The Analytical Overview of the Main Currency Pairs on 2023.10.17

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0507
• Prev. Close: 1.0559
• % chg. over the last day: +0.49%

The US Dollar retreated on Monday as geopolitical risks in the Middle East eased somewhat and limited demand for the dollar as a safe haven. A number of diplomatic efforts are underway to contain the war between Israel and Hamas. The German wholesale price index for September fell to -4.1% y/y from -2.7% y/y in August, the largest decline in three years. This index is a leading indicator of consumer inflation. For the European currency, it is a negative factor, as the decline in inflation will strengthen the confidence of the ECB that the necessary level of restrictions are in place.

Trading recommendations

• Support levels: 1.0476,1.0412,1.0223
• Resistance levels: 1.0546,1.0571,1.0612,1.0634,1.0697,1.0713,1.0736

The trend on the EUR/USD currency pair on the hourly timeframe is upward. At the moment, the price is trading above the moving averages. The MACD indicator has returned to the positive zone, but the buying pressure is weak. Selling can be looked for from the resistance level of 1.0571, subject to a reversal on the lower timeframes. Buying can be looked for on intraday timeframes but with short targets.

Alternative scenario:

if the price breaks through the support level of 1.0475 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2136
• Prev. Close: 1.27471.2216
• % chg. over the last day: +0.66%

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price is trading above the moving averages again, and the MACD indicator has become positive. Under such market conditions, buying can be sought from the midlines but with confirmation intraday. Selling can be looked for after testing liquidity above 1.2225 with confirmation in the form of an impulsive move back above the level.

Trading recommendations

• Support levels: 1.2121,1.2104,1.2083,1.2009
• Resistance levels: 1.2225,1.2273,1.2332,1.2384,1.2420,1.2504,1.2547.

Alternative scenario: if the price breaks through the support level of 1.2104 and consolidates below it, the downtrend will likely resume.

Alternative scenario:

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 149.35
• Prev. Close: 149.50
• % chg. over the last day: +0.10%

The yen strengthened slightly at the market opening yesterday as it was supported by comments from Japan’s Monetary Authority Chief Kanda, which reinforced speculation that Japan is close to intervening in the currency markets to support the exchange rate from further declines. However, easing geopolitical tensions in the Middle East has reduced demand for the yen as a safe haven. A downward revision to Japan’s industrial production data for August also put pressure on the yen.

Trading recommendations

• Support levels: 149.21,148.94,148.15,147.32,147.02,146.76,145.88,145.39,145.00
• Resistance levels: 149.83,150.16

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish, but it is close to changing. Now, the price is forming a narrowly volatile flat before the priority change level. A test of liquidity above the 149.83 level is very likely to take place. And further, it is necessary to follow the reaction of the price. The holding above the level on impulse candlesticks will change the trend to an upward one, which will lead to further growth of quotations above 150.15. If the test is a false breakout and the price sharply returns under the 149.83 level, under such market conditions, it will be possible to look for sale deals, but with short targets.

Alternative scenario:

if the price consolidates above the resistance level of 149.83, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 1928.34
• Prev. Close: 1918.96
• % chg. over the last day: -0.50%

Precious metals prices closed moderately lower on Monday as diplomatic efforts to contain the conflict between Israel and Hamas eased geopolitical risks in the Middle East and reduced demand for gold. Also negative for precious metals was a rise in global bond yields on Monday. In addition, the hawkish comments of the US Treasury Secretary Yellen, who said yesterday that the increase in interest rates in the US may persist, had a negative impact on precious metals.

Trading recommendations

• Support levels: 1907.71,1887.63,1862.32,1844.16,1833.16,1820.89,1815.47
• Resistance levels: 1932.26,1939.19,1947.81,1961.06.

From the point of view of technical analysis, the trend on the XAU/USD has changed to an upward trend. At the moment, the price is trading above the moving averages. The MACD indicator is in the positive zone, and the buying pressure remains. Under such market conditions, it is better to look for buying on intraday timeframes, as the price is not likely to make deep pullbacks. The closest significant support level is 1907.71, but with confirmation in the form of a false breakdown. There are no optimal entry points for selling right now.

Alternative scenario:

if the price holds below the support level of 1844.35, the downtrend will likely resume.