The Analytical Overview of the Main Currency Pairs on 2024.06.26

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0730
• Prev. Close: 1.0714
• % chg. over the last day: -0.15%

FOMC representative Bowman’s hawkish comments yesterday boosted the USD when she stated that she sees several upside risks to the inflation outlook and “we are still not at a point where it is appropriate to cut the discount rate.” In addition, stronger-than-expected reports on US home prices and consumer confidence were hawkish for Fed policy and bullish for the dollar. The dollar’s strength on Tuesday put pressure on the euro. The euro is also under pressure after a poll showed that Marine Le Pen’s far-right National Rally party increased its lead to 35.4% ahead of the first round of France’s snap legislative elections on Sunday.

Trading recommendations

• Support levels: 1.0693,1.0666,1.0590
• Resistance levels: 1.0718,1.0742,1.0756,1.0773,1.0817

The trend on the EUR/USD currency pair on the hourly time frame is bearish. Yesterday, sellers took the initiative from the resistance level of 1.0742. The price quickly returned to the support at 1.0693, where the buyers came back into play. However, sellers formed a resistance zone at 1.0718, and now, this area keeps the price from rising. In this scenario, sell trades can be considered. Most likely, the price will fall back to 1.0693. If the price can consolidate below this level, we should expect a drop to 1.0666.

Alternative scenario:

if the price breaks the resistance level of 1.0816 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2677
• Prev. Close: 1.2685
• % chg. over the last day: +0.06%

UK Gross Domestic Product (GDP) in the first quarter of 2024 grew by 0.6% quarter-on-quarter. According to global macro models and analysts’ expectations, the UK GDP growth rate will be a modest 0.1% by the end of the current quarter. Over the longer term, the UK GDP growth rate will be 0.5% in 2025 and 0.4% in 2026. Since the Bank of England intends to cut rates starting in September this year, the British currency has almost no factors to strengthen.

Trading recommendations

• Support levels: 1.2664,1.2653,1.2623,1.2602,1.2566
• Resistance levels: 1.2693,1.2735,1.2806

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bearish. The price has reached an important resistance zone above 1.2693 and so far the sellers are stubbornly not giving up this level. However, the buyers have built several support zones to keep the price from going down. Most likely the price will be flat between these levels until Friday. If the price can consolidate above 1.2700, it will open the way to 1.2735.

Alternative scenario:

if the price breaks the resistance level at 1.2735 and consolidates above, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 159.53
• Prev. Close: 159.64
• % chg. over the last day: +0.07%

The Japanese yen slowly declined to 160 per dollar, risking breaking the key level that had earlier forced the Japanese authorities to intervene in the currency markets. Chief currency diplomat Masato Kanda said Japan was ready to take action against volatile yen movements at “any time,” emphasizing that currency movements should be stable and reflect fundamentals. These developments came amid the Bank of Japan’s refusal to scale back large-scale bond purchases during its policy decision last week, saying it would unveil a plan to wind down its bond-buying program at its next policy meeting in July.

Trading recommendations

• Support levels: 159.00,158.23,157.59,157.33,156.56
• Resistance levels: 160.20

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. Volumes still indicate the presence of a big buyer. The price seeks to test the liquidity level above 160.20, where buyers are likely to start closing some of the previously opened positions, which will lead to a correction. It is best to use moving lines or intraday support levels to join the trend.

Alternative scenario:

if the price breaks below the support level of 157.59, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2334
• Prev. Close: 2319
• % chg. over the last day: -0.64%

Gold slipped to $2,310 per ounce on Wednesday, extending its decline from the previous session, as investors digested more hawkish remarks from Federal Reserve officials on the outlook for lower interest rates. Fed spokeswoman Lisa Cook said Tuesday that a rate cut would be appropriate at some point, but the timing is uncertain, while Fed Chair Bowman said she doesn’t expect a rate cut this year. This came amid strong US business activity data. Investors are looking forward to Friday’s data on the core PCE index, the Fed’s preferred measure of inflation, as well as the third estimate of first-quarter GDP growth and consumer spending and income.

Trading recommendations

• Support levels: 2307,2300
• Resistance levels: 2339,2351,2370,2387

From the point of view of technical analysis, the trend on the XAU/USD is still bearish. On the senior time frames, gold forms a flat accumulation. There is sellers’ pressure inside the day, but the divergence on the MACD indicator and the recent volume spikes indicate the presence of buyers as well. Under such market conditions, it is worth considering buying from the 2307 support level, but only with confirmation. If the price goes below 2307, it will trigger a decline to 2300.

Alternative scenario:

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