The Analytical Overview of the Main Currency Pairs on 2024.03.25

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0860
• Prev. Close: 1.0807
• % chg. over the last day: -0.49%

The euro fell to $1.08, hitting its lowest level since February 29, as dovish comments from typically hawkish European Central Bank policymakers boosted hopes that the bloc’s central bank may start cutting rates soon. Bundesbank President Joachim Nagel said on Friday that the ECB may consider cutting rates before the summer break as inflation continues to fall toward the bank’s 2% target. Nagel’s sentiment coincides with a growing chorus of policymakers favoring a possible rate cut in June. Swaps estimate the odds of a 25 bps ECB rate cut at 7% at the next meeting on April 11 and 94% at the June 6 meeting.

Trading recommendations

• Support levels: 1.0794
• Resistance levels: 1.0841,1.0864,1.0886,1.0923,1.0936,1.0953,1.1000

The trend on the EUR/USD currency pair on the hourly time frame is bearish. The price is trading below the moving averages. The MACD indicator is negative, but the momentum intraday is behind the buyers. If the buyers break the intraday resistance level of 1.0821 today, we will see a rise to 1.0841, where the sellers’ reaction should be evaluated. If the level of 1.0821 is not passed today and the price returns to the buying zone, with a high probability, the downward movement will continue to the support level of 1.0794.

Alternative scenario:

if the price breaks through the resistance level of 1.0923 and consolidates above, with a high probability the uptrend will be resumed.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2655
• Prev. Close: 1.2599
• % chg. over the last day: -0.44%

The British pound fell to $1.26, hitting its weakest level in a month. UK consumer spending stalled in February, and Bank of England Governor Andrew Bailey hinted at the possibility of interest rate cuts this year. According to the ONS report, UK retail sales were unchanged last month after a strong 3.6% rise in January, contradicting market expectations of a 0.3% decline. Meanwhile, Bank of England Governor Bailey noted the positive signs of falling inflation but emphasized the need for more certainty in managing price pressures.

Trading recommendations

• Support levels: 1.2583,1.2560
• Resistance levels: 1.2645,1.2672,1.2709,1.2765,1.2803

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 is trading below the moving averages. The MACD indicator is negative, but the momentum intraday is behind the buyers. The price is now correcting within the downtrend. Intraday, you can look for a purchase with a target of up to 1.2645. For buyers, the price mustn’t fall again to 1.2595. In this case, selling pressure may be restored, and the price will go back to test 1.2583 or 1.2560 again.

Alternative scenario:

if the price breaks through the resistance level at 1.2803 and consolidates above it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 151.58
• Prev. Close: 151.43
• % chg. over the last day: -0.09%

In Japan, the yen fell to its lowest level in three decades, even after the Bank of Japan raised interest rates from negative territory. The market seems disappointed as the BoJ did not give any clear signals about future rate hikes. Investors are concerned that this could have been a one-off move, especially as most other central banks are preparing to cut rates. However, economic data points to rising inflation, while wage growth is expected soon, pushing inflation up. Therefore, it is not excluded that a further fall in the yen will entail new warnings of currency interventions by Tokyo.

Trading recommendations

• Support levels: 150.84,150.34,149.91,148.91,148.58,148.01,147.06
• Resistance levels: 151.47,151.90

From a technical point of view, the medium-term trend of the currency pair USD/JPY is bullish. The yen is again aiming to test the multi-year high of 151.90. Currently, the price is correcting, with sellers building a selling zone above 151.47. The price is likely to move down from this zone to 150.83, where traders should watch the reaction of the buyers. It is worth considering the buying levels of 150.83 or 150.34, provided the initiative from the buying side.

Alternative scenario:

if the price breaks and consolidates below the support level of 148.91, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2181
• Prev. Close: 2165
• % chg. over the last day: -0.73%

Gold fell to $2,170 an ounce on Friday, extending Thursday’s losses as the dollar strengthened on bets that other major central banks may start cutting interest rates sooner than the Federal Reserve. On Thursday, the Swiss National Bank unexpectedly cut its main interest rate, citing a strengthening franc. The Bank of England also paused as two officials who had previously voted to favor a rate hike now backed the decision. Friday’s decline in global bond yields was a positive for precious metals.

Trading recommendations

• Support levels: 2160,2149,2157,2131,2110,2080,2057
• Resistance levels: 2177,2183,2192,2200,2250

From the point of view of technical analysis, the trend on the XAU/USD is bullish. But now the price is correcting, and intraday selling prevails. The MACD indicator is in the negative zone, and on the growth of momentum, the price is rising weakly. These are signs of buyers’ weakness. It is also worth paying attention to the 2 selling zones above. Under such market conditions, it is worth looking for sell trades with a target of 2160 or to the level of priority change of 2149. There are no optimal entry points for buying right now.

Alternative scenario:

if the price breaks below the support at 2149, the downtrend will likely resume.