Analytical Overview Of The Main Currency Pairs - Monday, July 4

10 and one 10 us dollar bill

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The EUR/USD currency pair

Technical indicators of the currency pair:

  • Prev Open: 1.0478
  • Prev Close: 1.0427
  • % chg. over the last day: -0.49%

Eurozone inflation hit another record 8.6% year-over-year in June, up from 8.1% in May. Price pressures have picked up considerably in the first half of 2022, and there are no signs of rapid easing. The slight drop in core inflation from 3.8% to 3.7% y/y is unlikely to reassure the ECB, as it was probably more affected by the German government's temporary measures to protect consumers from high energy prices than by an actual reduction in underlying price pressures. Analysts believe inflation is unlikely to have peaked, and further records are still to come. It is assumed that inflation in Europe will peak at 9.5% in September. Such circumstances will make the ECB sound aggressive in the coming months.

Trading recommendations

  • Support levels: 1.0412, 1.0379
  • Resistance levels: 1.0447, 1.0504, 1.0564, 1.0611, 1.0680, 1.0723

From the technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bearish. The price is trading below the moving averages, and the MACD indicator has become positive, but divergence is observed. Under such market conditions, sell deals can be considered from the resistance level of 1.0447 or 1.0504, but only after the additional confirmation. Buy trades are best to look for on intraday time frames from the support level of 1.0412, but only with confirmation and short targets.

Alternative scenario: if the price breaks out through the 1.0611 resistance level and fixes above, the uptrend will likely resume.

(Click on image to enlarge)

EUR/USD

There is no news feed for today. It's a bank holiday in the United States.
 

The GBP/USD currency pair

Technical indicators of the currency pair:

  • Prev Open: 1.2173
  • Prev Close: 1.2093
  • % chg. over the last day: -0.66%

The pound hit a two-week low on Friday after official data showed a record UK trade deficit. The seasonally adjusted manufacturing Purchasing Managers' Index (PMI) fell to a two-year low of 52.8 in June from 54.6 in May. Growth in UK manufacturing output virtually halted in June as new work orders fell for the first time since January 2021. Firms expressed concerns about weak domestic demand, weak export markets, inflationary pressures, the impact of rising costs of living on consumer demand, and supply chain problems. External demand fell due to Brexit, transportation disruptions, the war in Ukraine, and a slowing global economy.

Trading recommendations

  • Support levels: 1.2015, 1.1974
  • Resistance levels: 1.2115, 1.2172, 1.2238, 1.2324, 1.2422, 1.2470, 1.2523, 1.2629

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The situation is very similar to the euro. The price is trading below the moving averages, and the MACD indicator has become inactive, but sellers' pressure is still present. Under such market conditions, sell deals can be considered from the resistance level of 1.2115 or 1.2172, but only after the additional confirmation. Buy trades are best to look for on intraday time frames from the support level of 1.2015, but only with confirmation and short targets.

Alternative scenario: if the price breaks out through the 1.2324 resistance level and fixes above, the uptrend will likely resume.

(Click on image to enlarge)

GBP/USD

There is no news feed for today.
 

The USD/JPY currency pair

Technical indicators of the currency pair:

  • Prev Open: 135.65
  • Prev Close: 135.24
  • % chg. over the last day: -0.30%

Reuters reported that Japanese policymakers are worried about the falling yen and are increasingly forced to watch its recovery. In other words, the Bank of Japan and the government are ready to step in if the yen's fall is too precipitous. The shift in focus reflects growing market fears that the US Federal Reserve's aggressive tightening of monetary policy to fight inflation could trigger a recession in the United States, forcing the country's central bank to slow interest rate increases. This situation, in turn, could cause the dollar to depreciate against the yen. Japanese policymakers have traditionally favored a weak yen because a rising yen hurts exports, making Japanese goods less competitive abroad.

Trading recommendations

  • Support levels: 134.83, 133.35, 131.67, 131.00, 130.12, 129.48, 128.76
  • Resistance levels: 135.67, 136.24

The medium-term trend on the USD/JPY currency pair is bullish. But sellers' pressure has been growing during the last few days. The MACD indicator has become negative, but there is a slight divergence. Under such market conditions, buy trades can be considered from the support level of 134.83, but with confirmation. A resistance level of 135.67 is good for sell deals, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes below 133.35, the downtrend will likely resume.

(Click on image to enlarge)

USD/JPY

There is no news feed for today.
 

The USD/CAD currency pair

Technical indicators of the currency pair:

  • Prev Open: 1.2872
  • Prev Close: 1.2882
  • % chg. over the last day: +0.08%

The situation on the currency pair USD/CAD remains the same. The Canadian dollar is a commodity currency, so it depends not only on the US Dollar Index but also on the oil quotes. Both the dollar index and oil quotes went up on Friday. As a result, the price of USD/CAD continues to form a wide price corridor. The Bank of Canada and the US Federal Reserve are on track to raise interest rates, while the oil market is still in deficit with increased demand in summer. All of this suggests that no medium-term trends should be expected on the USD/CAD currency pair, as market conditions favor strengthening the US Dollar Index and the Canadian dollar.

Trading recommendations

  • Support levels: 1.2838, 1.2781, 1.2701, 1.2616
  • Resistance levels: 1.2914, 1.2957, 1.3045

In terms of technical analysis, the trend on the USD/CAD currency pair is bullish. The price is now trading in a wide corridor, a slight pressure from buyers prevails, and the MACD indicator does not show activity. Under such market conditions, it is better to look for buy deals in the lower time frames from the support level of 1.2838, but with confirmation. For sell deals, it is better to consider the resistance level of 1.2914, but it is also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates below the 1.2838 support level, the downtrend will likely resume.

(Click on image to enlarge)

USD/CAD

News feed for 2022.07.04:

  • – Bank of Canada Business Outlook Survey (m/m) at 17:30 (GMT+3).

More By This Author:

The Global Economic Outlook Continues To Deteriorate
Analytical Overview Of The Main Currency Pairs - Friday, July 1
The US Inflation Is Showing Signs Of Slowing

Disclosure: 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, ...

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