The Analytical Overview of the Main Currency Pairs on 2023.09.13

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0743
• Prev. Close: 1.0753
• % chg. over the last day: +0.09%

Economic data from the Eurozone on Tuesday provided support for EUR/USD after expectations for German economic growth in the ZEW survey for September unexpectedly rose by 0.9 to minus 11.4, which was stronger than expectations for a decline to minus 15.0. The probability that the ECB will raise interest rates by 25 bps at Thursday’s meeting rose to 52% from 38% a day earlier. Thus, there is a possibility for some upward correction of EUR/USD.

Trading recommendations

• Support levels: 1.0730,1.0700,1.0659
• Resistance levels: 1.0781,1.0827,1.0842,1.0881,1.0943,1.1004

The trend on the EUR/USD currency pair on the hourly time frame is still a downtrend. The price is trading above the moving averages and forms a wide-volatile corridor. The MACD indicator has become positive, but the buying pressure is weak. Under such market conditions, buy trades can be looked for from the support level of 1.0730 but with confirmation on the lower time frames. Sell trades can be considered from the resistance level of 1.0781 but with confirmation in the form of a reverse initiative. The reverse initiative means the sellers’ reaction in the form of an engulfing candlestick or when a pin bar is formed.

Alternative scenario:

if the price breaks through the resistance level of 1.0893 and fixes above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2509
• Prev. Close: 1.27471.2483
• % chg. over the last day: -0.21%

Data released earlier on Tuesday showed that the UK unemployment rate rose to 4.3% in July from 4.2% in the previous month, while the number of people claiming benefits in August increased by only 900. However, despite these small signs of a weakening UK labor market, average wages rose to 7.8% y/y, suggesting that the Bank of England will still have to contend with inflationary pressures when it meets next week. Yesterday, Bank of England spokeswoman Catherine Mann warned that it was too early to stop raising rates, and the Central Bank is expected to raise rates by another 25 basis points.

Trading recommendations

• Support levels: 1.2465,1.2449,1.2307
• Resistance levels: 1.2549,1.2611,1.2659,1.2712,1.2733,1.2746,1.2764

According to technical analysis, the GBP/USD currency pair trend on the hourly time frame is bearish. The price is forming a broadly volatile flat, within which two accumulation zones have been formed, and the price is consolidating between them. The MACD indicator has become inactive. Buy delas can be considered on intraday time frames from the support level of 1.2465, provided buyers react to the level. Also, buying can be looked for on intraday time frames, provided the resistance level of 1.2502 is broken. Sell trades are best considered from the resistance level of 1.2502 or after the price breaks the support level of 1.25465.

Alternative scenario:

if the price breaks through the resistance level of 1.2642 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 146.53
• Prev. Close: 147.07
• % chg. over the last day: +0.37%

As expected, the Japanese yen is showing weakness again. The hawkish comments from the Bank of Japan had a temporary effect. The divergence in central banks’ stance is a bearish factor for the yen: the ECB and the Fed are currently raising interest rates, while the Bank of Japan keeps interest rates at record lows. And this rule will work for the yen until the Bank of Japan starts making the first real steps towards policy normalization.

Trading recommendations

• Support levels: 146.23,145.88,145.39,145.000
• Resistance levels: 147.37,147.81,148.80

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The MACD indicator became positive again, and the buyers’ pressure prevailed again. At the moment, the price has reached the resistance level of 147.37, where the sellers may react. A breakout of 147.37 will open the price to 147.85, where a lot of liquidity has gathered. Buying trades should be sought after the breakout of the 147.37 resistance level or from the 146.69 support level if the price still declines.

Alternative scenario:

if the price consolidates below the support level of 145.00, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 1922.58
• Prev. Close: 1912.93
• % chg. over the last day: -0.50%

Precious metals prices declined on Tuesday, with gold falling to a 2.5-week low. The strengthening dollar on Tuesday was a bearish factor for metals prices. Also, bearish for gold is the continued liquidation of gold stocks by funds after long gold holdings in ETF funds fell back to a 3-year low on Monday. Inflation data will be released in the US today, which will provide information on how far the US Fed will have to go to bring inflation back to target levels. With energy prices rising again, economists are predicting the biggest monthly jump in inflation in 14 months, which could give new confidence to the dollar for some time. A rising dollar would be a negative for gold.

Trading recommendations

• Support levels: 1903.87,1893.80
• Resistance levels: 1920.46,1930.75,1934.71,1941.79,1947.81,1961.06

From the point of view of technical analysis, the trend on the XAU/USD currency pair has changed to bearish. The price managed to consolidate below the priority change level. At the moment, the price is trading below the moving averages. The MACD indicator has become negative, and the sellers’ pressure persists. There is a high probability of testing liquidity below 1903.87. Sell trades are better to look for from the resistance level of 1920.46 but with confirmation in the form of a reverse initiative.

Alternative scenario:

if the price breaks through and consolidates above the resistance level of 1930.75, the uptrend will likely resume.