The Analytical Overview of the Main Currency Pairs on 2024.08.19

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0966
• Prev. Close: 1.1027
• % chg. over the last day: +0.56%

The Dollar Index fell by 0.50% on Friday amid dovish comments from Chicago Fed Chairman Goolsbee, who said that the US labor market and some leading indicators of the economy are giving alarming signals. The dollar also retreated amid a weaker-than-expected US housing starts report for July. The dollar’s weakness on Friday pushed the euro higher. Investors will be looking forward to Jerome Powell’s speech at the Jackson Hole conference this week. Any hints of a larger rate cut at the September meeting could put additional pressure on the US dollar and trigger further growth of the European currency.

Trading recommendations

• Support levels: 1.1019,1.0950,1.0905,1.0884,1.0841,1.0816
• Resistance levels: 1.1045,1.1138

The trend on the EUR/USD currency pair in the hourly time frame is bullish. Today, at the Asian session, the price reached the 1.1045 resistance level, where sellers have not yet shown any reaction. A consolidation above this level will open the price to 1.1138. But there should be a trigger for such growth. This trigger could be tomorrow’s Eurozone inflation report, the FOMC minutes on Wednesday, or Powell’s speech at the Jackson Hole symposium. If sellers can bring the price back below 1.1045, it will trigger a sell-off to 1.1018 or lower, as the divergence on the MACD indicator is already observed in several time frames.

Alternative scenario:

if the price breaks through the support level of 1.0950 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2854
• Prev. Close: 1.2945
• % chg. over the last day: +0.71%

The British pound is trading near $1.2950, hitting a one-month high. GDP growth slowed slightly in the second quarter and stopped in June, which was in line with expectations. Traders continue to bet that the Bank of England will deliver two more 25bp rate cuts this year. Still, the probability of a rate cut in September remains below 50%, while the probability of rates remaining unchanged is almost 59%. However, according to economists, the pleasant situation the UK is currently in could become “challenging” in the longer term, leading to a slowdown in growth in the third quarter due to the new government’s reform policies.

Trading recommendations

• Support levels: 1.2937,1.2912,1.2848,1.2800,1.2726,1.2714,1.2665
• Resistance levels: 1.2960,1.3012

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bullish. The British pound has taken over the initiative from the euro and looks more confident now. Today, the price reached the resistance level of 1.2960, but currently, there is no reaction from sellers. A breakout and consolidation above this level will open the way for the price to 1.3012. However, since there are no news triggers today, the price will likely be flat in a narrow range near 1.2960.

Alternative scenario:

if the price breaks down the support level of 1.2800 and consolidates below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 149.27
• Prev. Close: 147.59
• % chg. over the last day: -1.14%

The Japanese yen rose to 145.5 per dollar, rebounding sharply from two-week lows on the back of a weaker dollar. Last week, Chicago Fed chief Austan Goolsbee said the US labor market and some leading economic indicators sent worrying signals, citing rising credit card delinquencies. Markets are awaiting Japanese inflation data later this week for clarity on the Bank of Japan’s monetary policy path.

Trading recommendations

• Support levels: 145.40,142.80,140.22,137.26
• Resistance levels: 146.64,148.29,150.88,151.26,153.80

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The yen has sharply strengthened, while the price reversal occurred without any important resistance levels. Currently, the price has reached the support level of 145.42, but there is no buyers’ reaction. If buyers take the initiative from this level, intraday buying can be looked for with a target of 146.64. The price fixing below 145.20 will open the way for the price to fall further to 142.80.

Alternative scenario:

if the price breaks above the resistance level of 150.88, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2456
• Prev. Close: 2507
• % chg. over the last day: +2.07%

Gold rose to a record high of $2,490 per ounce on Friday amid strong demand for safe-haven assets as markets continued to assess the Federal Reserve’s policy outlook. Markets continued to show broad consensus for a 100 bps rate cut by the Federal Reserve over the three remaining decisions this year. The geopolitical situation also favored precious metals. White House officials have warned that an Iranian retaliatory strike on Israel could occur in the coming days. In addition, fears of escalation in Ukraine and Russia were also heard as Ukrainian troops advanced on Russian territory.

Trading recommendations

• Support levels: 2477,2451,2440,2416,2367,2343
• Resistance levels: 2510

From the point of view of technical analysis, the trend on the XAU/USD is bullish. The price has updated the historical maximum and is trading near the psychological level of 2500. The reaction of sellers is weak, and it looks more like a partial closing of positions. But market conditions show that the price is ready to rise further. There are no optimal entry points for selling now. For buying, you should look for levels on intraday time frames.

Alternative scenario:

if the price breaks down the support level of 2451, the downtrend will likely resume.