The Analytical Overview of the Main Currency Pairs on 2024.08.28

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1158
• Prev. Close: 1.1184
• % chg. over the last day: +0.23%

Investors became more cautious ahead of the Eurozone inflation data for August, which may affect the ECB monetary policy. Inflation in Germany and the Eurozone is expected to be at its lowest level in three years. Although ECB officials have indicated a cautious approach to rate cuts, markets are still pricing in the possibility of a rate cut of about 65 basis points by the end of the year. Meanwhile, the US Federal Reserve officials have hinted at an upcoming rate cut. In France, political tensions have risen as President Macron is trying to form a new government, while the Socialists and Greens refuse to participate in negotiations.

Trading recommendations

• Support levels: 1.1150,1.1132,1.1104,1.1060,1.1017,1.0950,1.0905,1.0884
• Resistance levels: 1.1185,1.1275

The trend on the EUR/USD currency pair in the hourly time frame is bullish. The price is forming a flat corridor with the boundaries of 1.1150–1.1185. It is possible to join the uptrend from the support levels of 1.1150 or 1.1132 but with confirmation. Going below 1.1132 is highly undesirable for buyers. There are no optimal entry points for selling now.

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: 1.3184
• Prev. Close: 1.3261
• % chg. over the last day: +0.58%

On Tuesday, sterling reached a two-year high against the dollar and rose against the euro thanks to bets that the Bank of England would cut rates less sharply than the Federal Reserve and that the British economy would outperform the Eurozone. The dollar came under pressure in August as traders became more confident of a significant Fed rate cut this year, and the pound was one of the beneficiaries. Markets are now counting on 100 basis points of rate cuts at the Fed’s three remaining meetings this year, compared to 40 basis points for the Bank of England.

Trading recommendations

• Support levels: 1.3204,1.3175,1.3137,1.3075,1.2973,1.2932,1.2848,1.2800
• Resistance levels: 1.3306

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bullish. The British currency continues to strengthen. The road to 1.3306 is currently open for the price, unless the market receives new information. The MACD divergence indicates a possible correction. Buying should be considered from 1.3204 or 1.3175. A move 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 breaks down 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: 144.52
• Prev. Close: 143.93
• % chg. over the last day: -0.41%

The Japanese yen continues to slowly strengthen against the dollar. Last week, Bank of Japan Governor Kazuo Ueda told the parliament that the Central Bank may adjust monetary policy if its economic estimates prove correct, indicating a willingness to raise rates again. On the other hand, Federal Reserve Chairman Jerome Powell said in a speech in Jackson Hole that it is time to adjust policy. Thus, the reduction of the interest rate differential between banks will contribute to the strengthening of the yen against the dollar in the medium term.

Trading recommendations

• Support levels: 142.69,142.80,140.22,137.26
• Resistance levels: 144.61,145.24,146.62,148.29,150.88,151.26,153.80.

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The price did not reach the resistance level of 145.24 and reversed earlier. Now, for the price, the way is open to 142.69. Resistance levels 144.61 and 145.24 can be used for selling, but with confirmation. Going above 145.24 is not desirable for sellers. There is no optimal entry point for buying now, despite the intraday buying pressure.

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: 2518
• Prev. Close: 2524
• % chg. over the last day: +0.23%

Gold continues to shine. Yellow metal recently climbed above the $2,500 mark, and industry leaders have expressed strong confidence that its bull market will continue. The surge in gold prices to record levels in recent weeks has been driven by a combination of economic factors and investor sentiment. One of the main drivers of this rise has been the growing expectation of a rate cut by the Federal Reserve. In addition, a weakening US dollar, which often correlates with expectations of lower interest rates, has further supported gold’s rise, and concerns about a slowing global economy have also contributed to its appeal. And the situation will not change in the near future.

Trading recommendations

• Support levels: 2503,2494,2479,2451,2440,2416,2367,2343
• Resistance levels: 2527,2532

From the point of view of technical analysis, the trend on the XAU/USD is bullish. The price is trading in a wide range of 2503–2526. Today, the price tested liquidity above 2526, where sellers showed initiative. Inside the day, selling prevails. Buying should be sought from the support level of 2503 or 2494 but with confirmation. A move below 2494 will open the price to 2572.

Alternative scenario:

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