The Analytical Overview of the Main Currency Pairs on 2024.04.02

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0787
• Prev. Close: 1.0742
• % chg. over the last day: -0.42%

The dollar index rose to a 4-month high on Monday, trading up 0.48%. The US ISM Manufacturing Index for March rose by 2.5 to 50.3, beating expectations of 48.3 and the highest level in a year and a half. In addition, the dollar was supported by comments from Fed Chairman Powell, who said last Friday that the Fed would not be in a hurry to cut interest rates. As a result, the strengthening of the dollar on Monday put pressure on the euro. EUR/USD quotes fell to a one-month low. Trading activity in the euro was below average on Monday as Eurozone markets were closed due to the Easter holiday.

Trading recommendations

• Support levels: 1.0723
• Resistance levels: 1.0745,1.0762,1.0778,1.0804

The trend on the EUR/USD currency pair on the hourly time frame is bearish. The demand zone failed to hold back the pressure of sellers, which led to the liquidation of buy trades. The price impulsively fell and is now aiming at the support level of 1.0723, below which there is another pocket of liquidity. Oscillators indicate oversold price and divergence. Under such market conditions, sell trades should be sought from the resistance level of 1.0745 but with confirmation in the form of sellers’ reactions. Buying can be considered from 1.0723, but also with confirmation.

Alternative scenario:

if the price breaks through the resistance level of 1.0804 and consolidates above, with a high probability the uptrend will be resumed.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2630
• Prev. Close: 1.2550
• % chg. over the last day: -0.63%

The Bank of England (BoE) has become dovish over the past few days, which means the UK interest rate cut cycle is just around the corner, possibly sooner than the financial markets initially thought. This hurts the British currency, especially against the backdrop of the US dollar Index strengthening to a 4-month high.

Trading recommendations

• Support levels: 1.2501,1.2446
• Resistance levels: 1.2594,1.2641,1.2674,1.2709,1.2765,1.2803

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bearish. Similarly, with the euro, GBP/USD quotes failed yesterday amid the pressure of sellers, and all factors indicate that the price will continue to decline to the support level of 1.2501. The MACD indicator shows the first signs of oversold and divergence, but the buyers’ intraday pressure is weak. Under such market conditions, sell trades should be sought from the moving averages or the resistance levels of 1.2574 or 1.2594. There are no optimal entry points for buying right now.

Alternative scenario:

if the price breaks through the resistance level at 1.2641 and consolidates above it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 151.34
• Prev. Close: 151.64
• % chg. over the last day: +0.20%

The Japanese yen continues to decline, even though Finance Minister Shun’ichi Suzuki reiterated his warning against sharp falls in the currency. He said that the authorities will closely monitor market movements and react appropriately without ruling out any options. The yen’s rapid fall comes because the Bank of Japan’s monetary policy will remain accommodative for some time despite the recent turn to negative rates. The rise in the dollar index also contributes to the yen’s weakening.

Trading recommendations

• Support levels: 151.53,150.83,150.25,149.91,148.91,148.58,148.01,147.06
• Resistance levels: 151.90

From a technical point of view, the medium-term trend of the currency pair USD/JPY is bullish. The price took three trading sessions to accumulate liquidity and break the selling zone. Now, the price again aims at the resistance level of 151.90, with a high probability of intervention. Under such market conditions, buy trades can be considered intraday, but with short-stop and near-term targets. For selling, the 152-152.50 zone can be considered a zone where the price could fall sharply amid currency intervention.

Alternative scenario:

if the price breaks and consolidates below the support level of 150.25, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2242
• Prev. Close: 2250
• % chg. over the last day: +0.35%

Gold halted near $2,235 per ounce on Monday, retreating from morning gains led by a stronger dollar and rising yields, as investors digested the latest macroeconomic data from the US, looking for clues about the start of the Fed’s rate easing cycle. The ISM manufacturing PMI index pointed to the first expansion of the manufacturing sector in 18 months and increased price pressures, leading investors to recalculate their bets on the first Fed rate cut. The probability of a rate cut in June is around 55% compared to the 60% noted on Friday. In the next few days, investors will focus on the JOLTS employment report and the ISM services PMI, which may give a better picture of the US economy.

Trading recommendations

• Support levels: 2247,2233,2206,2188,2149,2157,2131,2110
• Resistance levels: 2265,2300

From the point of view of technical analysis, the trend on the XAU/USD is bullish. Sellers yesterday partially intercepted the initiative intraday from the 2265 resistance level. But the price failed to consolidate below 2235 as buyers came into play. The price rebounded sharply, canceling the selling zone around 2250. The MACD indicator is positive, and intra-day buying pressure remains. Under such market conditions, we should expect further upside prices to test liquidity above 2265. Buying trades are best sought on intraday time frames from moving average levels.

Alternative scenario:

if the price breaks below the support at 2176, the downtrend will likely resume.