The EUR/USD currency pair
Technical indicators of the currency pair:
- Prev. Open: 1.0850
- Prev. Close: 1.0873
- % chg. over the last day: +0.22%
In its fight against inflation, the ECB raised rates by a combined 375 basis points from July 2022. With core inflation in the Eurozone remaining resilient, there is no doubt that the ECB will continue to tighten policy. The ECB is still expected to raise the rate by a combined 50 basis points in two steps, 0.25% each in June and July. Also, last week, the ECB indicated that a reduction in its government debt portfolio is expected to raise 10-year bond yields by 55 basis points between 2022 and 2025. Rising government bond yields tend to accompany a rise in the local currency, in this case, the euro.
Trading recommendations
- Support levels: 1.0828,1.0711
- Resistance levels: 1.0904,1.0956,1.0995,1.1056,1.1075,1.1094,1.1185
The trend on the EUR/USD currency pair on the hourly time frame is bearish. The price is trading at the level of moving averages, and the MACD indicator has become inactive. Downward movement persists, and buyers’ reaction to support levels is weak. Under such market conditions, the further price decline is expected to test the 1.0828 support level. Buy deals are best considered from the support level of 1.0828 but with confirmation in the form of a change in the structure on the lower time frames. Sell deals can be considered from the resistance level of 1.0904, but only with confirmation in the form of the sellers’ initiative.
Alternative scenario:if the price breaks through the resistance level of 1.1000 and fixes above it, the uptrend will likely resume.
News feed for: 2023.07.04
- German ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
- Eurozone ZEW Economic Sentiment (m/m) at 12:00 (GMT+3);
- Eurozone GDP (q/q) at 12:00 (GMT+3);
- Eurozone Trade Balance (q/q) at 12:00 (GMT+3);
- US Retail Sales (m/m) at 15:30 (GMT+3);
- US Industrial Production (m/m) at 16:15 (GMT+3);
- Eurozone ECB President Lagarde Speaks at 17:00 (GMT+3);
- US FOMC Member Williams Speaks at 19:15 (GMT+3).
The GBP/USD currency pair
Technical indicators of the currency pair:
- Prev. Open: 1.2452
- Prev. Close: 1.2526
- % chg. over the last day: +0.59%
Today the UK will publish important unemployment data. The labor market is expected to remain resilient. Suppose the actual data is as expected or better than expected. In that case, it may give confidence to the British currency as a strong labor market leaves the Bank of England with more flexibility to raise rates and tighten monetary policy. Conversely, if the labor market shows signs of cooling down, it would be a sign of economic weakness, which is negative for the currency. The IMF has not yet changed its forecast that the UK will be the only major country to record a GDP contraction this year.
Trading recommendations
- Support levels: :1.2491,1.2436,1.2386,1.2343,1.2320
- Resistance levels: 1.2540,1.2569,1.2612
From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. At the moment, the price is trading at the level of the moving averages. The MACD indicator has returned to the positive zone, but buy pressure is weak. The most optimal level to buy is 1.2491 or, in case of a deeper decline, the level of 1.2436, but only with confirmation on the lower time frames in the form of a change in the structure. Sell trades are best sought from the resistance level of 1.2540 but with confirmation in the form of a false breakout and reverse initiative.
Alternative scenario:if the price breaks down through the 1.2612 resistance level and fixes above it, the uptrend will likely resume.
News feed for: 2023.07.04
- UK Average Earnings Index (m/m) at 09:00 (GMT+3);
- UK Claimant Count Change (m/m) at 09:00 (GMT+3);
- UK Unemployment Rate (m/m) at 09:00 (GMT+3).
The USD/JPY currency pair
Technical indicators of the currency pair:
- Prev. Open: 135.63
- Prev. Close: 136.10
- % chg. over the last day: +0.35%
Last month Kazuo Ueda announced a plan to revise the previous monetary policy move when the Bank of Japan kept interest rates at negative levels. This revision was thought to set the stage for a gradual unwinding of monetary stimulus. At a press conference on Monday, Japan’s economy minister said that the government “recognizes and considers it appropriate” for the Bank of Japan to revise its stimulus measures. But some policymakers are wary of announcing the end of deflation risks, fearing that a slowdown in global demand could hit Japan’s economy and discourage firms from raising wages.
Trading recommendations
- Support levels: 135.15,134.67,133.50,133.03,132.70,132.02,131.82,130.62
- Resistance levels: 136.42,137.26,137.91
From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish, but it is close to changing. At the moment, the price is flat and trades above the moving averages in the Fibonacci premium zone. The MACD indicator has become positive, and buying pressure persists. Under such market conditions, buy positions are best to look for from the support level of 135.15 or from 134.67, but with confirmation in the form of an impulsive reaction of buyers. Sell trades can be considered from the resistance level of 136.42, but also with confirmation on the lower time frames.
Alternative scenario:if the price fixes above the 136.42 resistance level, the uptrend will resume with a high probability.
No news for today
The USD/CAD currency pair
Technical indicators of the currency pair:
- Prev. Open: 1.3540
- Prev. Close: 1.3466
- % chg. over the last day: -0.55%
The Canadian dollar has started to strengthen again due to the growth in oil prices. Oil is recovering as the US government confirmed plans to begin replenishing its depleted Strategic Petroleum Reserves (SPR). The Department of Energy (DOE) said Monday that it would purchase up to 3 million barrels of oil for SPR. Oil prices were also helped by the prospect of increased demand ahead of the summer months. Canada, consumer price data, will be released today, and inflationary pressures are expected to continue to decline.
Trading recommendations
- Support levels: 1.3398,1.3334,1.3267
- Resistance levels: 1.3500,1.3551,1.3589,1.3647,1.3667,1.3695
From the point of view of technical analysis, the trend on the USD/CAD currency pair in the medium term is still bearish. The price failed to consolidate above the priority change level. The MACD indicator returned to negative territory. Under such market conditions, it is best to look for buy trades from the support level of 1.3398 but with confirmation in the form of buyers’ reactions to the level. Sell trades are best sought from the resistance level of 1.3500 but with confirmation in the form of a sellers’ initiative.
Alternative scenario:by JustMarkets, 2023.05.16
News feed for: 2023.07.04
- Canada Consumer Price Index (m/m) at 15:30 (GMT+3).
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.