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The Canadian dollar moved sideways after the latest interest rate decision by the Bank of Canada. The bank decided to hike interest rates by 0.50%. Pushing the overnight rate to 1.50%. In addition, Tiff Macklem warned that more rate hikes were necessary to curb the soaring inflation. This was more hawkish than most analysts were expecting. The decision came a day after the country published mixed GDP numbers. The headline consumer price index has risen to a multi-decade high of 6.8%.

The US dollar index rose slightly after mixed economic data from the United States. According to the Institute of Supply Management, the manufacturing PMI rose from 55.4 in April to 56.1 in May. This increase was better than the median estimate of 54.5. Data by S&P showed that the manufacturing PMI declined from 59.2 to 57.0. There are signs that the manufacturing sector is doing well as supply chain issues improve. Additional data revealed that the number of job openings fell from 11.85 million to 11.4 million. Later today, the US will publish the latest initial jobless claims while ADP will release its private payroll numbers.

The price of crude oil rose slightly after Shanghai started to end its two-month lockdowns. Brent rose to $117 while Western Texas Intermediate rose to $116. At the same time, the price of natural gas continued rising. In a statement, Shanghai authorities said that it had ended its lockdowns even as it set stricter measures like testing. This is seen as a positive thing for oil prices since China is the biggest consumer. Later today, the Energy Information Administration will publish the latest inventory data. Analysts expect that the data will show that inventories slipped by 0.067m barrels. At the same time, the OPEC+ cartel will hold its monthly meeting.

XBRUSD

The XBRUSD pair formed a break and retest pattern after it dropped to the support at 114.20. This was an important level since it was along the upper side of the ascending channel shown in white. It was also above the important resistance at 114.17. The price is also slightly above the 50-day moving average while the MACD has moved above the neutral level. Therefore, the pair will likely keep rising as bulls target the key resistance at 120.

EURUSD

The EURUSD pair slipped after the hawkish tone by Fed’s Mary Daly. In an interview with CNBC, she said that she supported moving interest rates to neutral this year. It dropped to a low of 1.0625, which was the lowest level since May 24. The pair moved below the 25-day moving average while the Relative Strength Index (RSI) and the MACD have moved lower. Therefore, its outlook is bearish, with the next support being at 1.0578, which is the 38.2% Fibonacci retracement point.

USDJPY

The USDJPY pair continued rallying amid a stronger US dollar. It rose to a high of 130.10, which was the highest level since May 11. The pair has jumped sharply from its May low of 126,15. It managed to move above the important resistance level at 129.43 while the Relative Strength Index and the momentum oscillators have moved upwards. Therefore, the pair will likely keep rising as bulls target the key resistance at 131.

Daily Pivots: (S1) 161.88; (P) 162.60; (R1) 163.22; More...

Intraday bias in GBP/JPY remains on the upside for the moment. Further rally should be seen to retest 168.40 high. Firm break there will resume larger up trend. On the downside, below 160.92 minor support will turn bias back to the downside for extending the correction from 168.40.

In the bigger picture, up trend from 123.94 (2020 low) is still in progress. Sustained break of 61.8% retracement of 195.86 (2015 high) to 122.75 (2016 low) at 167.93 will be a long term bullish signal, and could pave the way back to 195.86 high. This will now remain the favored case as long as 150.95 support holds, even in case of deep pull back. However, firm break of 150.95 will indicate rejection by 167.93, and bearish trend reversal.

Daily Pivots: (S1) 138.18; (P) 138.57; (R1) 139.05; More....

Intraday bias in EUR/JPY remains on the upside. Larger up trend should be resuming. Break of 139.99 resistance will confirm, and target 61.8% projection of 124.37 to 139.99 from 132.63 at 142.28. On the downside, below 136.79 minor support will delay the bearish case and turn intraday bias again first.

In the bigger picture, up trend from 114.42 (2020 low) is in progress. Such rise is seen as the third leg of the pattern from 109.30 (2016 low). Next target will be 100% projection of 114.42 to 134.11 from 124.37 at 144.06. In any case, outlook will now remain bullish as long as 124.37 support holds, in case of deep pull back.

Daily Pivots: (S1) 0.8510; (P) 0.8527; (R1) 0.8550; More...

Range trading continues in EUR/GBP and intraday bias remains neutral. Further rally is in favor with 0.8365 support intact. On the upside, break of 0.8617 will resume rise from 0.8201 medium term bottom to 0.8697 medium term fibonacci level. However, break of 0.8365 will dampen this bullish view, and turn bias back to the downside instead.

In the bigger picture, a medium term bottom could be in place at 0.8201, on bullish convergence condition in daily and weekly MACD. Rise from there could either be a correction to the down trend from 0.9499 (2020 high), or a medium term up trend itself. In either case, further rise should be seen to 38.2% retracement of 0.9499 to 0.8201 at 0.8697. Sustained break there will target 61.8% retracement at 0.9003.

Daily Pivots: (S1) 1.4781; (P) 1.4873; (R1) 1.4931; More...

Intraday bias in EUR/AUD stays on the downside for 1.4597 support. Corrective rebound from 1.4138 should have completed at 1.5277, ahead of 1.5354 resistance. Break of 1.4597 support will bring retest of 1.4318 low. On the upside, above 1.5008 minor resistance will mix up the outlook and turn intraday bias neutral first.

In the bigger picture, as long as 1.5354 support turned resistance holds, larger down trend from 1.9799 (2020 high) is still expected to continue. On resumption, next target is 61.8% projection of 1.9799 to 1.5250 from 1.6434 at 1.3623, which is close to 1.3624 long term support (2017 low). However, firm break of 1.5354 will indicate medium term bottoming and bring stronger rally back to 1.6434 key resistance.

Daily Pivots: (S1) 1.0231; (P) 1.0275; (R1) 1.0306; More....

Breach of 1.0228 suggests resumption of fall from 1.0513. Intraday bias is back on the downside for 1.0086 support. As noted before, corrective rebound from 0.9970 could have completed at 1.0513. Break of 1.0086 will bring retest of 0.9970. On the upside, though, break of 1.0335 minor resistance will turn bias back to the upside for 1.0513 resistance.

In the bigger picture, as long as 1.0505 support turned resistance (2020 low) holds, long term down trend from 1.2004 (2018 high) is expected to continue. Next target is 100% projection of 1.2004 to 1.0505 to 1.1149 at 0.9650. However, firm break of 1.0505 will suggest medium term bottoming, and bring stronger rebound towards 1.1149 structural resistance.

Daily Pivots: (S1) 0.7144; (P) 0.7187; (R1) 0.7218; More...

AUD/USD is losing some upside momentum as seen in 4 hour MACD. But further rise is expected with 0.7034 support intact. Firm break of 0.7265 resistance will raise the chance of larger trend reversal and target 0.7760 structural resistance next. On the downside, however, break of 0.7034 minor support will turn bias back to the downside for retesting 0.6828 low instead.

In the bigger picture, price actions from 0.8006 are seen as a corrective pattern to rise from 0.5506 (2020 low). Deeper fall could be seen to 50% retracement of 0.5506 to 0.8006 at 0.6756. This coincides with 100% projection of 0.8006 to 0.7105 from 0.7660 at 0.6760. Strong support is expected from 0.6756/60 cluster to contain downside to complete the correction. Meanwhile, firm break of 0.7660 resistance will confirm that such corrective pattern has completed, and larger up trend is ready to resume.

Daily Pivots: (S1) 1.2618; (P) 1.2647; (R1) 1.2687; More...

USD/CAD is losing some downside momentum as seen in 4 hour MACD. But further decline is still expected with 1.2763 minor resistance intact. Firm break of 1.2401 support will argue that whole rebound from 1.2005 has completed. Deeper fall would then be seen to retest this low. However, break of 1.2763 will turn bias back to the upside for stronger rebound.

In the bigger picture, focus stays on 38.2% retracement of 1.4667 (2020 high) to 1.2005 (2021 low) at 1.3022. Sustained break there should confirm that the down trend from 1.4667 has completed after defending 1.2061 long term cluster support. Further rise would then be seen towards 61.8% retracement at 1.3650. However, rejection by 1.3022 will maintain medium term bearishness. Break of 1.2005 will resume the down trend from 1.4667 and that carries larger bearish implications too.

Daily Pivots: (S1) 1.0607; (P) 1.0673 (R1) 1.0719; More...

Intraday bias in EUR/USD remains neutral for the moment. On the upside, break of 1.0786, and sustained trading above 55 day EMA (now at 1.0757) will target 1.0935 resistance next. On the downside, however, break of 1.0626 minor support will indicate rejection by 55 day EMA, and turn bias back to the downside for retesting 1.0348 low instead.

In the bigger picture, focus stays on 1.0339 long term support (2017 low). Decisive break there will resume whole down trend from 1.6039 (2008 high). Next target is 61.8% projection of 1.3993 to 1.0339 from 1.2348 at 1.0090. However, firm break of 1.0805 support turned resistance will delay this bearish case and bring medium term corrective rebound first.

Daily Pivots: (S1) 1.2424; (P) 1.2520; (R1) 1.2582; More...

Intraday bias in GBP/USD remains neutral first. On the upside, above 1.2666 will resume the rebound from 1.2154. Sustained of 55 day EMA (now at 1.2729) will target 1.2999 support turned resistance. On the downside, though, break of 1.2457 minor support will turn bias back to the downside for retesting 1.2154 low instead.

In the bigger picture, fall from 1.4248 (2018 high) could be a leg inside the pattern from 1.1409 (2020 low), or resuming the longer term down trend. Deeper decline is expected as long as 1.2999 support turned resistance holds. On resumption, next target is 1.1409 low.