The EUR/USD currency pair
- Prev Open: 1.0857
- Prev Close: 1.0854
- % chg. over the last day: -0.03 %
The latest economic news on the Eurozone was mixed. Eurozone first quarter labor costs accelerated, which is hawkish for ECB policy, while the German Producer Price Index for April declined, which is dovish for ECB policy. The divergence of central banks' views currently limits the euro's upside potential: the ECB is expected to cut interest rates next month, while the Fed is postponing rate cuts.
- Support levels: 1.0854, 1.0831, 1.0803, 1.0781, 1.0750, 1.0713, 1.0688, 1.0652
- Resistance levels: 1.0861, 1.0885, 1.0903, 1.0923
The trend on the EUR/USD currency pair on the hourly time frame is bullish. Markets are entering the low-volatility summer period, volatility is decreasing. Now, the price is trading at the level of moving averages between the resistance level of 1.0861 and the support level of 1.0853. A price consolidation above 1.0861 will open up buying opportunities up to 1.0885. A price consolidation below 1.0853 will open the price to 1.0831.
Alternative scenario: if the price breaks the support level at 1.0759 and consolidates below it, the downtrend will likely resume.
- – US FOMC Member Collins Speaks at 02:00 (GMT+3);
- – US FOMC Member Mester Speaks at 02:00 (GMT+3);
- – US Existing Home Sales (m/m) at 17:00 (GMT+3);
- – US FOMC Meeting Minutes at 21:00 (GMT+3).
The GBP/USD currency pair
- Prev Open: 1.2706
- Prev Close: 1.2708
- % chg. over the last day: +0.02 %
Inflation data for April will be released in the UK today. Economists expect year-on-year consumer inflation to fall sharply from 3.2% to 2.1%. Core inflation (excluding food and energy prices) will fall from 4.2% to 3.6% y/y. The decline is expected to be mainly due to the base effect of changes in UK electricity price caps. Given that the UK Central Bank's target rate is 2%, this would represent a victory for inflation. This would be negative for the UK currency, but the UK100 index would get support. However, if inflation data turns out to be worse than expected, i.e., inflation falls but not as much as projected, it may become a temporary stimulus for the British currency.
- Support levels: 1.2668, 1.2647, 1.2608, 1.2567, 1.2548, 1.2487, 1.2465, 1.2446
- Resistance levels: 1.2716, 1.2762
From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The situation has mostly stayed the same compared to yesterday. The British pound trades in the resistance zone near the 1.2716 level, where a narrow, flat accumulation is still forming. The MACD indicator shows divergence, with a so-called SMT divergence formed, where the pound made a new high and the euro did not. Typically, such conditions lead to a correction or reversal. Under such market conditions, sell deals can be seen from the resistance level of 1.2716, but with additional confirmation. A move above 1.2716 will open the price path to 1.2762.
Alternative scenario: if the price breaks the support level of 1.2508 and consolidates below, the downtrend will likely resume.
- – UK Consumer Price Index (m/m) at 09:00 (GMT+3);
- – UK Producer Price Index (m/m) at 09:00 (GMT+3).
- Prev Open: 156.23
- Prev Close: 156.14
- % chg. over the last day: -0.06 %
- Support levels: 155.29, 155.15, 154.60, 153.83, 153.12, 151.93, 151.59
- Resistance levels: 156.57, 157.12, 158.20, 160.00
- – Japan Trade Balance at 02:50 (GMT+3).
- Prev Open: 2427
- Prev Close: 2421
- % chg. over the last day: -0.24 %
- Support levels: 2395, 2377, 2343, 2328, 2307, 2276, 2249, 2229, 2206
- Resistance levels: 2432, 2450, 2500
- – US FOMC Member Collins Speaks at 02:00 (GMT+3);
- – US FOMC Member Mester Speaks at 02:00 (GMT+3);
- – US Existing Home Sales (m/m) at 17:00 (GMT+3);
- – US FOMC Meeting Minutes at 21:00 (GMT+3).
The USD/JPY currency pair
The Japanese yen fell to 156 per dollar, hitting a one-week low, as the dollar strengthened after US Federal Reserve officials called for caution and more confidence that inflation will return to the 2% level before cutting interest rates. That means the sharp rate differential between the US and Japan will continue to weigh on the yen. Japan's Finance Minister Shun'ichi Suzuki expressed concern about the negative impact of a weak currency on wage growth. The risk of government intervention remains.
From the technical point of view, the medium-term trend on the currency pair USD/JPY is still bearish, but the conditions for a trend change are forming. Currently, the price is trading between the resistance level of 156.55 and the support level of 155.98. There are no optimal entry points for buying now. Selling can be considered from the resistance zone near 156.55, but only with confirmation, as the level has already been tested, and the price may breakout it.
Alternative scenario: if the price breaks through and consolidates above the resistance level of 157.59, the uptrend will likely resume.
The XAU/USD currency pair (gold)
Prices for precious metals decreased moderately on Tuesday. The strengthening of the dollar on Tuesday had an impact on metal prices. In addition, gold was negatively impacted by hawkish comments from Fed Representative Waller and FRB Atlanta President Bostic, who said they prefer to wait for inflation to fall before cutting interest rates. But gold's decline was tempered by renewed trade tensions between the US and China and fears of an escalation of geopolitical conflict in the Middle East amid the recent death of Iranian President Ebrahim Raisi.
From the point of view of technical analysis, the trend on the XAU/USD is bullish. The price continues to correct. There is weak selling pressure inside the day. Currently, the price is trading at moving average levels, with sellers forming two supply zones above. The MACD indicates bearish pressure intraday. Under these market conditions, one can look for selling with a target of up to 2395. There are no optimal entry points for buying right now.
Alternative scenario: if the price breaks and consolidates below the 2370 support level, the downtrend will likely resume.
by , 2024.05.22
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