The Analytical Overview of the Main Currency Pairs on 2023.09.26

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0647
• Prev. Close: 1.0592
• % chg. over the last day: -0.52%

On Monday, the strengthening of the dollar had a negative impact on the euro, while the hawkish comments of the ECB head, Christine Lagarde, did not help the European currency much. ECB President Lagarde hinted yesterday at a prolonged hold on high rates: “Our future decisions will ensure that the key ECB interest rates are set at sufficiently restrictive levels for as long as necessary .”Another ECB official, Kazaks, indicated that the ECB should beat inflation on the first try and hinted at a possible another rate hike this year.

Trading recommendations

• Support levels: 1.0576,1.0543
• Resistance levels: 1.0613,1.0624,1.0673,1.0697,1.0713,1.0736,1.0768

The trend on the EUR/USD currency pair on the hourly time frame is bearish. Yesterday, the price impulsively broke through the lower boundary of accumulation and consolidated below. At the moment, the price has reached the support level of the higher time frame, so traders should expect a technical rebound. The MACD indicator is in the negative zone. Selling pressure remains, but the divergence is seen on the higher time frames. Sell deals can be looked for after a pullback to the resistance levels of 1.0613-1.0624, provided there is a reaction. Buying can be looked for intraday if there is a reaction of buyers, but only with short targets.

Alternative scenario:

if the price breaks through the resistance level of 1.0673 and fixes above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2246
• Prev. Close: 1.27471.2210
• % chg. over the last day: -0.29%

The British pound continues to lose ground against both the dollar and the euro. The latest economic data came out much weaker than expected, and the country is again threatened with recession. At the same time, the Bank of England refused to raise rates further at the last meeting and hinted at the end of the tightening cycle. Thus, the British pound lost the support of the central bank. This week, the UK GDP data will be published, and if this data also disappoints, the British currency will have no factors for strengthening.

Trading recommendations

• Support levels: 1.2178
• Resistance levels: 1.2244,1.2368,1.2424,1.2461,1.2503,1.2547,1.2611

According to technical analysis, the GBP/USD currency pair trend on the hourly time frame is bearish. The price is trading below the moving averages. The MACD indicator is in the negative zone, and there is a divergence, but the selling pressure remains. There is a narrowing of liquidity. As a rule, this is a harbinger of a sharp, impulsive movement. Selling can be looked for only on intraday time frames, as the price is in front of the daily support level. Buy deals can be considered after breaking the descending trendline and price fixing above the resistance level of 1.2244.

Alternative scenario:

if the price breaks through the resistance level of 1.2424 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 148.21
• Prev. Close: 148.86
• % chg. over the last day: +0.44%

The Japanese yen fell to an 11-month low against the dollar on Monday. “Dovish” comments from Bank of Japan Governor Ueda on Monday dragged down the yen exchange rate when he said that the BOJ should continue to ease monetary policy as uncertainty over wage growth and inflation is high, and therefore, the target of achieving 2% inflation accompanied by wage growth has not yet been “achieved.” The Japanese currency is trading in close proximity to the 150 mark, a level that economists believe could trigger currency intervention by the Japanese authorities similar to last year’s.

Trading recommendations

• Support levels: 147.78,147.32,147.02,146.76,145.88,145.39,145.00
• Resistance levels: 148.87,149.92

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price is trading above the moving averages, and price pullbacks are very weak, which indicates the strength of buyers. The MACD indicator is positive, and momentum is ascending. Trades in the continuation of the uptrend should be sought from the moving averages but with confirmation. Sell trades can be sought from the resistance level of 148.87, but only after the sellers’ reaction. If the price consolidates above 148.87, the road to 149.92 will open for the price.

Alternative scenario:

if the price consolidates below the support level of 147.32, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 1925.55
• Prev. Close: 1915.47
• % chg. over the last day: -0.52%

Precious metals prices showed moderate losses on Monday. The rally of the dollar index to a 6-month high on Monday had a negative impact on gold. In addition, a bearish factor for precious metals is the rise in global government bond yields: the 10-year German Bond yield rose to a 12-year high on Monday, while the 10-year T-note yield rose to a 16-year high. When government bond yields rise, investors tend to move funds into them for higher interest.

Trading recommendations

• Support levels: 1913.06,1901.13
• Resistance levels: 1921.31,1928.93,1933.94,1941.56,1947.81,1961.06.

From the point of view of technical analysis, the trend on the XAU/USD currency pair is still bullish, but the price has approached the priority change level. The MACD indicator is in the negative zone, but the presence of divergence indicates the weakness of sellers. Now, it is important to see the reaction of buyers to the support level of 1913.06. If this reaction happens, traders can look for buy trades on intraday time frames. It is better to look for sell trades from the resistance level of 1921.31 if sellers react.

Alternative scenario:

if the price breaks and consolidates below the support level of 1913.06, the uptrend will likely resume.