The Analytical Overview of the Main Currency Pairs on 2024.04.15

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0724
• Prev. Close: 1.0640
• % chg. over the last day: -0.79%

Friday’s headlines about a possible Iranian attack on Israel quickly brought geopolitical issues to the forefront and triggered a bout of risk aversion before the weekend. Market participants sought to minimize risk as much as possible, fearing a potential gap-up risk at Monday’s market open if an attack were to occur. This put pressure on all risk assets against the US dollar. Geopolitical tensions in the Middle East will keep the euro under pressure in the short term. Concerns over possible Israeli retaliation following the Iranian attack on Saturday could escalate tensions in the region, causing anxiety in the markets and putting pressure on high beta currencies.

Trading recommendations

• Support levels: 1.0590
• Resistance levels: 1.0653,1.0722,1.0795,1.0816,1.0843,1.0865

The trend on the EUR/USD currency pair on the hourly time frame is bearish. The euro price fell below 1.0653 and is trading below the moving averages. Selling pressure remains, but the divergence on the MACD indicator indicates a possible correction. The price is rising on falling volumes, indicating a lack of interest from buyers. Under such market conditions, looking for sell trades from the resistance level of 1.0653 is better, with the target up to 1.0590. If the price consolidates above 1.0660 and buyers take the initiative intraday, a correction to 1.0700 is very likely.

Alternative scenario:

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

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2553
• Prev. Close: 1.2448
• % chg. over the last day: -0.84%

The British pound was also pressured by risk aversion on Friday. UK employment and inflation reports will be released this week. Markets have pushed back the timing of the first UK rate cut to the Bank of England meeting on September 19. However, an August 1 meeting cannot be ruled out, especially if labor market data is weak amid easing inflationary pressures. Geopolitics will also make adjustments. At the moment, the fundamental background for the British currency is negative.

Trading recommendations

• Support levels: 1.2446
• Resistance levels: 1.2511,1.2612,1.2634,1.2674,1.2707

From the technical analysis point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The price reached the support level of 1.2449, and buyers reacted moderately. The MACD indicator indicates a divergence, increasing the correction probability. Under such market conditions, evaluating the sellers’ reaction to the supply zone is important. It should be fast and sharp. If this does not happen, the price will smoothly fill this zone and rise to 1.2511.

Alternative scenario:

if the price breaks through the resistance level of 1.2578 and consolidates above it, the uptrend will likely be resumed.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 153.24
• Prev. Close: 153.24
• % chg. over the last day: 0.0%

On Friday, the Japanese yen traded steadily against the dollar at the end of the day. But at Monday’s open, the yen slipped to 153.8 per dollar, hitting new 34-year lows, as geopolitical risk and strong US economic data dampened hopes of multiple interest rate cuts by the Federal Reserve this year. Markets now estimate the total amount of Fed easing in 2024 at just 40 basis points, down from around 60 basis points early last week. The yen has weakened despite repeated warnings from Japanese authorities. On Friday, Finance Minister Shun’ichi Suzuki said they were not just looking at levels but analyzing the factors causing such moves. The probability of intervention is estimated as high.

Trading recommendations

• Support levels: 153.31,152.38,151.93,151.52,151.14,150.80,150.25
• Resistance levels: 154.00

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 the liquidity above 154. Economists expect the Bank of Japan to intervene if the rate reaches the 154-155 range. The price is now trading at an all-time high and has deviated strongly from the moving averages. It is already high to buy and too early to sell as the sellers have no initiative. The best decision would be to refrain from yen positions today.

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: 2372
• Prev. Close: 2344
• % chg. over the last day: -1.19%

On Monday, gold rose by 0.6% from the opening on the back of rising tensions in the Middle East due to Iran’s attack on Israel. Iran’s attack over the weekend heightened fears of a broader regional conflict, raising stability concerns and driving strong demand for safe-haven assets. Meanwhile, strong economic data, particularly last week’s unexpectedly high US inflation reading, has caused investors to revise their forecasts on the timing and extent of Fed rate cuts this year. The fundamental background for metals remains bullish.

Trading recommendations

• Support levels: 2334,2322,2300,2267,2249,2229,2206
• Resistance levels: 2400,2450,2500

From the point of view of technical analysis, the trend on the XAU/USD is bullish. But Friday’s correction has resulted in gold trading below its moving averages. There is weak selling pressure intraday, with a supply zone above 2373. The correction in gold is likely incomplete, and the price will drop further. The most likely levels for selling are 2373 or 2400, provided sellers react. There are no optimal entry points for buying.

Alternative scenario:

if the price breaks below the support at 2319, the downtrend will likely resume.