Forex, Commodities, Crypto Market Analysis by Solid ECN

Commercial Content Analysts
342

GBP USD - rising inflation in the UK puts pressure on the pound
This week, the GBP USD pair attempted to grow, having risen to the area of ​​1.2323, but today it has lost its position due to the release of negative UK macroeconomic statistics.

The May CPI was 0.7% MoM, slightly higher than the forecast (0.6%), and reached 9.1% YoY, which is a forty-year high. Fuel and food prices increased the most, while the population’s purchasing power is declining. Last week, the Bank of England raised interest rates for the fifth time in a row, bringing them to 1.25% but so far, these actions have not had the desired effect. Inflation is increasing and, according to experts, by November, it will be able to exceed 11%, while the tightening of monetary policy increases the risks of a recession.

Under these conditions, the US currency looks more attractive, although the economic downturn due to the “hawkish” monetary policy of the US Federal Reserve also threatens this country. Today, the head of the regulator, Jerome Powell, will address the US Congress with a semi-annual report in which he can outline his vision of the immediate economic prospects and further actions of the department.

Resistance levels: 1.2450, 1.2695, 1.2940 | Support levels: 1.2207, 1.1962, 1.1718

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343

GBPUSD - UK inflation hits 40-year high

The British pound is trading with multidirectional dynamics against the US currency, consolidating near the level of 1.2260. The day before, GBP/USD also closed with a minimal deviation from the opening levels of the daily session.

Investors are evaluating macroeconomic data from the Office for National Statistics, released yesterday, which reflected an increase in consumer price growth in May: the figure reached 9.1%, which is a record since 1982. The negative dynamics is due to the rapid increase in tariffs for electricity and raw materials in general, which have set a high since 1985, adding 22.1% to the cost against the background of the escalation of the military conflict in Ukraine. At the same time, the monthly inflation rate slowed down from 2.5% to 0.7%, and the Core CPI for the same period decreased from 6.2% to 5.9%, which turned out to be even slightly better than market forecasts of a reduction to 6.0%. In turn, the Retail Price Index in May showed an increase of 11.7%, accelerating from 11.1%, while the forecasts suggested an increase of only up to 11.4%; on a monthly basis, the indicator slowed down from 3.4% to 0.7%, while the market expected a decline to 0.5%. At the same time, according to officials of the Bank of England, consumer price growth may reach 11% by October, exacerbating the crisis in the cost of living for British families. An increase in the interest rate for the fifth time in a row to 1.25% has not yet had the desired effect on the economy, only increasing the risks of a recession. In turn, inflation, taking into account the costs of homeowners for housing maintenance, increased to 7.9% from 7.8% a month earlier.

Today, investors are waiting for the publication of statistics on business activity from S&P Global for June. Forecasts suggest that Manufacturing PMI will show a decrease from 54.6 to 53.7 points.

Resistance levels: 1.2328, 1.2400, 1.2457, 1.25 | Support levels: 1.2250, 1.2163, 1.2074, 1.2

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344

USD TRY - The lira consolidates near record lows

Experts believe that the rapid weakening of the lira is the result of President Recep Tayyip Erdogan’s intervention in monetary policy, who insists on lowering interest rates even in the face of rapid inflation, which reached 73.5% in May. So, at the end of 2021, the rate was corrected from 19% to 14%, and, according to the country’s leader, this policy will continue soon. It is a powerful driver of the decline of the national currency, the rate of which at the beginning of the week reached the December minimum around 17.3600. Today, the Central Bank of Turkey will announce a decision on the weekly repo auction rate, which has not changed since December 2021. The prospects for monetary policy remain uncertain: it is obvious that a sharp increase in the interest rate should not be expected, while the current measures to combat rising inflation are not enough. Also, rapidly declining foreign exchange reserves are putting pressure on the authorities: last week, they adjusted by 1B dollars and now stand at 7B dollars, forcing the authorities to swap with Saudi Arabia.

Yesterday, at the opening of the daytime session, the US dollar showed an active decline but then quickly regained all lost ground with the support of the speech of the head of the US Federal Reserve, Jerome Powell, in the national Congress, which confirmed the regulator’s commitment to the course of further tightening of monetary policy. At the same time, the official did not touch upon the topic of a possible economic recession, which still serves as a strong deterrent for the national currency.

Resistance levels: 17.4, 17.6, 17.75 | Support levels: 17.1, 17, 16.75, 16.6

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345

NZDUSD - The pair may fall.

If the assumption is correct, the NZD USD pair will fall to the levels of 0.606 – 0.591. In this scenario, critical stop loss level is 0.639.

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346

AUD USD - the instrument is consolidating around 0.69

The Australian dollar shows corrective growth, winning back the losses of the previous two “bearish” sessions. The instrument is again testing the level of 0.6900 for a breakout, receiving support from the growth of corrective moods in the US currency. Investors are in a hurry to fix their profits, and also react to the publication of rather weak macroeconomic statistics from the US.

The data released the day before by S&P Global pointed to a drop in the index of business activity in the US Services sector from 53.4 to 51.6 points, while analysts had expected growth to 53.5 points. The Manufacturing PMI fell sharply from 57.0 to 52.4 points, which also turned out to be significantly worse than the market’s expectations of a reduction to 56.0 points. The Composite PMI in June corrected from 53.6 to 51.2 points, while the forecast was at the level of 53.7 points.

Additional pressure on the markets yesterday was exerted by the speech of US Federal Reserve Chairman Jerome Powell in the US Senate, where the official again noted significant risks of expanding inflationary pressure within the country, recognizing the possibility of a recession due to the regulator’s “hawkish” position. At the same time, the Fed intends to further tighten monetary policy, trying to return the Consumer Price Index to the target level of 2%.

In Australia, against the background of a lack of energy obtained with the help of solar panels and wind generators, a fuel crisis is rapidly developing. Last week, the Australian Energy Market Operator (AEMO) announced it was suspending market and capping wholesale electricity prices until June 23 due to the impossibility of uninterrupted supplies to consumers. Due to the existing deficit, local companies had to buy oil and gas in the spot markets, which contributed to a sharp increase in costs. The government is ready to return to coal-fired infrastructure, as Australian Resources Minister Madeleine King said earlier, noting that the resumption of such enterprises will provide an additional 30% of energy capacity and improve the situation with the energy supply on the east coast.

Resistance levels: 0.695, 0.7, 0.705, 0.71 | Support levels: 0.69, 0.6849, 0.68, 0.675

347

USD CAD - Technical analysis

H4
On the four-hour chart, in the range of 1.2873–1.3082, there is a long-term consolidation of the asset. A confirmation of the development of the “bullish” impetus is the formation of the Morning Star model at the support level of 1.2873, and the formation of the Hammer candlestick analysis reversal pattern at 1.2933 may serve as the next signal for a possible early start of an upward movement. The combination of these models suggests that buyers are actively strengthening their positions, preventing sellers from dropping the price below the important level of 1.2873. In this situation, a scenario with an uptrend to the resistance level of 1.3082 seems likely, and consolidation above it will allow the “bulls” to move into the range of 1.3419–1.3704. An alternative scenario is possible if the “bears” overcome the level of 1.2873: then the price may drop to the zone of 1.2472–1.2074.

D1
On the daily chart, a potential trend continuation price pattern Bull Flag is forming. This was initiated by the formation of the Three Advancing White Soldiers candlestick pattern at 1.2472. At the moment, the uptrend continuation model Rising Three Methods at the level of 1.2933 has been indicated on the chart. Most likely, the asset will head higher to the resistance zone 1.3082–1.3704.

Support levels: 1.2873, 1.2472, 1.2074 | Resistance levels: 1.3082, 1.3419, 1.3704

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348

EURUSD Surpasses the resistance

The EURUSD pair closed last Friday above 1.0550 level, to activate the bullish trend scenario on the intraday basis, organized inside the bullish channel that appears on the chart, waiting for positive trades in the upcoming sessions that target 1.0670 areas mainly.

Therefore, the bullish bias will be suggested for today, noting that breaking 1.0550 followed by 1.0525 levels will stop the positive scenario and press on the price to turn to decline.

The expected trading range for today is between 1.0500 support and 1.0640 resistance.

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349

The EURGBP tests the resistance

The EURGBP pair formed correctional bullish rally to test the major resistance at 0.8720 followed by bouncing negatively towards 0.8580, to confirm keeping the domination of the bearish bias for the upcoming trading.

We notice the price attempt to crawl below the moving average 55, also, stochastic begins to provide the negative momentum to assist to renew the negative attempts, to expect reaching 0.8510 followed by targeting 38.2% Fibonacci correction level near 0.8410.

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350

The EURJPY repeats the negative closings

The EURJPY pair repeated the negative closings below 144.25 recorded high, which forms strong obstacle against the attempt to resume the bullish attack for now, which allows us to keep the correctional bearish overview for the near term and medium term period.

The above chart shows stochastic continuous negative waves, to increase the chances of gathering the negative momentum, to keep waiting to touch the negative stations at 142.20 followed by reaching 140.90.

The expected trading range for today is between 143.70 and 142.20

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351

The USDCHF resumes the decline.

The USDCHF pair achieved temporary gains yesterday and approached 0.9630 level, but it bounced bearishly to reach the thresholds of 0.9525 level, to keep the bearish trend scenario valid and active, waiting to break the last level to confirm rallying towards 0.9400 as a next station.

We remind you that the continuation of the bearish wave depends on the price stability below 0.9630.

The expected trading range for today is between 0.9500 support and 0.9600 resistance.

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352

The GBPJPY is slow.

The GBPJPY pair formed slow trades recently, affected by the contradiction of the moving average 55 positivity against stochastic negative momentum signals, to consolidate near 166.40 level today.

Note that the stability of the mentioned barrier will increase the chances of renewing the correctional bearish attempts that might target 164.80 and 164.10 levels, while breaching the barrier and holding above it will allow it to renew the positive attempts to move towards 167.30 direct, followed by reaching 168.70 recorded high.

The expected trading range for today is between 166.40 and 164.90

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353

The USDCHF pair reached few pips away from our waited target at 0.9525, and continues to move inside the intraday bearish channel that appears on the chart, which supports the chances of surpassing the mentioned level and open the way to achieve negative targets that extend to 0.9400.

Therefore, we will continue to suggest the bearish trend for the upcoming period unless breaching 0.9630 and hold above it.

The expected trading range for today is between 0.9500 support and 0.9600 resistance.

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354

The EURJPY settles below the high

No change to the EURJPY pair’s correctional bearish track, fluctuating below 144.25 recorded high, to notice crawling towards 142.80 to reinforce the chances of resuming the previously suggested correctional bearish attack.

We remind you that breaking the initial support at 142.20 will force it to suffer more losses that reach 140.90 followed by 140. The expected trading range for today is between 143.70 and 142.20

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355

USDCAD, H4
On the four-hour chart, at the support level of 1.2838, a Morning Star candlestick analysis pattern is forming, signaling a possible reversal of quotes towards resistance at 1.3039, and now there is a Rising Three Methods pattern. In the current situation, a possible scenario is the uptrend of quotations to 1.3039, consolidation above which will allow the “bulls” to head higher to the range of 1.3200–1.3411. An alternative scenario is likely if the “bears” overcome the key support level for buyers at 1.2838; then the price may go lower, to the area of 1.2640–1.2404.

USDCAD, D1
On the daily chart, a Bull Flag price pattern is forming, which is currently probably in the process of completing the formation of the Flag itself, from which an impulse upward movement should follow. The downward consolidation of the asset is accompanied by the construction of the Falling Three Methods trend continuation pattern at the level of 1.2979. In addition, the previous candle below 1.2898 formed a Long-Legged Doji pattern, which is a sign of pressure from both “bears” and “bulls”, but its appearance at the top still indicates the supremacy of the sellers. A likely reversal point in this situation is the support level at 1.2838, from where the price can recover with an impulse movement up to 1.3039, the overcoming of which will allow buyers to move higher to the resistance zone of 1.3200–1.3411.

Support levels: 1.2838, 1.2640, 1.2404 | Resistance levels: 1.3039, 1.3200, 1.3411.

356

EURUSD Confirms the Break

The EURUSD pair ended yesterday below 1.0550 level, which puts the price under more expected negative pressure in the upcoming period, on its way to head towards 1.0440 followed by 1.0355 as main negative targets.

Moving below the EMA50 supports the expected decline, which will remain valid unless breaching 1.0550 and holding above it again.

The expected trading range for today is between 1.0450 support and 1.0590 resistance.

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357

The USDJPY pair rallied upwards clearly yesterday to breach 135.30 and approach the recently recorded top at 136.70, to head towards regaining the main bullish trend and stop the bearish correction that dominated the recent trades, and it needs to breach the mentioned top to open the way to achieve additional gains that reach 137.50.

The EMA50 supports the expected rise for the upcoming period, taking into consideration that failing to achieve the required breach will press on the price to decline again and head towards 134.70 followed by 134.30 levels initially.

The expected trading range for today is between 135.60 support and 137.00 resistance

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358

The USDTRY pair faced strong negative pressures recently, which pushed it to exit the bullish track by crawling below 16.86 support line, suffering some losses by declining towards 16.02 that forms 50% Fibonacci correction level.

The current positive rebound hints the attempts to gather the additional negative momentum, to expect consolidating below the broken support and start forming new negative trades to target 16.3 followed by repeating the pressure on 16 barrier.

The expected trading range for today is between 16.725 and 16.3. The expected trend for today: Bearish

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359

The EURJPY pair confirmed its affection by the domination of the correctional bearish bias by providing frequent negative closings below 144.25 barrier, to start getting the negative momentum coming by stochastic.

These factors allow us to continue suggesting the negative attempts, to expect targeting 142.2 level soon, while breaking this obstacle will push the price to reach additional stations that might start at 140.9 and 140.

The expected trading range for today is between 143.30 and 142.2. The expected trend for today: Bearish.

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360

NZDUSD, H4

On the four-hour chart, under the resistance level of 0.6312, there is the formation of the Three Black Crows candlestick analysis pattern, which is a downtrend continuation pattern, as well as the Evening Star pattern, which formed at the level of 0.6252 after a short-term upward correction. The combination of these patterns indicates systematic pressure from sellers. A likely scenario is a decrease in the asset to the support level of 0.6122, overcoming which will become a catalyst for the movement of quotes to the zone of 0.5933–0.5621; however, there is a risk that the “bulls” will withstand the blow and, if the price rebounds from the level of 0.6122, the asset may reverse and head to the resistance range of 0.6312–0.6870.

NZDUSD, D1

On the daily chart, a Descending Triangle price pattern is forming, the exit from which can be carried out downwards, which is confirmed by falling highs and a horizontal support level. In addition, there is the formation of Falling Three Methods patterns, signaling the continuation of the downtrend. If the price consolidates below the support level of 0.6122, the “bears” will be able to increase pressure up to the level of 0.5621.

Support levels: 0.6122, 0.5933, 0.5621 | Resistance levels: 0.6312, 0.6563, 0.687

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361

USDCHF, D1
On the daily chart, the USD/CHF pair has been trading within the sideways range of 1.0025–0.9565 for more than two months (correction of 0.0% and 50.0%) and is currently trying to consolidate under its lower border again, after which the downward dynamics may develop to the levels 0.9460 (correction 61.8%) and 0.9400 (correction upward fan line 50.0%). The key “bullish” level is the resistance zone 0.9675–0.9710 (correction 38.2%, the middle line of Bollinger bands), upon breakout of which, growth can resume to 0.9810 (correction 23.6%), 1.0025 (correction 0.0%).

Technical indicators do not give a single signal: Bollinger bands are horizontal, the MACD histogram is increasing in the negative zone, and Stochastic reverses upwards.

USDCHF, W1
On the weekly chart, the USD/CHF pair fell to 0.9550 (38.2% correction), supported by the middle line of Bollinger Bands, consolidation below which will allow the asset to decline to 0.9400 (50.0% correction) and 0.9275 (61.8% correction) but it will have to overcome the rising counter fan. After the breakout of 0.9715 (correction 23.6%), the price will be able to return to 1.0000 (correction 0.0%).

Technical indicators do not give a single signal: Bollinger bands are directed upwards, confirming the continuation of the upward trend, but the MACD histogram is decreasing in the positive zone, and Stochastic is directed downwards.

The decline will remain relevant if the consolidation below 0.9500 (the middle line of Bollinger bands, W1) with the targets at 0.9400 (correction 50.0%, W1, ascending fan line 50.0%, D1), 0.9275 (correction 61.8%, W1). After the asset consolidates above 0.9715 (the middle line of Bollinger bands, D1, correction 23.6%, W1), positive dynamics can resume to 0.9810 (correction 23.6%, D1) and 1.0000 (correction 0.0%, W1).

Resistance levels: 0.9715, 0.9810, 1 | Support levels: 0.9500, 0.9400, 0.9275