The Analytical Overview of the Main Currency Pairs on 2024.02.15

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0708
• Prev. Close: 1.0727
• % chg. over the last day: +0.18%

The Euro recovered slightly from a 3-month low on Wednesday and rose on the back of better-than-expected economic news and hawkish comments from the ECB. Industrial production in the Eurozone unexpectedly rose at the fastest pace in 16 months, and ECB Vice President Guindos said it would take time for Eurozone inflation to return to the 2% target. The euro’s gains were limited by the fact that ECB Governing Council representative Makhlouf said he expects the eurozone economy to stagnate in the short term.

Trading recommendations

• Support levels: 1.0724,1.0704,1.0684
• Resistance levels: 1.0741,1.0755,1.0789,1.0816,1.0860

The trend on the EUR/USD currency pair on the hourly time frame is a downtrend. Now, the price is correcting and trading at the level of moving averages. Buyers are trying to hold the support level at 1.0724, and so far, they are succeeding. Therefore, we can look for short-term long deals to the nearest resistance levels inside the day. A move below 1.0724 may trigger a new wave of selling. Sell trades can also be considered from resistance levels at 1.0741 or 1.0755 but with the condition of sellers’ reaction.

Alternative scenario:

if the price breaks the resistance level of 1.0806 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2585
• Prev. Close: 1.2564
• % chg. over the last day: -0.16%

Lower-than-expected UK inflation increased hopes for a rate cut by the Bank of England. Inflation for January was unchanged at 4.0%, below market expectations of 4.2% and a 2-year low. Bank of England Governor Andrew Bailey expressed optimism about the UK inflation data, which matched the central bank’s expectations. The Bank of England has previously signaled a possible rate cut, and investors are now betting on this move after the latest inflation data. It also noted signs that the British economy is gaining momentum, although the possibility of a shallow recession remains uncertain.

Trading recommendations

• Support levels: 1.2538,1.2499
• Resistance levels: 1.2572,1.2610,1.2635,1.2643,1.2674,1.2750,1.2827

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The price has corrected to the moving average lines. Buyers are trying to break through the resistance level of 1.2572, but so far without success. Under these market conditions, the price is likely to flat between 1.2537 and 1.2572. A price move above 1.2572 on impulse could trigger a wave of growth up to 1.2610.

Alternative scenario:

if the price breaks the resistance level at 1.2683 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 150.74
• Prev. Close: 150.53
• % chg. over the last day: -0.14%

The yen strengthened on Wednesday after Japanese authorities expressed their displeasure with the yen’s fall to a near 3-month low against the dollar on Tuesday. Japan’s chief currency strategist, Kanda, and Finance Minister Suzuki warned that authorities are ready to take action in the foreign exchange market if excessive yen movements are seen. A decline in T-note yields and a drop in the dollar index on Wednesday also supported the yen. The latest economic data showed that Japan’s economy unexpectedly contracted by 0.4% year-on-year in the fourth quarter of 2023, falling short of market forecasts that expected growth of 1.4%. This was the first contraction amid high inflation and an uncertain global economic outlook in five years.

Trading recommendations

• Support levels: 150.28,149.21,148.99,148.25,147.67,148.81
• Resistance levels: 150.91,151.90

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. Despite the formation of divergence on several time frames, the price continues to grow steadily. The price corrected to the liquidity void zone below 150.28. The MACD indicator becomes negative, but the selling pressure is weak. The price is expected to impulsively return above 150.28, after which it will continue to rise to 150.91. But as long as there is no buyer’s reaction, it is worth being patient and out of position. There are no optimal entry points for selling now.

Alternative scenario:

If the price consolidates below the support level at 149.27, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 1993
• Prev. Close: 1992
• % chg. over the last day: -0.05%

Precious metals traded mixed on Wednesday, with gold falling to a 2-month low. Gold prices extended Tuesday’s losses amid the negative impact of a stronger-than-expected US CPI report for January, which dampened expectations of a Fed rate cut in the first half of the year. Gold is also under pressure from the continued liquidation of long positions by funds after long gold ETF positions fell to a 4-year low on Tuesday.

Trading recommendations

• Support levels: 1987,1973
• Resistance levels: 1997,2001,2015,2027,2042,2062,2069,2084,2090

From the point of view of technical analysis, the trend on the XAU/USD is again downward. Yesterday, the price tested the liquidity below 1987, followed by buyers’ reaction. At the same time, buyers formed a support zone near 1990. A corrective move up to 1997 is expected. Next, the price reaction to liquidity should be watched. A sharp return back above the level may cause a wave of sell-offs. An impulsive exit above 1997 could lead to a deeper correction.

Alternative scenario:

if the price breaks above the resistance level 2029, the uptrend will likely resume.