The Analytical Overview of the Main Currency Pairs on 2024.04.16

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0635
• Prev. Close: 1.0623
• % chg. over the last day: -0.11%

On Monday, the euro initially increased after the Eurozone industrial production showed a gain in February. However, in the US session, the euro gave up its early gains and moved lower after several ECB officials expressed support for an ECB interest rate cut in June, which is dovish for ECB policy. In addition, a stronger US retail sales report helped to strengthen the dollar yesterday and put additional pressure on the European currency.

Trading recommendations

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

Alternative scenario:

The EUR/USD currency pair’s hourly trend is bearish. Intraday selling pressure remains, but the divergence on the MACD indicates a possible correction. The price is declining on falling volumes, indicating sellers’ interest is disappearing. Under such market conditions, looking for sell trades from the moving average lines with a target of 1.0590 is best. If the price consolidates above 1.0660 and buyers take the initiative intraday, a correction to 1.0700-1.0722 is very likely.

Technical indicators of the currency pair:

Trading recommendations

The EUR/USD currency pair’s hourly trend is bearish. Intraday selling pressure remains, but the divergence on the MACD indicates a possible correction. The price is declining on falling volumes, indicating sellers’ interest is disappearing. Under such market conditions, looking for sell trades from the moving average lines with a target of 1.0590 is best. If the price consolidates above 1.0660 and buyers take the initiative intraday, a correction to 1.0700-1.0722 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: 1.2438
• Prev. Close: 1.2447
• % chg. over the last day: +0.07%

Bank of England (BoE) spokeswoman Megan Green said that a UK rate cut should still be a long way off, citing the greater threat of persistent inflation in the UK compared to the US. Economists have adjusted their forecasts for interest rate cuts from the BoE this year. The bank rate is expected to fall to around 4.75% by the end of 2024, down from today’s 5.25%, which differs from the previous forecast of a cut to 4.5% by December.

Trading recommendations

• Support levels: 1.2372
• Resistance levels: 1.2446,1.2511,1.2612,1.2634,1.2674,1.2707

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The price reached the support level of 1.2449, and buyers reacted moderately. But it was not possible to keep the price above the level. The MACD indicates divergence, which increases the probability of correction, but the buyers have no initiative. During the day, sellers still face pressure, and the price may fall to 1.2372. Under such market conditions, the 1.2446 level could be considered for selling on an appropriate reaction. If the price consolidates above 1.2446 on an impulsive move, a correction to 1.2500 will begin.

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: 153.01
• Prev. Close: 154.26
• % chg. over the last day: +0.81%

USD/JPY gained 0.81% on Monday. The yen fell to a new 33-year low against the dollar. A Reuters report published on Monday exerted pressure on the yen, saying that Bank of Japan (BoJ) officials are wary of winding down stimulus too soon and may not be ready to raise interest rates even if inflation forecasts are upgraded.

Trading recommendations

• Support levels: 153.31,152.38,151.93,151.52,151.14,150.80,150.25
• Resistance levels: 154.50,155.00

From a technical point of view, the medium-term trend of the currency pair USD/JPY is bullish. The Japanese price aims to test the liquidity above 155. 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. However, one should be prepared to know that the Bank of Japan may intervene at any time.

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: 2358
• Prev. Close: 2383
• % chg. over the last day: +1.06%

Precious metals recovered early losses and headed higher amid increased demand for safe-haven assets following reports from Israeli Defense Minister Gallant that Israel has no choice but to retaliate against Iran for its drone missile attack on Israel over the weekend. In addition, Monday’s decline in the S&P 500 Index (US500) to a one-month low sparked demand for precious metals.

Trading recommendations

• Support levels: 2363,2322,2300,2267,2249,2229,2206
• Resistance levels: 2400,2450,2500

From the technical analysis point of view, the trend on the XAU/USD is bullish. Yesterday, the price tested liquidity below Friday’s low, after which it jumped impulsively and closed above the moving average lines. Intraday buying pressure remains in place. For sell deals, the most reliable level is resistance at 2400, provided sellers react. For buying, the support level of 2362 is worth considering.

Alternative scenario:

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