The Analytical Overview of the Main Currency Pairs on 2024.07.22

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0898
• Prev. Close: 1.0882
• % chg. over the last day: -0.14%

The euro fell below $1.090, down from Wednesday’s four-month high of $1.094, as markets assessed the European Central Bank’s policy outlook this year. The ECB left key interest rates unchanged at its July meeting, as expected, contrasting with a significant rate cut last month and reflecting ECB policymakers’ uncertainty that Eurozone inflation is falling fast enough for monetary easing to be warranted.

Trading recommendations

• Support levels: 1.0871,1.0859,1.0807,1.0753,1.0727,1.0718
• Resistance levels: 1.0906,1.0953

The trend on the EUR/USD currency pair on the hourly time frame is bullish, but close to change. The euro price has corrected to the shift level of 1.0871. Buyers are trying to defend their positions here, but the sellers’ pressure intraday remains. The MACD indicator is in the negative zone. It is very important for buyers not to let the price fall below 1.0871, as it will lead to a trend change in this time frame. For buying, it is best to consider the support level of 1.0871, but with confirmation intraday. For selling, the resistance levels of 1.0905 and 1.0934 would be appropriate.

Alternative scenario:

if the price breaks the support level of 1.0871 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2944
• Prev. Close: 1.2911
• % chg. over the last day: -0.26%

The British pound fell below $1.292, moving away from the yearly high of over $1.3 on Wednesday, as traders bet on a possible interest rate cut by the Bank of England in August. The latest data showed retail sales fell 1.2% in June, worse than the 0.4% decline expected. This data, along with slowing wage growth and stable inflation, raised the probability of an August rate cut to 43% from 39% on Thursday.

Trading recommendations

• Support levels: 1.2899,1.2878,1.2824,1.2801,1.2761,1.2741,1.2701
• Resistance levels: 1.2976,1.3012,1.3025

From the point of view of technical analysis, the trend on the GBP/USD currency pair has changed to a downtrend. The price has consolidated below the priority change level. Buyers failed to hold the price. However, the SMT divergence (the euro did not update the low, while the pound updated the low) indicates that the price may be correct. For buying, the support level of 1.2900 can be considered, but with confirmation. For selling, there are no optimal entry points right now.

Alternative scenario:

if the price breaks through the resistance level at 1.3024 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 157.33
• Prev. Close: 157.45
• % chg. over the last day: +0.08%

The latest core inflation data reinforced market expectations that the Bank of Japan (BoJ) may raise interest rates from the current near-zero levels at the July 30–31 meeting. The Japanese yen rose for the second week in a row and is up about 3% from a 38-year low of 161.95 per dollar reached in early July amid suspicions of government interference.

Trading recommendations

• Support levels: 156.61,155.84,154.60
• Resistance levels: 157.83,158.33,159.43,160.20,161.81,162.00.

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The yen is still growing within the correctional movement and seeks to test the zone near the resistance level of 158.33. A move above 158.61 will change the trend in the current time frame. Under such market conditions, we should look for selling from the resistance level of 158.33, but with confirmation. For buying, we should consider the support level at 156.60.

Alternative scenario:

if the price breaks through and consolidates above the resistance level of 158.61, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2445
• Prev. Close: 2400
• % chg. over the last day: -1.86%

Gold fell to $2,400 per ounce on Friday, retreating from record highs as the dollar rose on strong economic data from the US, although the Federal Reserve’s interest rate cut bets remained unchanged. The dollar was supported by stronger-than-expected manufacturing growth figures. Meanwhile, investors are evaluating the impact of President Joe Biden ending his reelection campaign and endorsing Vice President Kamala Harris.

Trading recommendations

• Support levels: 2395,2370,2351,2339,2319,2295,2276
• Resistance levels: 2440,2452,2471,2500

From the point of view of technical analysis, the trend on the XAU/USD is bullish, but close to change. On Friday, sellers unexpectedly took the initiative and easily broke through the support level of 2440, after which the price rushed sharply downward and reached the priority change level of 2385. Buyers are trying to protect positions here, but the sellers’ pressure also persists. In case the price fixes below 2395, the price will rush to 2370. Both of these levels can be considered for buying if buyers react. There are no optimal entry points for selling.

Alternative scenario:

if the price breaks below the 2401 support level, the downtrend will likely resume.