The Analytical Overview of the Main Currency Pairs on 2024.07.30

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0856
• Prev. Close: 1.0821
• % chg. over the last day: -0.32%

Traders are awaiting the release of key economic data this week to revise their prognoses for the ECB interest rate cut. Preliminary second-quarter GDP growth and inflation data from the Eurozone, Germany, France, Italy, and Spain will provide an update on the currency bloc’s economic performance and price pressures. Last week, flash Eurozone PMI indices pointed to an unexpected stagnation in private sector activity in July. Traders currently estimate the probability that the ECB will cut interest rates again in September at almost 90%.

Trading recommendations

• Support levels: 1.0772,1.0753,1.0727,1.0718
• Resistance levels: 1.0827,1.0842,1.0869,1.0884,1.0905,1.0953

The trend on the EUR/USD currency pair on the hourly time frame is bearish. Yesterday, the price consolidated below the support level of 1.0827, and now there is a high probability of a decline to 1.0872. However, considering the divergence on the MACD indicator, the price may have risen to 1.0942 before. It is important for sellers not to let the price to consolidate above 1.0842, otherwise, buyers may retake the initiative.

Alternative scenario:

if the price breaks the resistance level at 1.0897 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2873
• Prev. Close: 1.2862
• % chg. over the last day: -0.09%

The British pound fell to $1.28, its lowest level since July 9, as traders await the Bank of England’s monetary policy decision on August 1. Nearly 50% of traders are betting that the Bank of England will begin its rate-cutting cycle in August and cut its key interest rate to 5% from a 16-year high of 5.25%. However, the chances of lower borrowing costs have diminished after unexpectedly strong GDP growth of 0.4% in May and stronger-than-expected services inflation of 5.7%. Despite this, the core inflation rate is now at 2% and the unemployment rate is holding at its highest level of 2021 at 4.4%.

Trading recommendations

• Support levels: 1.2824,1.2801,1.2761,1.2741,1.2701
• Resistance levels: 1.2868,1.2909,1.2941,1.2976,1.3012,1.3025.

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bearish. Yesterday, the price reached the support level of 1.2824, where the buyers took the initiative. But the resistance level of 1.2868 became a stumbling block for the growth, and sellers are now pushing the price down again. Under such market conditions, intraday selling should be sought with a target of 1.2824. It is important for the sellers not to let the price consolidate above 1.2868. Otherwise, the probability of a reversal will increase sharply.

Alternative scenario:

if the price breaks through the resistance level at 1.2888 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 153.67
• Prev. Close: 154.00
• % chg. over the last day: +0.21%

The Bank of Japan (BoJ) will hold its monetary policy meeting tomorrow. Markets are betting that the Central Bank will raise rates by 10 basis points to 0.1% and is expected to outline its plans for quantitative tightening. Swaps put the probability of a rate hike at 68%. The yen has been rising since mid-July, initially driven by suspicions of Japanese government meddling. On the other hand, the yen’s impressive rebound in July may cause policymakers to pause the urgency of a rate hike. Therefore, if the Bank of Japan leaves rates unchanged at this meeting, it may cause negativity among investors buying the yen in anticipation of a reversal of the bank’s policy, leading to a fall in the yen.

Trading recommendations

• Support levels: 153.22,151.45,150.80,149.65
• Resistance levels: 155.50,157.18,157.83,158.33

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. But intraday, the bias is now for the buyers. The resistance zone above 154.22 failed to hold the price. Under such market conditions, intraday buying should be sought with a minimum target of 155.50. There are no optimal entry points for selling right now.

Alternative scenario:

if the price breaks through and consolidates above the resistance level of 157.18, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2389
• Prev. Close: 2383
• % chg. over the last day: -0.25%

Gold settled near $2,380 per ounce on Tuesday after some losses in the previous session as investors await upcoming Central Bank meetings this week. The US Federal Reserve is expected to leave interest rates unchanged on Wednesday, but all eyes will be on any sign of a potential rate cut in September. Meanwhile, the Bank of Japan is expected to raise rates by 10 basis points to 0.1%, and opinions are divided on whether the Bank of England will start to reduce borrowing costs.

Trading recommendations

• Support levels: 2370,2400,2391,2370,2351,2339,2319,2295,2276
• Resistance levels: 2401,2434,2451,2471,2500

From the point of view of technical analysis, the trend on the XAU/USD is bearish. Yesterday, the price reached the support level of 2370, where the buyers took the initiative. Currently, the price is trading in the selling zone, but the sellers’ initiative is weak. Under such market conditions, intraday buying should be sought up to the level of 2401. Selling can be sought from the resistance level of 2401, subject to sellers’ reactions.

Alternative scenario:

if the price breaks and consolidates above the resistance level of 2432, the uptrend will likely resume.