The Analytical Overview of the Main Currency Pairs on 2024.04.03

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0742
• Prev. Close: 1.0768
• % chg. over the last day: +0.24%

The euro traded below $1.08 yesterday, hitting its lowest level since February 14, as investors expect the European Central Bank to ease policy more than the Federal Reserve this year. After German data pointed to a significant slowdown in inflationary pressures in Europe’s largest economy, money markets slightly raised their expectations for future ECB rate cuts. German inflation fell to 2.2% in March, the lowest since mid-2021, while the core rate fell to a near two-year low of 3.3%. In addition, core inflation in France hit a more than two-year low, while Italy and Spain’s rates rose slightly.

Trading recommendations

• Support levels: 1.0758,1.0745,1.0723
• Resistance levels: 1.0778,1.0804

The trend on the EUR/USD currency pair on the hourly time frame is bearish. Yesterday, the price reached the support level of 1.0723, and the buyers took the initiative. Within the downtrend, the corrective movement has started. Currently, the price is trading in the selling zone, but it is too early to sell here, as sellers are not showing activity. Under such market conditions, sell trades can be considered from the 1.0779 resistance level, but with confirmation. Buying can be considered from 1.0758 or 1.0745, but also with confirmation, as the medium-term bias remains bearish.

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: 1.2551
• Prev. Close: 1.2576
• % chg. over the last day: +0.20%

Money markets are now forecasting a rate cut in the US this year of around 60 basis points, while the UK is forecasting a 70 basis point cut, especially after two of the most hawkish Bank of England officials abandoned calls for a rate hike at the last meeting. The British pound hovered below $1.26, remaining near its weakest level since mid-February, as traders increasingly expect the Bank of England to cut interest rates more than the Federal Reserve this year.

Trading recommendations

• Support levels: 1.2556,1.236,1.2501,1.2446
• 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. Like the euro, GBP/USD quotes were corrected yesterday within the bearish trend. The price found support at 1.2539, where buyers showed moderate initiative. Now, the price is trading at the level of moving averages and seeks to test the selling zone at 1.2594-1.2616. It is appropriate to look for sales in this zone but with confirmation in the form of a reverse initiative. Careful buy deals can be considered intraday from 1.2556. A retest of 1.2539 may lead to a further price decline to 1.2501.

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: 151.63
• Prev. Close: 151.54
• % chg. over the last day: -0.06%

The yen recovered from early losses on Tuesday and posted small gains on speculation that Japanese authorities may be close to intervening in currency markets to support the yen after Japan’s Finance Minister Suzuki reiterated on Monday that the Japanese government would take appropriate measures against excessive currency movements. Suzuki cited various internal and external factors for the currency’s recent moves but said some speculative moves do not reflect fundamentals. The probability of an intervention remains high.

Trading recommendations

• Support levels: 151.53,150.83,150.25,149.91,148.91,148.58,148.01,147.06
• Resistance levels: 151.62,151.90,152.50

From a technical point of view, the medium-term trend of the currency pair USD/JPY is bullish. The Japanese price is now trading between two zones. Sellers are trying to build a zone above 151.62, but the buying zone is much wider, allowing buyers to build their positions. The MACD indicator has become inactive, while the price is trading at the level of the moving averages. Under such market conditions, buying should be considered after the price consolidates above 151.62. Sell trades will be appropriate above 151.90 or below 151.39.

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: 2250
• Prev. Close: 2280
• % chg. over the last day: +1.33%

Gold prices rose to $2280 per ounce, reaching new record highs. The high value of gold is attracting individual investors. Recent data indicate that the US economy continues to be resilient, giving the Federal Reserve additional leeway to keep interest rates high for an extended period. The focus will now turn to Friday’s March jobs report and speeches from several Fed officials for more clarity on the easing cycle.

Trading recommendations

• Support levels: 2275,2266,2249,2235,2206,2188,2149,2157,2131,2110
• Resistance levels: 2300

From the point of view of technical analysis, the trend on the XAU/USD is bullish. The price rushed into space again, and resistance levels were not noticed. The nearest psychological level is 2300. The moving lines support the trend well, and the price respects the lines. However, the divergence on the MACD indicator indicates that the margin of safety is beginning to be exhausted. However, sellers have not taken the initiative, so it is too early to discuss a correction. Under such market conditions, it is worth looking for buy deals within the bullish trend. The nearest support zone is 2265-2275. There is no place for selling now.

Alternative scenario:

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