The Analytical Overview of the Main Currency Pairs on 2023.10.25

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0661
• Prev. Close: 1.0589
• % chg. over the last day: -0.67%

On Tuesday, economic news from the US supported the dollar after the US manufacturing PMI for October unexpectedly rose to 50.0, a 6-month-high, stronger than expectations of a decline to 49.5. As a result, EUR/USD declined by 0.67% on Tuesday. The euro declined amid weaker-than-expected news on manufacturing activity and services in the Eurozone for October. At the same time, the negative factor for the euro was the comments of ECB President Lagarde, who said that the Eurozone economy is facing stagnation in the next few quarters.

Trading recommendations

• Support levels: 1.0586,1.0569,1.0548,1.0522,1.0495,1.0483
• Resistance levels: 1.0643,1.0673,1.0736

The trend on the EUR/USD currency pair on the hourly time frame is upward. Yesterday, the price tested the liquidity above the resistance level of 1.0673, which was followed by a sharp reaction from sellers. Now, all grabbed liquidity has been distributed up to the support level of 1.0586. The MACD indicator became negative, but the momentum is behind the buyers. Buying can be looked for from the support level of 1.0586. Sell deals can be looked for from the resistance level of 1.0643, subject to sellers’ reactions.

Alternative scenario:

if the price breaks through the support level of 1.0569 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2235
• Prev. Close: 1.27471.2158
• % chg. over the last day: -0.63%

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish. Similar to the Eurodollar, the pound sterling yesterday corrected to the nearest support levels, but the pullback was deep enough, which reduces the probability of further trend continuation. The MACD indicator turned negative. Under such market conditions, buying can be looked for from the 1.2159 support level, but with confirmation on intraday time frames. Sell deals can be looked for after testing the resistance level at 1.2238, but also with confirmation in the form of sellers’ reactions.

Trading recommendations

• Support levels: 1.2159,1.2142,1.2090,1.2009
• Resistance levels: 1.2238,1.2285,1.2332,1.2384,1.2420,1.2504,1.2547

Alternative scenario: if the price breaks through the support level of 1.2142 and consolidates below it, the downtrend will likely resume.

Alternative scenario:

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 149.67
• Prev. Close: 149.90
• % chg. over the last day: +0.15%

On Tuesday, the Japanese yen moved to the downside on the back of rising T-bond yields, which rose because of better-than-expected news on US manufacturing activity. The yen was also pressured by a decline in Japanese government bond yields after the Bank of Japan announced a surprise bond-buying operation. The Bank of Japan purchased 300 billion yen ($2 billion) of Japanese government bonds with maturities from 5 to 10 years and 100 billion yen of securities with maturities from 10 to 25 years in an attempt to slow the growth of long-term bond yields.

Trading recommendations

• Support levels: 149.61,149.33,148.94,148.15,147.32,147.02,146.76,145.88,145.39
• Resistance levels: 149.99,150.16

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish, but it is close to change. Yesterday, the price made a liquidity test below the 149.48 support level, forming a false breakdown zone, which will now act as a demand zone. The MACD indicator turned positive, and there is weak buying pressure intraday. It is better to consider buy trades from the moving average lines but with confirmation on the lower time frames. Also, the support level of 149.61 is suitable for buying. For sell deals, it is necessary to wait for a liquidity test above the 150.00 level, followed by a reverse reaction.

Alternative scenario:

if the price consolidates above the resistance level of 149.99, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 1973.16
• Prev. Close: 1972.67
• % chg. over the last day: -0.02%

Tuesday’s US business activity news was hawkish for Fed policy and pushed T-note bond yields higher, which had a negative impact on precious metals prices. In addition, geopolitical risks in the Middle East eased somewhat and kept gold demand in check as Israel postponed a ground operation in Gaza to secure the release of more hostages. But fundamentally, gold still has prerequisites for further growth in the medium term.

Trading recommendations

• Support levels: 1965.14,1927.82,1907.71,1887.63,1867.89
• Resistance levels: 1987.52

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 at the level of moving averages, and a narrowly volatile flat is forming. Yesterday, the price tested liquidity below the previous day’s low, which was followed by the buyers’ reaction. The MACD indicator is still inactive. Under such market conditions, it is better to look for buy deals on intraday time frames from the support level of 1965.14. Selling can be looked for from the resistance level of 1987.52 but under the condition of a reverse reaction and a change of structure on the lower time frames.

Alternative scenario:

if the price holds below the support level of 1867.92, the downtrend will likely resume.