The Analytical Overview of the Main Currency Pairs on 2024.08.26

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1104
• Prev. Close: 1.1192
• % chg. over the last day: +0.79%

The euro rose above $1.118, the highest level since July 2023, helped by the decline in the US dollar after Fed Chairman Jerome Powell hinted that the Federal Reserve may cut interest rates. In addition, the monthly Eurozone inflation expectations report released on Friday came in stronger than expected, which is hawkish for ECB policy. The ECB’s Eurozone inflation expectations indicator for July came in at 2.8%, unchanged from June, which was stronger than expectations of easing to 2.7%.In addition, the 3-year inflation expectations indicator for July unexpectedly rose to 2.4% from 2.3% in June.

Trading recommendations

• Support levels: 1.1132, 1.1164, 1.1104, 1.1060, 1.1017, 1.0950, 1.0905, 1.0884
• Resistance levels: 1.1275

The trend on the EUR/USD currency pair in the hourly time frame is bullish. The sharp rise in price on Friday allowed the price to consolidate above the resistance level of 1.1164, and now the way to 1.1275 is open for the price. It is possible to join the uptrend from the support levels of 1.1164 or from 1.1132. Going below 1.1132 is highly undesirable for buyers. There are no optimal entry points for selling now. Despite the divergence on the MACD indicator, there is no sellers’ initiative.

Alternative scenario:

if the price breaks through the support level of 1.1104 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3087
• Prev. Close: 1.3212
• % chg. over the last day: +0.96%

The British pound gained 1% and surpassed $1.322 — its highest level since March 2022 — after the economic symposium in Jackson Hole, where Bank of England Governor Andrew Bailey and US Federal Reserve Chairman Jerome Powell spoke. Bank of England Governor Andrew Bailey suggested that there could be another interest rate cut shortly to help mortgage holders, noting that inflation is falling faster than expected. He also noted that while inflation is becoming less of a problem, the Bank still needs to be cautious until inflation targets are reliably met after last month’s rate cut from 5.25% to 5%.

Trading recommendations

• Support levels: 1.3175, 1.3137, 1.3075, 1.2973, 1.2932, 1.2848, 1.2800, 1.2726
• Resistance levels: 1.3306

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bullish. The price broke through the resistance level of 1.3137 and rushed higher. Now, the road to 1.3306 is open for the price if no new information comes to the market. Buying should be considered from 1.3175 and 1.3137. Going below 1.3137 is undesirable for buyers. There are no optimal entry points for selling now despite the MACD divergence on the higher time frames.

Alternative scenario:

if the price breakdown the support level of 1.3075 and consolidates below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 146.29
• Prev. Close: 144.39
• % chg. over the last day: -1.32%

The Japanese yen surpassed 144 per dollar, reaching a three-week high, as the hawkish remarks of Bank of Japan Governor Kazuo Ueda contrasted with the dovish stance of Federal Reserve Chairman Jerome Powell. Ueda told parliament on Friday that the Central Bank may adjust monetary policy if its economic estimates prove correct, indicating a willingness to raise rates again. Recent data pointing to solid growth and continued high inflation have supported this stance. On the other hand, Powell reinforced hopes for an interest rate cut in September. In a speech at Jackson Hole on Friday, Powell said it was time for a policy adjustment.

Trading recommendations

• Support levels: 142.69, 144.50, 142.80, 140.22, 137.26
• Resistance levels: 144.44, 145.24, 146.62, 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 price has consolidated below 145. Now, it needs to open the way to 142.69. For sell deals, we can consider the resistance levels of 144.44 and 145.24. A price going above 145.24 is undesirable for sellers. There is no optimal entry point for buying now, despite the divergence on MACD.

Alternative scenario:

if the price breaks above the resistance level of 146.48, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2483
• Prev. Close: 2511
• % chg. over the last day: +1.28%

In his speech in Jackson Hole last week, Powell said that the Fed is ready to adjust its policy, with the timing and extent of rate cuts depending on future economic data. He also noted that labor market risks have increased while inflation risks have declined. The FOMC is now more confident that price growth is approaching the 2% target, which supports the case for lower borrowing costs. These factors are supporting the rise in gold prices. In addition, the appeal of the safe-haven currency for bullion has been boosted by growing concerns about the wider conflict in the Middle East.

Trading recommendations

• Support levels: 2503, 2494, 2479, 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 is still trading in a wide range of 2479–2520. But intraday, there is buying pressure. Currently, the price is trying to test the resistance level of 2520. Buying should be sought from the support level 2503 or the moving average lines. Selling from 2520 is unlikely as the level has been tested several times. A breakout of 2520 will open the way for the price to new all-time highs.

Alternative scenario:

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