The Analytical Overview of the Main Currency Pairs on 2024.04.10

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0856
• Prev. Close: 1.0856
• % chg. over the last day: 0.0%

The euro is holding near $1.08 as investors remain cautious ahead of key US inflation data today and ahead of Thursday’s European Central Bank policy meeting. Economists expect US core inflation, which excludes food and fuel costs, to slow to 3.7% year-on-year from 3.8% in the previous month. However, overall inflation may rise to 3.2% y/y from 3.4% y/y. If the data comes out in line with forecasts, it would mean a mixed report for the US Fed. ECB officials are also expected to keep interest rates at a record high for the sixth consecutive meeting on Thursday, with all eyes turning to the wording of the statement and ECB President Lagarde’s press conference for further clues on the timing of the first-rate cut this year.

Trading recommendations

• Support levels: 1.0842,1.0815,1.0796,1.0759,1.0743
• Resistance levels: 1.0867,1.0903

The trend on the EUR/USD currency pair on the hourly time frame is bullish. Yesterday, the price reached the selling zone above 1.0867, and sellers again took the initiative. The price is correcting, and the divergence on MACD indicates that the decline could be more significant. Under these market conditions, price reaction to liquidity void zones should be monitored. Buy trades are best considered from the support zone below 1.0842 or, if a stronger correction, from 1.0815. For sell deals, the resistance level of 1.0867 would be suitable if a seller reacts.

Alternative scenario:

if the price breaks the support level of 1.0790 and consolidates below it, the downtrend will be resumed with a high probability.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2653
• Prev. Close: 1.2673
• % chg. over the last day: +0.18%

The British pound is holding near $1.2650 as investors worldwide await Wednesday’s release of US Consumer Price Index data for March, which is expected to indicate when the Federal Reserve may start cutting interest rates. Any surprise in the form of continued inflationary pressures will support the US dollar, especially as FOMC policymakers again discuss the possibility of keeping rates on hold for longer on the back of strong economic data. In addition, the UK’s monthly GDP data, released on Friday, will be under scrutiny.

Trading recommendations

• Support levels: 1.2634,1.2608,1.2594,1.2551
• Resistance levels: 1.2674,1.2709

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish. But yesterday, the price reached the resistance level of 1.2709 when sellers showed a sharp initiative. The last buy zone was filled without buyers’ reaction. Hence, we should expect a deeper correction, especially considering the divergence in MACD. Under such market conditions intraday, one should look for selling from the void liquidity zone above 1.2674. Support levels of 1.2634 and 1.2608 should be considered for buying, provided buyers react.

Alternative scenario:

if the price breaks the support level of 1.2574 and consolidates below, the downtrend will be resumed with a high probability.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 151.77
• Prev. Close: 151.73
• % chg. over the last day: -0.03%

The Japanese yen weakened to 152 per dollar, near multi-decade lows and triggering new verbal interventions from the authorities. Finance Minister Shun’ichi Suzuki said Tuesday that the authorities did not rule out any measures to combat excessive yen movement, echoing warnings in his previous statements. Bank of Japan Governor Kazuo Ueda also said the central bank should consider reducing the degree of monetary stimulus if inflation continues to accelerate.

Trading recommendations

• Support levels: 151.52,151.14,150.80,150.25
• Resistance levels: 151.83,151.94,152.50

From a technical point of view, the medium-term trend of the currency pair USD/JPY is bullish. The Japanese price seeks to test liquidity above 152. The question is, what will the price reaction be to this test? If sellers show a sharp initiative, it may cause a wave of sell-offs in the background of the expected intervention, which is very likely in the range of 152-153. If sellers do not react, the price may slowly creep up to 152.50. Buying could be considered intraday from the moving average lines or the 151.52 support level.

Alternative scenario:

if the price breaks and consolidates below the support level of 150.80, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2338
• Prev. Close: 2353
• % chg. over the last day: +0.64%

Gold rose to $2,350 per ounce. Bullion remains on an upward trend as central banks plan to cut interest rates this year, while retail demand for the yellow metal is rising. Bank of America predicts the metal’s price could rise to $3,000 per ounce by 2025. But remember, the asset cannot grow without corrections, and gold looks overbought. Therefore, any trigger for dollar growth can cause sell-offs of precious metals. And such a trigger today could be the US inflation report or FOMC minutes.

Trading recommendations

• Support levels: 2337,2321,2300,2267,2249,2229,2206
• Resistance levels: 2364,2400,2450,2500

From the technical analysis point of view, the trend on the XAU/USD is bullish. Gold looks overbought, the MACD indicator is signaling divergence, and rising volumes lead to weak price gains. These factors indicate that gold needs a breather in the form of a correction or flat movement. Buy trades can be considered intraday from 2337 or 2331 to renew the week’s high. Resistance at 2364 could turn the price into a correction if today’s inflation report shows rising consumer prices.

Alternative scenario:

if the price breaks below the support at 2267, the downtrend will likely resume.