The Analytical Overview of the Main Currency Pairs on 2024.06.07

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0870
• Prev. Close: 1.0887
• % chg. over the last day: +0.15%

The euro rose slightly to $1.09 and remains near 2-month highs after the ECB cut key interest rates by 25 bps as expected but signaled a cautious approach to further rate cuts. Policymakers noted that price pressures remain strong and inflation is likely to stay above target over the next year, with interest rates remaining fairly restrictive for as long as necessary to ensure inflation returns to the 2% level.

Trading recommendations

• Support levels: 1.0859,1.0830,1.0803,1.0781,1.0750,1.0713
• Resistance levels: 1.0899,1.0923,1.1000

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The euro has formed a broad consolidation with the boundaries of 1.0860-1.0899. Now, the price is trading near the upper boundary, and opening buy trades before the resistance zone is not recommended. Buy deals should be considered only after the breakout of 1.0899 or if the price will again correct to the 1.0859 lower boundary. Selling can be considered intraday from 1.0899, but with confirmation, as these will be positions against the main slope.

Alternative scenario:

if the price breaks the support level at 1.0827 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2784
• Prev. Close: 1.2789
• % chg. over the last day: +0.04%

The British pound remained near $1.28 in the first week of June, sitting at a 3-month high, after rising 2% in May, as investors looked for clues on the next moves by major central banks. The Bank of England (BoE) is set to keep rates on June 20 at 5.25%, the highest since 2008. Although British inflation has fallen recently, it has not fallen as much as expected, reducing the chances of the Bank of England cutting rates multiple times this year. In addition, political uncertainty surrounding the upcoming general election in early July is weighing on the outlook.

Trading recommendations

• Support levels: 1.2749,1.2740,1.2725,1.2687,1,2668,1.2647,1.2608
• Resistance levels: 1.2804,1.2828

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The situation is very similar to the euro. On the eve of important news on the US labor market, the price is forming wide volatility, trading almost in the center of consolidation at the levels of moving averages. Such market conditions make it difficult to find good entry points, but do not forget that the price remains bullish. Today’s most optimal strategy is to wait for the resistance level of 1.2804 for selling and the 1.2749 support level for buying.

Alternative scenario:

if the price breaks the support level of 1.2693 and consolidates below, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 156.04
• Prev. Close: 155.59
• % chg. over the last day: -0.29%

BoJ Governor Nakamura warned yesterday that the country may miss its 2% inflation target next year if consumption stagnates, dampening hopes for further interest rate hikes. Meanwhile, BoJ Deputy Governor Himino said earlier this week that the central bank should be “very vigilant” about the impact of a weaker yen on the economy and inflation. At the same time, Bloomberg reported that the BoJ is likely to discuss reducing bond purchases at its policy meeting next week.

Trading recommendations

• Support levels: 155.45,155.22,154.60
• Resistance levels: 155.85,156.53,156.93,157.45,157.71,157.98

From a technical point of view, the medium-term trend of the currency pair USD/JPY is bearish. The MACD indicator has become negative, with the price trading below the moving averages. The latest volume spike indicates a bearish reaction. Under these market conditions, we should expect the price to decline to 155.22, but the price may rebound sharply from this level. There are no optimal entry points for selling today.

Alternative scenario:

if the price breaks and consolidates above the resistance level at 156.49, it is very likely that the uptrend will resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2357
• Prev. Close: 2376
• % chg. over the last day: +0.80%

Precious metals rose on Thursday after the ECB cut interest rates by 25 bps. Gold prices rose thanks to increased demand for gold as an inflation hedge after the ECB raised its 2024 inflation forecast for the eurozone. Precious metals also rose amid Thursday’s US economic reports on weekly jobless claims and unit labor costs for the first quarter, which proved dovish for Fed policy. Rate cuts by global central banks will continue to drive gold’s growth in the medium term.

Trading recommendations

• Support levels: 2370,2347,2338,2328,2276,2249,2229,2206
• Resistance levels: 2395,2432,2450,2500

From the technical analysis point of view, the trend on the XAU/USD is bullish. The price is trading above the moving averages, but divergence is starting to form on the MACD indicator. The recent volume spikes show a bullish reaction on an effort-result basis. Under such market conditions, intraday buying should be sought to test the resistance level of 2395, where selling can also be sought, provided the selling side reacts accordingly.

Alternative scenario:

If the price breaks below the support level 2328, the downtrend is likely to resume.