

• Support levels: 1.2035, 1.2000, 1.1930
• Resistance levels: 1.2147, 1.2182, 1.2228, 1.2311, 1.2416

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame has changed to bearish. The price is trading below the moving averages. The MACD indicator is in the negative zone, but there are the first signals of divergence. Under such market conditions, it is better to look for buy trades on intraday time frames from the support level of 1.2035, but with confirmation in the form of reverse initiative. It is best to look for sell deals after a slight pullback, as the price has strongly deviated from the moving averages. The best resistance levels are 1.2147 and 1.2228, but it is also better with a confirmation in the form of the reverse initiative.

Alternative scenario: if the price breaks out through the 1.2416 resistance level and fixes above it, the uptrend will likely resume.

The USD/JPY currency pair

• Prev Open: 132.39
• Prev Close: 132.63
• % chg. over the last day: +0.18 %

The Nikkei newspaper, citing anonymous sources in the government and the ruling party, reported yesterday that Masayoshi Amamiya, deputy governor of the Bank of Japan, is running for the post of the next governor. According to Saxo strategists, Amamiya is considered the most “dovish” among the contenders. Market participants believe that Amamiya will continue Governor Kuroda’s soft stimulus policy. The Japanese yen rapidly declined against the dollar on the back of this news.

• Support levels: 131.11, 130.34, 129.98, 129.19, 129.04, 128.16
• Resistance levels: 132.95, 133.23

From the technical point of view, the medium-term trend on the currency pair USD/JPY has changed to bullish. The price strongly deviated from the moving averages. The MACD indicator is in the positive zone with signs of overbuying and divergence, which limits the further growth of quotes. It is better to look for buy deals after a slight correction to the support levels in the “discount” zone – 130.34 or 129.19, but only with a confirmation on the lower time frames. At least, it is necessary to wait for the correction to the level of 131.11. Sell deals can be sought after an impulse return below the psychological level of 132.00, which will form a false breakout area above the level.

Alternative scenario: If the price fixes below the support level of 128.16, the downtrend will be renewed with a high probability.

The USD/CAD currency pair

• Prev Open: 1.3309
• Prev Close: 1.3445
• % chg. over the last day: +1.02 %

Yesterday’s business activity data from Ivey showed a high jump from August 2022. Despite the rise in business activity, this might be the first sign of trouble ahead for Canada’s Central Bank. Increased business activity could lead to increased demand and spending by consumers, which could have an indirect effect on inflation. The Canadian dollar also remains under pressure due to uncertainty in the oil market. The outlook for the Canadian dollar in 2023 will largely depend on commodity prices, how the US dollar behaves, and whether central banks manage to avoid a major recession.

• Support levels: 1.3333, 1.3281, 1.3212
• Resistance levels: 1.3434, 1.3472, 1.3496, 1.3520, 1.3554, 1.3595

From the point of view of technical analysis, the trend on the USD/CAD currency pair has changed to bullish. But the price reached the daily resistance level of 1.3472 and slightly corrected to the moving averages, breaking through the trend line. The MACD indicator is in the positive zone, but there are first signs of weakness. Sell deals should be considered from the resistance level of 1.3434 in case of a reversal in the intraday time frames. Buy trades can be considered from the 1.3333 support level, but with additional confirmation in the form of an impulse initiative.

Alternative scenario: if the price breaks down and consolidates below the support level of 1.3263, the downtrend will likely resume.

• – Canada Trade Balance (m/m) at 15:30 (GMT+2);
• – Canada BoC Gov Macklem’s Speech at 19:30 (GMT+2).