The Analytical Overview of the Main Currency Pairs on 2024.07.15

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0866
• Prev. Close: 1.0905
• % chg. over the last day: +0.35%

In Europe, traders estimate France’s political situation and the ECB monetary forecasts. The second round of parliamentary elections in France resulted in a hung parliament, where the left-wing New Popular Front unexpectedly won the most votes but fell short of a majority, giving investors some relief for more radical policies and aggressive fiscal measures. Meanwhile, investors still expect the ECB to cut interest rates once or twice this year, although policymakers are proceeding cautiously amid uncertainty over consumer prices. According to preliminary data, the annual inflation rate in the Eurozone fell to 2.5% in June.

Trading recommendations

• Support levels: 1.0875,1.0859,1.0807,1.0753,1.0727,1.0718,1.0685,1.0666
• Resistance levels: 1.0899,1.0923,1.0953

Alternative scenario:

The EUR/USD currency pair’s trend on the hourly time frame is bullish. The price has tested the resistance zone of 1.0899, where the fixation of profits is visible. Volumes also indicate selling. Considering the MACD divergence, the price may be correct for the area of 1.0875. Intraday, it is worth looking for sell trades from the resistance zone above 1.0899, but with confirmation. The most optimal levels for buying are 1.0875 and 1.0859. Evaluate the price reaction.

Technical indicators of the currency pair:

Trading recommendations

The EUR/USD currency pair’s trend on the hourly time frame is bullish. The price has tested the resistance zone of 1.0899, where the fixation of profits is visible. Volumes also indicate selling. Considering the MACD divergence, the price may be correct for the area of 1.0875. Intraday, it is worth looking for sell trades from the resistance zone above 1.0899, but with confirmation. The most optimal levels for buying are 1.0875 and 1.0859. Evaluate the price reaction.

Alternative scenario:

if the price breaks the support level of 1.0806 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2913
• Prev. Close: 1.2988
• % chg. over the last day: +0.58%

The UK economic growth data came as a positive surprise. The United Kingdom’s gross domestic product (GDP) increased by 0.4% in May. In April, growth was marginal, but it seems to be accelerating again, coming out of a recession that has dragged on until the end of 2023. This surprise led to a fall in the probability of an interest rate cut in August. The pound has also become more attractive on the back of the new government, which has been formed with a huge majority in the election.

Trading recommendations

• Support levels: 1.2878,1.2824,1.2801,1.2761,1.2741,1.2701,1.2681,1.2663
• Resistance levels: 1.2981

From the technical analysis point of view, the trend on the GBP/USD currency pair is bullish. The price has reached the important resistance level of 1.2981. Profit-taking and bearish volumes are observed. The MACD indicator is positive, but there are the first signs of weakness in buying. Inside the day, it is worth looking for sell deals from the resistance level of 1.2981, but with confirmation. For buying, it is best to consider the resistance level of 1.2926.

Alternative scenario:

if the price breaks the support level of 1.2776 and consolidates below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 158.75
• Prev. Close: 157.90
• % chg. over the last day: -0.54%

Last week, the yen gained 2% against the dollar on lower-than-expected US inflation data, with Bank of Japan (BoJ) data indicating that the government could spend up to 3.57 trillion yen on Thursday to maintain its currency. Analysts warned that Monday’s holiday could trigger another round of yen buying by Japanese authorities to take advantage of liquidity shortages, similar to what they did in late April. As for monetary policy, investors are looking forward to the Bank of Japan’s meeting in late July, which is expected to announce plans to reduce bond purchases and possibly raise interest rates again.

Trading recommendations

• Support levels: 157.52,157.33,156.56
• Resistance levels: 158.34,160.20,161.81,162.00

From a technical point of view, the medium-term trend of the currency pair USD/JPY is bearish. The price reached the 157.52 support zone, where active price buying started. Most likely, it was the closing of previously opened sales by large participants. All conditions for further price decline remain, but considering the MACD divergence, there is a high probability of corrective movement. There are no optimal entry points for buying now. It is best to use EMA lines or resistance level 158.34 for sell deals, but only with confirmation.

Alternative scenario:

if the price breaks through and consolidates above the resistance level of 161.78, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2415
• Prev. Close: 2411
• % chg. over the last day: -0.17%

Gold halted near $2,410 an ounce on Monday, pressured by a rising dollar as investors assessed the impact of the assassination attempt on former US President Donald Trump on financial markets. Traders feared that further political violence could lead to instability and volatility in the market, although analysts believed the attack boosted Trump’s chances of winning the election. Meanwhile, gold posted its third consecutive weekly gain on Friday as lower US inflation boosted bets on a Federal Reserve interest rate cut.

Trading recommendations

• Support levels: 2395,2370,2351,2339,2319,2295,2276
• Resistance levels: 2415,2432

From the point of view of technical analysis, the trend on the XAU/USD is bullish. There is now a liquidity contraction (narrowing triangle), which could lead to a strong, impulsive move. Given that the recent volumes indicate the presence of a large buyer, the probability of an upside breakout is higher than a downside breakdown. Buying should be considered after a breakout of the 2415 resistance level. Selling is best considered if the price consolidates below 2395.

Alternative scenario:

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