The Analytical Overview of the Main Currency Pairs on 2024.04.17

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0622
• Prev. Close: 1.0618
• % chg. over the last day: -0.04%

On Tuesday, the dollar index reached a 5-month high on the back of hawkish comments from the Fed. Fed Chair Powell, San Francisco Fed President Daly, and Fed Vice Chair Jefferson said that if inflation remains elevated, the Fed will hold interest rates longer. The dollar also received support from the news that US manufacturing output rose more than expected in March. Inflation data will be released today in the Eurozone. Consumer prices are expected to continue to decline, which may put additional pressure on the European currency.

Trading recommendations

• Support levels: 1.0590
• Resistance levels: 1.0660,1.0722,1.0795,1.0816,1.0843,1.0865

The trend on the EUR/USD currency pair on the hourly time frame is bearish. The selling pressure intraday 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: 1.2325
• % chg. over the last day: -0.10%

Inflation data for March will be released today in the UK. Overall, inflationary pressures are expected to continue to ease. Core CPI is forecast to fall from 3.4% to 3.1% y/y, and core CPI (excluding food and energy prices) is forecast to fall from 4.5% to 4.1% y/y. Markets have pushed back the timing of the first UK rate cut to the Bank of England (BoE) meeting on September 19, although an August 1 meeting cannot be ruled out, especially given the weak labor market data released on Tuesday. A cooling labor market and weakening inflationary pressures will force the Bank of England to start the rate-cut cycle earlier. At the same time, geopolitics may also make adjustments. At the moment, the fundamental background for the British currency remains negative.

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 1.2446 support level failed to hold the price. The MACD indicator shows a divergence, which increases the probability of correction, but there is no initiative from the buyers’ side. During the day, sellers still face pressure, and the price may fall to 1.2372. The trigger for such an impulsive fall could be today’s inflation data. Under such market conditions, 1.2446 could be considered for opening sell deals. If the price consolidates above 1.2446 on an impulsive move, a correction to 1.2500 will begin. Also, pay attention to the formation of a narrowing triangle. This formation usually occurs before a sharp move.

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: 154.25
• Prev. Close: 154.69
• % chg. over the last day: +0.28%

Japanese Finance Minister Suzuki’s comments on Tuesday did not support the yen. He said the government is closely monitoring currency market movements but refrained from saying whether the yen’s recent moves could be considered rapid. The yen extended losses on Tuesday and hit a new 33-year low against the dollar. The probability of an intervention is seen as very high.

Trading recommendations

• Support levels: 153.95,153.31,152.38,151.93,151.52,151.14,150.80,150.25
• 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 situation has not changed much. Yesterday, the yen dropped to 154, but buyers quickly restored parity. The Japanese price aims to test 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. Traders should be aware that the Bank of Japan could 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: 2381
• Prev. Close: 2382
• % chg. over the last day: +0.04%

On Tuesday, the US Federal Reserve Governor Powell noted that inflation will take longer to reach the Fed’s target level and restrictive monetary policy will take longer to be effective. Rising interest rates reduce the attractiveness of non-interest-earning assets such as gold. On the other hand, gold is supported by active central bank buying amid escalating tensions in the Middle East.

Trading recommendations

• Support levels: 2363,2319,2300,2267,2249,2229,2206
• 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 the support level of 2336, after which it rose impulsively and reached the supply zone, where sellers reacted. Intraday selling pressure appeared. For selling, the most likely level is the 2400 resistance. For buying, the support level of 2363 is worth considering. But if the price consolidates below 2363, the sell-off could intensify to 2319.

Alternative scenario:

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