The Analytical Overview of the Main Currency Pairs on 2024.08.22

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1112
• Prev. Close: 1.1149
• % chg. over the last day: +0.33%

The euro strengthened to $1.117, the highest level since July 2023, as expectations of a Fed rate cut weakened the US dollar. The Fed’s latest meeting minutes show a likely interest rate cut in September, with speculation that it could be as much as 50 basis points due to the recent revision in non-farm payrolls data. In Europe, markets await key economic data that could influence European Central Bank decisions.

Trading recommendations

• Support levels: 1.1060,1.1017,1.0950,1.0905,1.0884,1.0841,1.0816
• Resistance levels: 1.1156

Alternative scenario:

The EUR/USD currency pair’s hourly trend is bullish. The price has reached the 1.1150 daily resistance level, but there is no seller’s reaction. The latest volume spike indicates buyers’ pressure. However, the MACD divergence in several timeframes simultaneously indicates a high probability of correction. Under such market conditions, intraday, we can look for selling from 1.1156, but with confirmation. The minimum target is 1.1093. There are no optimal entry points for buying now.

Technical indicators of the currency pair:

Trading recommendations

The EUR/USD currency pair’s hourly trend is bullish. The price has reached the 1.1150 daily resistance level, but there is no seller’s reaction. The latest volume spike indicates buyers’ pressure. However, the MACD divergence in several timeframes simultaneously indicates a high probability of correction. Under such market conditions, intraday, we can look for selling from 1.1156, but with confirmation. The minimum target is 1.1093. There are no optimal entry points for buying now.

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: 1.3033
• Prev. Close: 1.3089
• % chg. over the last day: +0.43%

The British pound strengthened to USD 1.30, the highest since July 2023, thanks to the weakening of the US dollar. The dollar fell amid rising expectations of rate cuts, sending the dollar index to its lowest level since 2024. Meanwhile, the UK economy posted strong growth in the second quarter, recovering from last year’s mild recession. However, public sector borrowing reached 3.101 billion pounds ($4.04 billion) in July, the highest for the month since 2021, highlighting the fiscal challenges for the new finance minister.

Trading recommendations

• Support levels: 1.3055,1.2973,1.2932,1.2848,1.2800,1.2726,1.2714,1.2665
• Resistance levels: 1.3140

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bullish. The price broke through the 1.3043 resistance level and rushed higher. The surge in volume confirms this. Considering the divergence on MACD, the price may be correct in the coming days, but with a high probability, the price will try to test the liquidity above 1.3140. Therefore, in the presence of sellers’ initiative, we can look for sell trades, but with a short-stop loss from this level. There are no optimal entry points for buying right now.

Alternative scenario:

if the price breakdown 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: 145.21
• Prev. Close: 145.17
• % chg. over the last day: -0.03%

The Japanese yen traded around 145 per dollar, near its strongest level in two weeks, as the minutes of the latest Federal Reserve meeting showed that most of the representatives agreed that it would be appropriate to start cutting interest rates in September if the data continues to come in as expected. Tomorrow, Japan will release its inflation report. Core inflation is expected to rise from 2.6% to 2.7% y/y, as previously released data from Tokyo has already indicated. Rising inflation is likely to provide further support to the Japanese currency. Any surprise in the form of lower inflationary pressure will be seen as a stumbling block for the Bank of Japan’s policy, which could put pressure on the Japanese currency.

Trading recommendations

• Support levels: 144.50,142.80,140.22,137.26
• Resistance levels: 146.62,148.29,150.88,151.26,153.80

From a technical point of view, the medium-term trend of the currency pair USD/JPY is bearish. The yen continues to strengthen against the dollar, but the dollar has already experienced a correction, which may lead to a corrective growth of USD/JPY quotes. This time, buyers took the initiative from the support level of 144.50, and there is a high probability that the price will correct to the area of 146. There are no optimal entry points for selling now.

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: 2515
• Prev. Close: 2512
• % chg. over the last day: -0.12%

Gold prices rose more than $5.00 per ounce after the close of trading Wednesday afternoon as the minutes from the July 30-31 FOMC meeting were released, which showed that the “overwhelming majority” of officials believe a rate cut in September is likely appropriate. Investor attention will now turn to Fed Chair Powell’s speech on Friday for more information on the outlook for interest rates.

Trading recommendations

• Support levels: 2500,2477,2451,2440,2416,2367,2343
• Resistance levels: 2520

From the point of view of technical analysis, the trend on the XAU/USD is bullish. The price forms a balanced environment in the range of 2500-2520. The trading rules in the balance phase suggest buying from the lower boundary and selling from the upper boundary. Currently, the price is trading in the middle of the range and is considered balanced. A price consolidation below 2500 will open the way to 2480. A consolidation above 2520 will open the way for the price to renew the historical high.

Alternative scenario:

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