The rise in oil prices contributes to the strengthening of the pair
As a result of rising energy prices, the Canadian dollar is strengthening, which negatively affects the dynamics of the USDCAD pair, pushing it to the lows of April 2022.

Thus, the quotes of WTI Crude Oil have updated the maximum on March 24 in the area of 118, and at the moment they are trading under the level of 120, developing a "bullish" momentum. The increasing oil price strengthens the position of the Canadian dollar, as revenues to the national budget are growing, and the country can direct additional revenues from oil and gas profits to the development of its economy, which will make it more attractive to investors.

Another factor supporting the strengthening of the Canadian currency is the tightening of monetary policy by the Bank of Canada. Last week, the regulator raised the interest rate by 0.50% to 1.50%. This trend is likely to continue in the future, therefore, in the current conditions, a decline in the USDCAD pair seems more likely.

The long-term trend, however, remains upward. Last week, the trading participants broke down the support level of 1.2660, which suggests a further decline in the asset to the key support area of the trend of 1.2460–1.2430, however, if it is held, the growth will continue with a target at the May maximum.

The mid-term trend is downward. This week, the target zone 1.2640–1.2619 was broken down. The next target of the decline is the 1.2432–1.2412 zone. The key resistance of the trend is shifting to the level of 1.2766–1.2745. From the area of key resistance, new sales for the USDCAD pair can be considered.

Resistance levels: 1.2675, 1.2885, 1.2950 | Support levels: 1.2460, 1.2430, 1.2295

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Economic indicators disappoint investors
Against the background of the stabilization of the US currency, the GBPUSD pair is correcting within the local trend, trading around the level of 1.2545.

The expected outcome of the vote in the House of Commons, as a result of which the current Prime Minister, Boris Johnson, retained his post for at least another year, supported the pound quotes. Investors took this event as a sign of stability, and confidence in the national currency increased, but now, this momentum has leveled off, and economic issues are coming to the fore. As yesterday's statistics showed, the business activity of the main sectors is declining: according to the May report, the composite PMI fell to 53.1 points from 58.2 points in April, for the third time in a row. Service PMI fell to 53.4 points from 58.9 points in April, and this is also the third period of negative dynamics of the index. Today, Construction PMI will be published, but there, too, analysts have already predicted a drop in value from 58.2 points to 56.6 points.

The USD Index is trading at the beginning of yesterday at 102.5, almost without reacting to the speech of US Treasury Secretary Janet Yellen. Contrary to expectations, the main part of the official's speech was devoted to the situation in the oil market and the unprecedented rise in energy prices caused by the development of the military conflict in Ukraine. Commenting on the situation in the United States, Yellen noted that the current president's administration had done everything possible to mitigate the consequences of the energy crisis for the country, and without these actions, fuel prices would have been much higher. She said the 1.9T dollars stimulus package passed by the head of the White House in 2021 eliminated economic risks, leading to one of the lowest unemployment rates in post-war history.

The asset tries to test the recently passed global downlink support line. Technical indicators almost canceled the sell signal, preparing for a reversal: indicator Alligator's EMA oscillation range has narrowed as much as possible, and the AO oscillator histogram is forming new upward bars.

Resistance levels: 1.2634, 1.3000 | Support levels: 1.2452, 1.2164

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Consolidation near record highs
The US dollar shows mixed trading dynamics, consolidating near new record highs and the level of 134 and continuing the development of the general uptrend since May 30.

The pressure on the positions of the yen is exerted by the prospect of maintaining the current soft monetary policy of the Bank of Japan. While virtually all major financial regulators have moved on to sharply raise interest rates (the European Central Bank (ECB) is expected to launch the program in July), the Japanese authorities are pushing for continued stimulus. Such statements were made by the Deputy Governor of the regulator Masazumi Wakatabe, who also admitted the possibility of introducing new incentives if the economic situation so requires.

Macroeconomic statistics released yesterday in Japan did not provide any noticeable support to the yen. Revised data on the dynamics of gross domestic product for Q1 2022 were revised upward from –0.2% to –0.1% in quarterly terms and from –1.0% to –0.5% in annual terms, and the Eco Watchers Survey on Current Situation in May rose from 50.4 to 54.0 points, while the forecast was for a decline to 49.2 points.

Meanwhile, the Japanese authorities announced the continuation of work in the Russian oil and gas projects Sakhalin-1 and Sakhalin-2. The decision is contained in the national Energy White Paper. It is emphasized that in the current high energy prices, the country needs stable supplies of liquefied gas, and long-term contracts can reduce the negative effect on energy security. Mitsui & Co., Ltd. and Mitsubishi Corp. own 12.5% and 10% shares of the Sakhalin-2 project, and most of the gas produced here is supplied to Japan.

Bollinger Bands in D1 chart show quite active growth. The price range is expanding, but still does not keep pace with the development of "bullish" sentiment in the market. MACD grows, preserving a stable buy signal (located above the signal line). Stochastic has been near its highs for a long time, indicating high risks of the US dollar being overbought in the ultra-short term.

Resistance levels: 134.54, 135.55, 136 | Support levels: 133.7, 133, 132, 131

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The market is waiting for the US inflation data
USDCAD is correcting upwards, trading around 1.269. The Canadian currency has been actively increasing in value against the US dollar for almost the entire week; however, in the end, it lost all the gained positions, which was caused by two main factors.

First of all, the Bank of Canada released a report on financial stability, which reflected the main points of vulnerability of the national economic system. The regulator noted the negative dynamics of housing prices, which have grown by more than 50% since the beginning of the coronavirus pandemic and until now. In addition, the country has recorded an increase in the number of heavily indebted households, which in the near future may face an even greater burden due to rising interest rates on loans.

The second reason for the growth of USDCAD is the strengthening of the US dollar, which reached 103 in the USD Index. In turn, market participants almost did not react to another increase in the number of Initial Jobless Claims, which amounted to 229K against 202K a week earlier. Key expectations of investors are related to today's data on consumer inflation in the US, which may increase by 0.7% over the month and remain at 8.3% in annual terms.

On the global chart of the asset, the price continues to trade within a wide ascending channel with dynamic boundaries of 1.2450–1.3100, having reached the support line the day before. The fluctuation range of the Alligator indicator EMAs began to actively narrow, and the histogram of the AO oscillator is forming new ascending bars, actively rising in the sell zone.

Support levels: 1.2630, 1.2463 | Resistance levels: 1.2730, 1.2890

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The New Zealand currency is declining against the US dollar. However, there is an obvious trend towards its strengthening relative to other currencies due to the publication of positive national macroeconomic statistics: after the removal of the main coronavirus restrictions, the flow of people crossing the border increased significantly, reaching 266.7K people in April, which significantly exceeds the figures of previous months and 15.9K in May 2020. Also, data on spending on credit cards were published earlier, which reflected an increase in the purchasing activity of the population. Thus, the May figure was 123M New Zealand dollars, which is 1.4% higher than the April data.

The US currency strengthened significantly, surpassing 104.000 in the USD Index. The upward trend was catalyzed by the publication of data on consumer prices: inflation in the United States increased to 8.6% compared to May 2021, which exceeded the analysts' forecast, which assumed that the indicator would remain at 8.3%. The US Federal Reserve did not expect the index to rise in May, but it amounted to 1.0%, significantly exceeding the consensus forecast of 0.7%, leading to an annual value increase. Such statistics mean that the US regulator will have to continue actively tightening monetary policy.

The trading instrument is moving within the global downtrend, approaching the year's low around 0.6220. Technical indicators reversed and gave a sell signal: fast EMAs on the Alligator indicator crossed the signal line downwards, and the AO oscillator histogram formed new downward bars below the zero line.

Resistance levels: 0.6410, 0.6566 | Support levels: 0.6220, 0.6070

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Yesterday, Statistics Canada (StatCan) published data on the state of the Construction Sector, investment in which has been increasing for the seventh month in a row, adding 2.7% to 20.0 billion Canadian dollars in April. Financing for the construction of houses increased by 3.2%, and for the construction of non-residential buildings it increased by 1.4%. These data point to the stability of the real estate market in Canada, even in conditions of high inflation. Today, traders will be watching the data on Manufacturing Sales, which is expected to slow down to 1.6% from 2.5% a month earlier.

The US dollar, in turn, reached an all-time high of the year on May 12 at 104.900 in the USD Index on the back of a wave of sell-offs in risky assets, remaining stable in anticipation of today's publication of Producer Price Index data. According to forecasts, the May Producer Price Index may rise by 0.8%, which will provide an uptrend in the annual rate by 10.9%, and this, in turn, will signal a strengthening of the national currency.

On the global chart of the asset, the price is trading within the wide upward channel with dynamic borders of 1.2450–1.3100, actively approaching the resistance line. The fluctuation range of the Alligator indicator EMAs is about to issue a buy signal, and the histogram of the AO oscillator is forming new ascending bars, actively rising in the sell zone.

Support levels: 1.2763, 1.2525 | Resistance levels: 1.2937, 1.3077

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EUR USD, the market is waiting for the decision of the US Federal Reserve on the interest rate

Today data on inflation in France will be published. According to analysts' forecasts, the consumer price index for May will rise by 0.6%, which will increase the rate by 5.2% YoY after 4.8% a month earlier. Yesterday, it became known that the same indicator in Germany reached a record 7.9%, adding 1.1% over the month. Sharp inflation is putting pressure on key sectors, and today's EU industrial output data will likely reflect continued negative momentum. According to experts' expectations, the value will decrease by 2.0% for April and by 1.1% YoY, which will increase pressure on the European currency.

Quotes of the American currency have consolidated after reaching the year's high, around 105.000 in the USD Index, and the market is waiting for the evening decision of the US Federal Reserve on interest rates. The consensus forecast of analysts suggests an increase in the indicator by the already familiar 50 basis points but after inflation in the United States rose to 8.6%, some experts spoke out for a sharper increase in the value by 75 basis points, which may be a completely justified action by the regulator to convince investors of the seriousness of their intentions. Also, to determine the rate for the current period, the agency will publish a monetary policy forecast for the near future.

The trading instrument moves within a narrow downward channel, approaching the support line. Technical indicators strengthen the sell signal: indicator Alligator's fast EMA oscillation range expands downwards, and the AO oscillator histogram formed a down bar after entering the sell zone.

Resistance levels: 1.0498, 1.0776 | Support levels: 1.0353, 1.01