The Analytical Overview of the Main Currency Pairs on 2024.04.09

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0835
• Prev. Close: 1.0858
• % chg. over the last day: +0.21%

The dollar gave up early gains on Monday and declined on the back of rising equities, which limited liquidity demand. The euro rose further on Monday thanks to stronger-than-expected reports on Eurozone confidence and German industrial production. Swaps estimate the odds of a 25 bps ECB rate cut at 7% at the next meeting on April 11 and 91% at the next meeting on June 6. Meanwhile, markets estimate the odds of a 25 bps rate cut at 5% for the next FOMC meeting on May 1 and 54% for the next meeting on June 12.

Trading recommendations

• Support levels: 1.0842,1.0825,1.0796,1.0759,1.0743
• Resistance levels: 1.0867,1.0903

The trend on the EUR/USD currency pair on the hourly time frame is bullish. Buying pressure intraday remains, with the price respecting buy-side liquidity void zones and not respecting sell-side liquidity void zones. Under these market conditions, we should expect further growth in the area above 1.0867. The price will probably try to renew the previous week’s high. Buy deals can be sought intraday from the moving average lines or the 1.0842 support level. Selling can be considered from 1.0867, subject to sellers’ reactions.

Alternative scenario:

if the price breaks the support level of 1.0743 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: 1.2623
• Prev. Close: 1.2653
• % chg. over the last day: +0.24%

Data from the Recruitment and Employment Confederation (REC) showed that wages for permanent employees rose slowly in more than three years in March while spending on temporary workers fell by the most since July 2020. This suggests that it is highly likely that the country’s inflation rate will continue to fall, increasing the likelihood of a rate cut from the Bank of England this summer. Money markets forecast a UK rate cut of around 70 basis points this year, especially after the two most hawkish members of the Bank of England abandoned calls for a rate hike at their last meeting.

Trading recommendations

• Support levels: 1.2620,1.2608,1.2594,1.2551
• Resistance levels: 1.2652,1.2674,1.2709

From the technical analysis point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price trades in the selling zone, but there is no downward reaction. This suggests that the price does not respect the sell-side void liquidity area and will move higher. Volatility is declining ahead of important events on Wednesday. Intraday buying can be looked for with a target of up to 1.2674. There are no optimal entry points for selling right now.

Alternative scenario:

if the price breaks the support level of 1.2551 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: 151.55
• Prev. Close: 151.79
• % chg. over the last day: +0.16%

The Japanese yen slid back to 152 per dollar, near multi-decade lows, as stronger-than-expected US labor market and manufacturing data reinforced speculation that the Federal Reserve’s monetary policy may remain restrictive for some time. Meanwhile, the yen is under pressure as the Bank of Japan (BoJ) monetary policy will remain accommodated for some time despite the recent turn to negative rates. Swaps estimate the odds of a 10 bps BoJ rate hike at 0% at the April 26 meeting and 11% at the next meeting on June 14.

Trading recommendations

• Support levels: 151.83,151.52,151.14,150.80,150.25
• Resistance levels: 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 is aiming 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 the sellers do not react, the price may slowly creep up to 152.50. We should be extremely cautious when buying before the selling zone. Sell trades can be considered if sellers react to the selling zone after the price is fixed below the zone.

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: 2323
• Prev. Close: 2339
• % chg. over the last day: +0.68%

The weakening of the dollar on Monday was a favorable factor for metals. In addition, the strong demand for gold from central banks is driving higher prices. The People’s Bank of China (PBoC) continues to increase gold reserves for the 17th consecutive month, bringing the total to 72.75 million troy ounces in March. Turkey, India, Kazakhstan, and some Eastern European countries have also increased their gold purchases this year. Investors await Federal Reserve meeting minutes and key inflation data due later this week, indicating the timing and depth of the widely expected rate cuts.

Trading recommendations

• Support levels: 2337,2321,2300,2267,2249,2229,2206
• Resistance levels: 2350,2400,2450,2500

From the technical analysis point of view, the trend on the XAU/USD is bullish. Gold looks very overbought, the MACD indicator is signaling a divergence, and the rising volume is not leading to further gains. These factors indicate that gold needs a breather in the form of a correction or flat movement. Buying trades can be considered intraday from 2337 to renew the week’s high. Above 2350, sellers may show strong initiative. There are no optimal entry points for selling deals here.

Alternative scenario:

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