The Analytical Overview of the Main Currency Pairs on 2024.06.14

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0807
• Prev. Close: 1.0737
• % chg. over the last day: -0.65%

The euro came under pressure yesterday after Thursday’s economic news showed an unexpected decline in the Eurozone’s April industrial production. In addition, political uncertainty in France continues to weigh on the euro after French President Macron called for early parliamentary elections on Sunday. Markets rate the odds of a 25bp rate cut at 12% at the 30–31 July FOMC meeting and 65% at the next meeting on 17–18 September. Swaps also estimate the odds of a 25bp ECB rate cut at 13% for the 18 July meeting and 62% for the 12 September meeting.

Trading recommendations

• Support levels: 1.0733,1.0713
• Resistance levels: 1.0773,1.0818,1.0859,1.0902,1.0923,1.1000

The trend on the EUR/USD currency pair on the hourly time frame is bearish. The sellers retook the initiative quite quickly, and the latest volume spikes indicate the presence of a big seller. The price again trades below the moving averages, with the MACD indicator negative. Price will likely renew this week’s low and test liquidity below 1.0713. Therefore, the bias is bearish, and it is worth looking for sell trades inside. But we should consider that the price may be corrected to 1.0773.

Alternative scenario:

if the price breaks the resistance level of 1.0859 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2794
• Prev. Close: 1.2761
• % chg. over the last day: -0.25%

GBPUSD quotes are declining due to the strengthening of the Dollar Index. The US dollar rose by 0.52% on Thursday. The dollar is rising on the positivity that emerged on Wednesday when the FOMC projected a rate cut of only 25 bps this year compared to 75 bps in March, which is a strong hawkish factor. There are virtually no factors for appreciation for the British currency until next week’s Bank of England meeting.

Trading recommendations

• Support levels: 1.2739,1.2705,1.2687,1,2668,1.2647,1.2608
• Resistance levels: 1.2800,1.2828

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is still upward. However, conditions are forming for a structure change: the price trades below the moving averages, the MACD indicator is negative, and the latest volume spikes indicate a bearish reaction. Under such market conditions, intraday selling should be sought with a target to 1.2705. There are no optimal entry points for buying right now.

Alternative scenario:

if the price breaks the support level of 1.2705 and consolidates below, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 156.69
• Prev. Close: 157.01
• % chg. over the last day: +0.20%

The Japanese yen fell to 158 per dollar, hitting its lowest level in six weeks, as the Bank of Japan (BoJ) decided to leave interest rates unchanged in June as expected after the first rate hike in seven years at its March meeting. The BoJ also said it would buy Japanese government bonds at the current pace and decide whether to reduce bond purchases at its next meeting in July, defying market expectations that the BoJ would announce a cut in bond purchases this month.

Trading recommendations

• Support levels: 157.58,157.33,156.52
• Resistance levels: 157.98,158.29

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The Japanese yen continues to lose ground against the dollar and other currencies due to the interest rate differential between the Bank of Japan and other leading central banks. The price has now reached the resistance zone at 157.98–158.29, where some fixing of previously opened purchases may take place. Since the price has deviated a lot from the moving averages, buying in front of the resistance zone is not recommended. For buying, it is best to consider the support zone at 157.33–157.58. There are no entry points for selling as there is no initiative from the sellers.

Alternative scenario:

if the price breaks below the support level of 155.85, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2324
• Prev. Close: 2304
• % chg. over the last day: -0.86%

Gold declined on Thursday but held above the $2,300 per ounce mark. Investors priced in softer-than-expected US inflation data and the Federal Reserve’s updated interest rate estimates. Data released on Thursday showed that the US Producer Price Index unexpectedly declined in May amid lower energy costs, indicating that inflationary pressures continue to ease. This followed lower-than-expected consumer inflation data released last Wednesday. However, the latest point prognoses from FOMC members showed that, on average, they expect only one 25 basis point rate cut this year, with four FOMC members not estimating a rate cut at all.

Trading recommendations

• Support levels: 2300,2276
• Resistance levels: 2325,2339,2300,2370

From the point of view of technical analysis, the trend on the XAU/USD is downward. Yesterday, the price fell again to 2300, where buyers showed a moderate reaction. The price is now trading at the level of the moving averages. The bias remains with the sellers as recent volume spikes indicate the presence of large selling. A break of the support at 2300 will open the way for the price to 2276. There are no optimal entry points for buying right now.

Alternative scenario:

if the price breaks above the resistance level of 2387, the uptrend will likely resume.