The Analytical Overview of the Main Currency Pairs on 2024.09.02

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1117
• Prev. Close: 1.1077
• % chg. over the last day: -0.36%

The European Central Bank should not cut interest rates too quickly as the risks of inflation returning to the 2% level remain, according to Isabel Schnabel of the Executive Board. While the data broadly confirmed the ECB’s baseline estimate, reinforcing confidence that the price target can be reached by the end of 2025, services inflation remains elevated and may yet hold back the overall retreat, Schnabel said on Friday. Data showing moderate wage growth in the Eurozone is in favor of a rate cut in September because inflation slowed to a three-year low in August.

Trading recommendations

• Support levels: 1.1050,1.1017,1.0950,1.0905,1.0884
• Resistance levels: 1.1100,1.1146,1.1191,1.1275

The trend on the EUR/USD currency pair in the hourly time frame is bearish. The price is trading below the moving averages reaching the support level of 1.1050, where there is a partial fixation of sales, but the initiative of buyers is not enough for the reversal. Given the fact that today is a bank holiday in the US, the price is likely to be trading in a narrow flat. There are no optimal entry points for selling now. It is possible to look for intraday buying but with a short stop loss.

Alternative scenario:

if the price breaks through the resistance level of 1.1191 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3163
• Prev. Close: 1.3127
• % chg. over the last day: -0.27%

Thursday, September 19, will see the Bank of England rate decision, where the markets are currently not expecting any changes, which is positive for the sterling exchange rates. It looks like the Bank of England will be less aggressive in cutting rates this cycle, which will favor sterling exchange rates, but if the outlook changes, the pound will weaken. The Bank of England will likely wait for the fall budget before making any changes to monetary policy.

Trading recommendations

• Support levels: 1.3103,1.3055,1.2973,1.2932,1.2848,1.2800
• Resistance levels: 1.3158,1.3201,1.3306

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bullish, but close to the shift. The price has declined to the priority change level. Buyers are trying to stop the decline, but sellers’ pressure intraday is still prevailing. With such market conditions intraday, you can look for buying, but with a short stop loss. For selling, we can consider the resistance level of 1.3158, but with confirmation.

Alternative scenario:

if the price breaks down the support level of 1.3109 and consolidates below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 144.92
• Prev. Close: 146.15
• % chg. over the last day: +0.85%

On Friday, the yen was pressured by weak economic reports from Japan. Industrial production in Japan for July rose by 2.8% m/m, weaker than expectations of 3.5% m/m. Retail Sales in Japan for July increased by 0.2% m/m, weaker than expectations of 0.4% m/m. Japan’s unemployment rate for July unexpectedly rose by 0.2% to a 17-month high of 2.7%, indicating a weaker labor market than expectations of no change at 2.5%.

Trading recommendations

• Support levels: 145.22,144.70,144.09,142.69,142.80,140.22,137.26
• Resistance levels: 146.48,146.62,148.29,150.88,151.26,153.80.

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish, but it is close to changing. The price has reached the level of priority change, but sellers are trying to hold this level with new sales. Inside the day, you can look for sell deals, but with a short stop loss. There are no optimal entry points for buying now, as there are 2 resistance levels in front of the price.

Alternative scenario:

if the price breaks above the resistance level of 146.48, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2521
• Prev. Close: 2503
• % chg. over the last day: -0.72%

The strengthening of the dollar on Friday put pressure on the prices of precious metals. Economic data released last week showed that US core and core PCE prices rose 0.2% in July, meeting expectations. This dampened expectations of a significant 50bps Fed rate cut in September and was in line with the general backdrop of the economy’s resilience to higher interest rates following the upward revision of GDP. In addition, hawkish comments from ECB executive board spokeswoman Schnabel dragged gold prices lower today when she stated that the ECB should not cut interest rates too quickly. Nevertheless, markets still expect a 100bp rate cut over the remaining three Fed meetings this year, which will support bullion prices.

Trading recommendations

• Support levels: 2494,2479,2451,2440,2416,2367,2343
• Resistance levels: 2509,2532

From the technical analysis point of view, the trend on the XAU/USD is bullish. However, sellers managed to lower the price to 2494. Here, the buyers are trying to buy back the price, so intraday today, you can look for buying with a short stop loss. The profit target is the resistance zone near 2509. However, the price may remain flat in a narrow corridor due to the weekend in the United States. A move below 2494 could trigger a sharp sell-off.

Alternative scenario:

if the price breaks down the support level of 2451, the downtrend will likely resume.