The Analytical Overview of the Main Currency Pairs on 2024.04.24

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0652
• Prev. Close: 1.0700
• % chg. over the last day: +0.45%

The latest survey showed that business activity in the Eurozone grew by the most in almost a year in April, with Germany returning to growth after nine months of contraction. This allowed the euro to take a temporary lead over the dollar. On the monetary policy front, statements from ECB policymakers hinted at a willingness to start reducing borrowing costs as early as June, with some officials suggesting the possibility of three rate cuts before the end of 2024.

Trading recommendations

• Support levels: 1.0686,1.0632,1.0590
• Resistance levels: 1.0722,1.0795,1.0816,1.0843,1.0865

The trend on the EUR/USD currency pair on the hourly time frame is bearish. EUR/USD quotes are correcting and approaching the priority change level. The latest volume spikes show a bullish reaction. The MACD indicates the pressure on buyers. With a high probability, the price growth will continue. The target is liquidity above 1.0722 or 1.0756. Under such market conditions, buy trades can be considered from the demand zone below 1.0686, provided buyers react correctly.

Alternative scenario:

if the price breaks the resistance level of 1.0756 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2343
• Prev. Close: 1.2447
• % chg. over the last day: +0.84%

The latest PMI survey showed that UK business activity in April rose the most since May 2023, thanks to a sharp increase in output in the services sector. Bank of England Chief Economist Huw Pill said yesterday that the latest economic news brought the first rate cut closer, although he warned that it was still far off. Markets had expected the first cut in borrowing costs at the September meeting, but economists are now betting on August. This reassessment helped the British currency temporarily strengthen against the dollar.

Trading recommendations

• Support levels: 1.2405,1.2381,1.2312
• Resistance levels: 1.2485,1.2520,1.2612,1.2634,1.2674,1.2707.

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bearish. But the price has approached the priority change level. The demand zone of the higher time frame 1.2312–1.2381 indicated the presence of large buyers. Now, the price is trading above the moving averages. The MACD indicates buying pressure. With a high probability, the price will test liquidity above 1.2485. Under such market conditions, buy trades can be sought from the midlines or the support level at 1.2405, provided there is a proper reaction from buyers. There are no optimal entry points for selling right now.

Alternative scenario:

if the price breaks through the resistance level of 1.2485 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 154.83
• Prev. Close: 154.82
• % chg. over the last day: -0.01%

The Japanese yen fell to 154.8 per dollar, hitting new 34-year lows and prompting a senior official to issue a new warning against excessive rate fluctuations. Japanese Finance Minister Shun’ichi Suzuki said last week’s trilateral meeting between the US, Japan, and South Korea laid the groundwork for Tokyo to address extreme currency volatility, his strongest warning yet of possible coordinated intervention.

Trading recommendations

• Support levels: 153.95,153.31,152.38,151.93,151.52,151.14,150.80,150.25
• Resistance levels: 154.75,155.00

From a technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading at historical highs in the zone where there is a high probability of the Bank of Japan’s intervention. Pay attention to the density of the price — all the liquidity void areas are already filled, with volatility decreasing as it approaches the psychological mark of 155 yen per dollar. This is a sign of a sell-off; the fall will be sharp, and plenty of room exists for it. The MACD indicator has become inactive. It is not desirable to buy here. Although most likely, the price will leap to test 155. Selling can be considered in the zone of 154.75–155.00.

Alternative scenario:

if the price breaks and consolidates below the support level of 152.58, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2329
• Prev. Close: 2322
• % chg. over the last day: -0.30%

Gold fell to $2,300 per ounce in the first half of yesterday’s day as investors shifted to riskier assets after tensions in the Middle East eased. However, in the US session, weak US PMI data led to a weaker dollar, putting pressure on bonds. Gold has an inverse correlation to government bond yields, so amid the decline in yields, prices for the yellow metal rose. The fundamental background for gold remains positive until the end of the year.

Trading recommendations

• Support levels: 2315,2292,2267,2249,2229,2206
• Resistance levels: 2350,2363,2400

From the point of view of technical analysis, the trend on the XAU/USD is bearish. The 2292 support level showed the presence of a big buyer. This level was respected by the price earlier and worked again, showing a double bottom. Now, the price is trading at the level of moving averages, forming a narrow, flat accumulation. The price is likely to test the liquidity area below 2315. If there is a buyer response to this area, we will see a rise to 2350. If there is no response, the price may fall sharply to 2292.

Alternative scenario:

if the price breaks and consolidates above the resistance level of 2400, the uptrend will likely resume.