The Analytical Overview of the Main Currency Pairs on 2022.06.01

The EUR/USD currency pair

• Prev Open: 1.0774
• Prev Close: 1.0731
• % chg. over the last day: -0.40%

Consumer prices in Europe broke another record. Inflation in the Eurozone accelerated from 7.4% to 8.1% y/y. The main reason for the increase was high energy prices, which affected 2⁄3 of overall inflation. Core inflation (which excludes food and fuel prices) rose from 3.5% to 3.8%. The price increase is becoming more common, adding to the pressure on the ECB. Analysts expect inflation to remain high until the end of 2022, so risks are shifting towards higher interest rates. With a high probability, the ECB will raise the rate by 25 basis points at the July meeting and by 50 bps at the September meeting.

• Support levels: 1.0643, 1.0680, 1.0611, 1.0568, 1.0509, 1.0445, 1.0379
• Resistance levels: 1.0756, 1.0786, 1.0869

From a technical point of view, the trend on the EUR/USD currency pair on the hourly time frame is bullish. But the MACD indicator became negative, and a correction began. Under such market conditions, investors can look for buy trades on intraday time frames from the support level of 1.0643, but only with confirmation and short targets. Sell trades can be considered from the resistance level of 1.0756, but only after the additional confirmation.

Alternative scenario: if the price breaks out through the 1.0611 support level and fixes below, the downtrend will likely resume.

• – Eurozone German Retail Sales (m/m) at 09:00 (GMT+3);
• – Eurozone Spanish Manufacturing PMI (m/m) at 10:15 (GMT+3);
• – Eurozone Italian Manufacturing PMI (m/m) at 10:45 (GMT+3);
• – Eurozone French Manufacturing PMI (m/m) at 10:50 (GMT+3);
• – Eurozone German Manufacturing PMI (m/m) at 10:55 (GMT+3);
• – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
• – Eurozone Unemployment Rate (m/m) at 12:00 (GMT+3);
• – Eurozone ECB President Lagarde Speaks at 14:00 (GMT+3);
• – Canada Manufacturing PMI (m/m) at 15:30 (GMT+3);
• – US ISM Manufacturing PMI (m/m) at 17:00 (GMT+3);
• – US JOLTs Job Openings (m/m) at 17:00 (GMT+3);
• – US FOMC Member Williams Speaks at 18:30 (GMT+3);
• – US FOMC Member Bullard Speaks at 20:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2650
• Prev Close: 1.2601
• % chg. over the last day: -0.39%

The UK economy contracted by 0.1% in March, and economists expect further contraction this year as the country's cost-of-living crisis deepens. The pound sterling is in danger of becoming an "emerging market" currency, according to Bank of America, as falling growth and rising risks are forcing investors to abandon the British currency. According to analysts, the preferred way to capitalize on the fall of the pound is the appreciation of the euro against the pound sterling.

• Support levels: 1.2515, 1.2437, 1.2398, 1.2283, 1.2199
• Resistance levels: 1.2628, 1.2669, 1.2698, 1.2770

The GBP/USD currency pair trend is bullish on the hourly time frame. Nevertheless, the MACD indicator became negative, and correction started. The price is trading between the moving averages. Under such market conditions, buy deals may be considered from the support level of 1.2515, but only with additional confirmation and short targets. Sell deals should be looked for from the resistance level of 1.2628, but with confirmation.

Alternative scenario: if the price breaks down through the 1.2437 support level and fixes below, the mid-term downtrend will likely resume.

• – UK Manufacturing PMI (m/m) at 11:30 (GMT+3).

The USD/JPY currency pair

• Prev Open: 127.53
• Prev Close: 128.69
• % chg. over the last day: +0.90%

The fundamental picture for the USD/JPY currency pair remains the same. The Fed is tightening monetary policy, while the Bank of Japan, on the contrary, holds a soft policy, and nothing will change soon. As a rule, monetary tightening leads to a strengthening of the national currency, while easing, on the contrary, leads to depreciation. The Manufacturing PMI index has remained almost unchanged compared to the previous month. The index is above the level of 50, which indicates stability.

• Support levels: 128.76, 128.46, 128.10, 127.64, 127.24, 127.04
• Resistance levels: 129.32, 130.06, 130.99

The medium-term trend on the USD/JPY currency has changed to bullish. The price has changed its market structure, the MACD indicator has become positive, and the price has consolidated above the moving averages. Buy trades can be considered from the support level of 128.76 or 127.46, but with confirmation. For sell deals, resistance level of 128.32 may be considered, but only with additional confirmation and short targets.

Alternative scenario: If the price fixes below 127.24, the downtrend will likely resume.

• – Japan Manufacturing PMI (m/m) at 03:30 (GMT+3).

The USD/CAD currency pair

• Prev Open: 1.2656
• Prev Close: 1.2650
• % chg. over the last day: -0.05%

Oil is getting cheaper as OPEC+ is considering excluding Russia from the group's production. The Canadian dollar is a commodity currency, so lower oil prices make it weak. The dollar index strengthened yesterday, which caused the USD/CAD quotes to rise. In the medium term, both the dollar index and the Canadian dollar tend to increase as the Central Banks of both countries hold a tightening policy. The Bank of Canada will hold its next interest rate meeting today, where analysts are predicting to see a 0.5% rate hike.

• Support levels: 1.2652, 1.2608, 1.2566, 1.2510
• Resistance levels: 1.2728, 1.2765, 1.2807, 1.2893, 1.2953, 1.3000, 1.3052

The USD/CAD currency pair is bearish in terms of technical analysis. The MACD indicator is in the negative zone, but the buyers' pressure is slowly increasing. Under such market conditions, it is better to look for buy trades on the lower time frames from the support level of 1.2652, but only with additional confirmation. For sell deals, it is better to consider the resistance level of 1.2728, but also better with confirmation and short targets.

Alternative scenario: if the price breaks through and consolidates above 1.2893, the uptrend will likely resume.

• – Canada Manufacturing PMI (m/m) at 15:30 (GMT+3);
• – Canada BoC Interest Rate Decision at 17:00 (GMT+3);
• – Canada BoC Statement at 17:00 (GMT+3).

by JustMarkets, 2022.06.01

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.