The Analytical Overview of the Main Currency Pairs on 2024.03.01

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0835
• Prev. Close: 1.0804
• % chg. over the last day: -0.28%

The US dollar initially declined on Thursday after the core PCE deflator for January fell to 2.8% y/y from 2.9% y/y, the lowest in 2 years. But in the US session, the dollar recovered from losses and moved higher as hawkish comments from San Francisco Fed President Daly and Atlanta Fed President Bostic pushed back the probability of a Fed rate cut before the end of this year. The euro initially came under pressure yesterday after an unexpected drop in German retail sales in January and a decline in German inflation in February dovetailed with ECB policy. As expected, the US dollar temporarily seized the initiative from the euro.

Trading recommendations

• Support levels: 1.0789,1.0761,1.0704,1.0684
• Resistance levels: 1.0824,1.0858,1.0908

The trend on the EUR/USD currency pair on the hourly time frame is bullish. Yesterday, the price tested the resistance zone at 1.0858, where sellers took the initiative, which led to the price decline to 1.0796. The MACD indicator turned negative, consolidating the price below the moving average lines. The price will likely test liquidity below 1.0789, so traders should focus on selling intraday to this zone. Buying should be considered after the buyers’ initiative to the support level 1.0789.

Alternative scenario:

if the price breaks the support level of 1.0789 and consolidates below, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2651
• Prev. Close: 1.2623
• % chg. over the last day: -0.22%

The British pound was also under pressure from the USD growth yesterday, despite positive signals from the Bank of England monetary indicators. Mortgage approvals rose by 55.2 thousand in January, the highest since October 2022, beating market expectations of 52.0 thousand. In addition, consumer credit growth was stronger than expected, rising by £1.9 billion on a net basis, exceeding forecasts that expected a £1.6 billion increase. Investors are awaiting the Bank of England’s first rate cut in August.

Trading recommendations

• Support levels: 1.2625,1.2611,1.2560,1.2538,1.2499
• Resistance levels: 1.2681,1.2750,1.2827

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish. Yesterday, the price tested the priority change level but failed to consolidate below. Buyers took the initiative, with a divergence formed on the MACD indicator. It is essential that the level of 1.2611 holds, otherwise the price may plunge into a strong decline. Under such market conditions, you should look for intraday buying in the range of 1.2611-1.2625. Selling can be considered only if the price consolidates below 1.2611.

Alternative scenario:

if the price breaks through the support level 1.2611 and consolidates below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 150.62
• Prev. Close: 149.96
• % chg. over the last day: -0.44%

The yen rose to a two-week high against the dollar on Thursday amid hawkish comments from BoJ’s Takata, who said that the 2% price target is finally approaching, reinforcing expectations that the Bank of Japan (BoJ) will end its negative interest rate campaign as early as next month. The yen also found support on Thursday thanks to lower bond yields. Swaps estimate the odds of a 10 bps BoJ rate hike at 26% at the next meeting on March 19 and 82% at the April 26 meeting.

Trading recommendations

• Support levels: 150.22,149.82,149.27,148.25,147.67,148.81
• Resistance levels: 150.65,150.87,151.90

From the technical point of view, the medium-term trend on the currency pair USD/JPY is still bullish. Yesterday, the price declined sharply to the priority change level, which surprised market participants. But after a liquidity test, the price rebounded sharply on bullish volumes. The MACD indicator turned positive again, and intra-day bullish pressure persists. Under such market conditions, buy trades should be sought from the support level 150.22. In case of a deeper correction, the level of 149.82 is also suitable for buying. There are no optimal entry points for selling right 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: 2035
• Prev. Close: 2044
• % chg. over the last day: +0.44%

Despite the rise in the dollar index, although long gold positions in ETF funds fell to a 4-year low on average, gold rose to a 3-week high yesterday. This indicates that investors have started buying the yellow metal, expecting that central banks will cut rates soon. In general, the fundamental picture for gold remains bullish, but we should not forget that the price cannot grow without corrective pullbacks.

Trading recommendations

• Support levels: 2037,2030,2028,2022,2016,2013,2007
• Resistance levels: 2062,2069,2084,2090

From the point of view of technical analysis, the trend on the XAU/USD is bullish. The support zone at 2030 yesterday managed to keep the price from falling, after which the price rose sharply. Now, the price is trading above the moving averages, and the MACD indicator indicates the continuation of the uptrend. Buying can be considered from the moving averages or the support level 2037. There are no optimal entry points for selling right now.

Alternative scenario:

if the price breaks below the support at 2028, the downtrend is likely to resume.