The Analytical Overview of the Main Currency Pairs on 2024.07.23

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0886
• Prev. Close: 1.081
• % chg. over the last day: +0.05%

The US dollar weakened after US President Joe Biden decided to opt out of the 2024 election. Investors are now assessing the implications of this decision for financial markets and global monetary policy. The European Central Bank recently left its policy unchanged, and President Christine Lagarde said the next decision on Sept. 12 will be “wide open.” July flash PMIs for the Eurozone, Germany, and France will be released this week. A slowing contraction in the manufacturing sector and further expansion in the services sector is expected. In addition, Eurozone consumer confidence is estimated to reach its highest level since February 2022.

Trading recommendations

• Support levels: 1.0871,1.0859,1.0807,1.0753,1.0727,1.0718
• Resistance levels: 1.0905,1.0953

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 priority change level of 1.0871. Buyers are trying to defend their positions here, but the sellers’ pressure intraday remains. The MACD indicator has become inactive. 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: 1.2908
• Prev. Close: 1.2928
• % chg. over the last day: +0.15%

Last week, UK Retail Sales for June fell by 1.2%, which exceeded the expected 0.4% decline, increasing the probability of an interest rate cut in August. The decline followed a slowdown in wage growth and inflation above the Bank of England’s 2% target. Investors are now focused on the upcoming PMI indices, which are expected to show an acceleration in manufacturing and services growth in July.

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 is bearish. The price has consolidated below the priority change level. Buyers failed to hold the price. However, the SMT divergence (the euro did not renew the low, while the pound renewed the low) indicates that the price may be correct. For buying, a 1.2900 support level can be considered, but with confirmation. For selling, it is best to target 1.2950.

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: 157.34
• Prev. Close: 157.00
• % chg. over the last day: -0.21%

The Japanese yen is holding steady at around 157.5 per dollar as investors prepare for next week’s Bank of Japan (BoJ) meeting, where it may raise interest rates again to defend its currency. Prime Minister Fumio Kishida also said normalizing the Central Bank’s monetary policy would support Japan’s transition to a growth-oriented economy. The yen has gained about 2% over the past two weeks on suspicions of government intervention, with BoJ data indicating that authorities may have bought nearly 6 trillion yen on July 11-12 through intervention.

Trading recommendations

• Support levels: 155.84,154.60
• Resistance levels: 156.86,1157.83,158.33,159.43,160.20,161.81,162.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. Yesterday, sellers took the initiative from the 156.86 level. The price is once again trading below the moving averages. The MACD indicator is in the negative zone and without signs of reversal. Under such market conditions, we should look for selling from the resistance level of 156.86, but with confirmation. For buying, it’s better to consider the support level of 155.84.

Alternative scenario:

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

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2404
• Prev. Close: 2396
• % chg. over the last day: -0.33%

Gold rose to $2,410 per ounce on Monday thanks to a technical rebound after a nearly 2% drop in the previous session and support from a weakening dollar. The precious metal faced downward pressure last week as the dollar strengthened on stronger-than-expected manufacturing growth, and a rise in weekly jobless claims was attributed to seasonal factors. Investors will now turn their attention to US economic data. The focus will be on the preliminary estimate of GDP growth, personal spending, and income for the second quarter, as well as the June PCE Price Index, which is the Federal Reserve’s preferred inflation gauge.

Trading recommendations

• Support levels: 2391,2370,2351,2339,2319,2295,2276
• Resistance levels: 2400,2440,2452,2471,2500

From the point of view of technical analysis, the trend on the XAU/USD has changed to a downtrend. The price has consolidated below the priority change level. However, the presence of divergence on MACD can immediately send the price into a technical correction. For this, the price needs to consolidate above 2400. In this case, the way to 2440 will be opened. In case the price consolidates below 2391, the price will rush to 2370. For sell deals, we can consider resistance zones above 2400. For buying, it is better to wait for a break above 2400.

Alternative scenario:

if the price breaks and consolidates above the resistance level of 2470, the uptrend will likely resume.