The Analytical Overview of the Main Currency Pairs on 2024.07.10

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0824
• Prev. Close: 1.0813
• % chg. over the last day: -0.10%

Panetta of the ECB Governing Council said that the ECB should not be overly concerned about unsustainable service inflation and booming wage growth. In his view, key interest rate cuts will continue gradually accompanying the return of inflation to target if macroeconomic developments align with the ECB Governing Council’s expectations. Investors estimate the ECB will cut interest rates once or twice this year.

Trading recommendations

• Support levels: 1.0807,1.0753,1.0727,1.0718,1.0685,1.0666,1.0590
• Resistance levels: 1.0837,1.0862

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price tested the demand zone below 1.0807, where buyers showed a reaction. Now, the price target is the resistance area of 1.0837. The price is likely to trade in this range until the publication of tomorrow’s CPI data. Selling should be considered if the price consolidates below 1.0807.

Alternative scenario:

if the price breaks the support level of 1.0710 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2804
• Prev. Close: 1.2785
• % chg. over the last day: -0.15%

The British pound fell to $1.278 after Fed Chairman Powell took a cautious stance on rate cuts in Congress. Powell emphasized the need for clear evidence that inflation will reach the 2% target before cutting rates, cautioning against delaying or not loosening the policy restraint sufficiently. Investors in the UK are expecting a rate cut in August following the Bank of England’s decision to leave rates unchanged despite inflation at 2%. Investors’ attention now turns to upcoming economic data such as the US Consumer Price Index and UK GDP to get an idea of future rate changes.

Trading recommendations

• Support levels: 1.2789,1.2761,1.2741,1.2701,1.2681,1.2663,1.2653,1.2623
• Resistance levels: 1.2815,1.2845

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bullish. The price corrected to the support level of 1.2789, where the fight between buyers and sellers started. But the volumes indicate some predominance of bearish pressure. The price going below 1.2789 will open the way to 1.2761. For buying, the price needs to consolidate above the moving average lines.

Alternative scenario:

if the price breaks the support level of 1.2615 and consolidates below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 160.78
• Prev. Close: 161.27
• % chg. over the last day: +0.30%

The Nikkei Stock Index (JP225) rallied to a new all-time high on Tuesday, reducing the demand for the yen as a safe-haven asset. In addition, bond yield divergence continues to weigh on the yen as Japanese government bond yields are significantly lower than other G7 countries. Japan’s Central Bank is under pressure to more actively normalize monetary policy, as a weak yen raises the cost of imports, increasing inflation risks.

Trading recommendations

• Support levels: 160.72,160.26,159.00,158.23,157.59,157.33,156.56
• Resistance levels: 161.81,162.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is still bullish. The price on the impulse candle has consolidated above 161.13, with the volume confirming the bulls’ efforts. Intraday buying should be sought with a target of up to 161.81. There are no optimal entry points for selling now.

Alternative scenario:

if the price breaks below the support level of 160.26, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2359
• Prev. Close: 2364
• % chg. over the last day: +0.21%

On Wednesday, gold rose to $2,370 per ounce, extending gains from the previous session amid heightened speculation of an imminent rate cut by the Federal Reserve, while traders are now shifting their attention to the upcoming release of US CPI data. The markets currently estimate the probability that the Fed will cut interest rates in September at 73%.

Trading recommendations

• Support levels: 2360,2351,2339,2319,2295,2276
• Resistance levels: 2370,2395

From the point of view of technical analysis, the trend on the XAU/USD is bullish. Yesterday, the price declined sharply again and reached the priority change level, but buyers again defended their positions, after which the price bounced. The recent volumes are pointing to the sellers’ pressure. The resistance level of 2370 is a stumbling block for buyers, but if the price consolidates above the level, we may see a sharp, impulsive move to 2395. If the price consolidates below 2360, a change of priority is very likely.

Alternative scenario:

if the price breaks below the 2351 support level, the downtrend will likely resume.