The Analytical Overview of the Main Currency Pairs on 2023.10.10

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0551
• Prev. Close: 1.0566
• % chg. over the last day: +0.14%

The dollar received support from safe-haven demand at the opening of trading on Monday after Israel declared war on Hamas. However, the dollar gave up most of its gains after stocks recovered from early losses and headed higher, reducing liquidity demand for the dollar. In addition, dovish comments from Fed Vice Chairman Jefferson and Dallas Fed President Logan pressured the dollar when they stated that the recent jump in long-term Treasury yields could mean less need for the Fed to raise interest rates again. Such statements have sharply reduced the likelihood of a Fed rate hike this year. In turn, ECB Vice President Guindos said yesterday that the ECB should remain vigilant on inflation, and interest rates are likely to remain at current levels for some time due to oil price developments, the depreciation of the euro, and developments in unit labor costs.

Trading recommendations

• Support levels: 1.0543,1.0476,1.0412,1.0223
• Resistance levels: 1.0581,1.0554,1.0568,1.0617,1.0673,1.0697,1.0713,1.0736.

The trend on the EUR/USD currency pair on the hourly time frame is bearish. Yesterday, the price tested the 1.0522 support level, which was followed by the reaction of buyers. Now, the price has reached the resistance level of 1.0581 and closed the price gap after the weekend. Selling can be looked for from the resistance level of 1.0581, subject to the opposite reaction on the lower time frames. Buying can be looked for from the support level of 1.0543 or 1.0476, but it is also subject to buyers’ reactions.

Alternative scenario:

if the price breaks through the resistance level of 1.0591 and fixes above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2200
• Prev. Close: 1.27471.2236
• % chg. over the last day: +0.29%

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is still bearish, but the price is very close to changing its priority. After testing the support level of 1.2166, the price rose sharply and approached the priority change level of 1.2260. Selling can be looked for from the resistance zone 1.2260-1.2270 but with confirmation in the form of a false breakout with elements of structure change on the lower time frames. Buying can be looked for from the support level of 1.2190, but it is subject to buyers’ reactions. Pay attention to the triple bottom at 1.2104, where a lot of liquidity has accumulated.

Trading recommendations

• Support levels: 1.2190,1.2104,1.2083,1.2009
• Resistance levels: 1.2260,1.2270,1.2369,1.2420,1.2504,1.2547

Alternative scenario: if the price breaks through the resistance level of 1.2260 and consolidates above it, the uptrend will likely resume.

Alternative scenario:

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 149.11
• Prev. Close: 148.43
• % chg. over the last day: -0.45%

The yen posted moderate gains on Monday as heightened geopolitical risks encouraged safe-haven buying after the surprise Hamas militant attack on Israel over the weekend. The yen was also supported by a rally in bond prices on Monday. There was little trading activity in the yen yesterday, as Japanese markets were closed on Monday due to the Healthy Sports Day holiday.

Trading recommendations

• Support levels: 148.25,147.32,147.02,146.76,145.88,145.39,145.00
• Resistance levels: 149.07,149.33,149.65,150.16

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. Now, the price is forming a broadly volatile flat with the boundaries of 148.25-149.54. Yesterday, the price tested the liquidity below 148.25, which was followed by the reaction of buyers with confirmation on the lower time frames. The MACD indicator is in the negative zone, but the momentum is upward. Sell trades can be looked for from the resistance level of 149.07 or 149.54, but they are subject to sellers’ reactions to these levels. Buying can be looked for on the lower time frames, with a target to the nearest resistance levels.

Alternative scenario:

if the price consolidates above the resistance level of 150.16, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 1850.89
• Prev. Close: 1863.21
• % chg. over the last day: +0.66%

Precious metals prices rose on Monday amid increased demand for “safe-haven” after Hamas militants attacked Israel over the weekend. In addition, precious metals were supported by dovish comments from FOMC representatives Jefferson and Logan, who said that the recent jump in long-term Treasury bond yields may mean less need for the Fed to raise interest rates again.

Trading recommendations

• Support levels: 1833.68,1820.89,1815.47,1804.83
• Resistance levels: 1868.10,1880.07,1885.75,1901.05,1910.40

From the point of view of technical analysis, the trend on the XAU/USD is bearish but close to change. Now, the price is correcting to the nearest resistance levels. The MACD indicator is in the positive zone, but there are signs of overbought and divergence. Under such market conditions, it is better to sell from the resistance level of 1869.10 or 1880.00 with confirmation in the form of sellers’ reaction. For buying, it is worth waiting for buyers’ reaction to the support level of 1833.68, which was formed as a result of the price gap on Monday.

Alternative scenario:

if the price breaks above the resistance level at 1880.00, the uptrend will likely resume.