The Analytical Overview of the Main Currency Pairs on 2024.04.26

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0694
• Prev. Close: 1.0729
• % chg. over the last day: +0.33%

Fears of stagflation pressured the dollar on Thursday after the revised US GDP for the first quarter showed slower-than-expected economic growth and persistent price pressures. In turn, the euro found support after Germany’s May GfK Consumer Confidence Index rose more than expected to a 2-year high. The March PCE Price Index inflation report will be released in the US today. The annualized PCE Index is expected to rise from 2.5% to 2.6%. A monthly increase of 0.3% is expected. If the PCE data comes out in line with forecasts, it will only reinforce investors’ belief that the US Fed will postpone rate cuts to a later date. This is an optimistic scenario for the US dollar.

Trading recommendations

• Support levels: 1.0689,1.0632,1.0590
• 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. But the price is approaching the priority change level. The 1.0722 resistance level is being tested for the third time, and each subsequent sellers’ reaction is weaker than the previous one. Considering the latest volumes indicate a buyer, there is a high probability of further growth and a break of the medium-term trend. For buying, it is best to descend to the lower time frames. The 1.0756 priority change level can be considered for sell deals, but with confirmation.

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: 1.2463
• Prev. Close: 1.2512
• % chg. over the last day: +0.39%

There are a few macro statistics for the UK this week. However, this did not prevent the British currency from strengthening against the US dollar. This was mainly due to a decline in the Dollar Index and a reassessment of expectations for the first rate cut from the Bank of England. Previously, the markets expected that the first reduction in the cost of borrowing would take place at the meeting in September. Still, there is a high probability of the first reduction in August.

Trading recommendations

• Support levels: 1.2423,1.2381,1.2312
• Resistance levels: 1.2522,1.2612,1.2634,1.2674,1.2707

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 is already testing the priority change level. At the same time, each subsequent level test indicates the weakness of sales, while the buyers are only increasing their efforts, which can be seen in the reaction to the last volume spike. With these market conditions, the British pound will likely break the mid-downtrend. But on today’s PCE news, the dollar could temporarily strengthen, which would correct GBPUSD quotes to the nearest support levels.

Alternative scenario:

if the price breaks through the resistance level of 1.2522 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 155.25
• Prev. Close: 155.64
• % chg. over the last day: +0.25%

The Japanese yen fell to 156 per dollar, the first time since May 1990, as the Bank of Japan kept interest rates unchanged and maintained all monetary policy settings despite pressure from the sharply declining currency. Aside from the risk of currency intervention and the fact that the yen is severely undervalued, no other significant factors can reverse the USD/JPY uptrend. The yen has also lost its attractiveness as a safe-haven currency.

Trading recommendations

• Support levels: 155.75,155.36,154.75,154.54,153.95
• Resistance levels: 156.50,157.00

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. At the same time, there are no signs of selling. Investors stopped buying the yen as a safe-haven asset amid the inaction of the Bank of Japan, resulting in rapidly growing USD/JPY quotes. If there is no currency intervention before the end of today’s trading day, there is a high probability of growth to 156.50 or even 157–158. It is better to look for intraday buy deals with short stops. Selling on such growth is not recommended.

Alternative scenario:

if the price breaks and consolidates below the support level of 154.55, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2319
• Prev. Close: 2332
• % chg. over the last day: +0.56%

Covering short positions in metals helped boost prices after the Dollar Index fell to a weekly low. In addition, weakness in equities on Thursday boosted demand for precious metals. The March PCE Price Index inflation report will be released in the US today. This index takes its data from the BEA Gross Domestic Product (GDP) report and shows how much money households spend and what they spend. This is why the PCE is the Fed’s preferred inflation gauge of CPI week. For gold and indices to rise now, inflation numbers need to continue to decline, so if today’s data shows inflation to be resilient, it will be a negative for precious metals.

Trading recommendations

• Support levels: 2314,2292,2267,2249,2229,2206
• Resistance levels: 2350,2367,2400

From the point of view of technical analysis, the trend on the XAU/USD is bearish. The support level 2314 did not let the price go lower — buyers took the initiative, after which the price returned to growth. At the same time, the last volume spike showed the presence of a buyer. There is still bullish pressure inside the day, so it is reasonable to look for buying today with the target of 2350. Look further, as it is essential to watch the price reaction. If the sellers activate above 2350, the price may drop sharply.

Alternative scenario:

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