The Analytical Overview of the Main Currency Pairs on 2024.04.01

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0788
• Prev. Close: 1.0792
• % chg. over the last day: +0.04%

On Friday, the euro traded below $1.08, extending its first-quarter losses to around 2.3%, amid speculation that the ECB may cut interest rates soon. Many traders expect lower borrowing costs, with June considered the most likely time frame. ECB officials are confident that inflation trends will return to the 2% target by mid-2025, especially as wage growth slows, strengthening the case for lower interest rates. Meanwhile, French inflation fell more than expected to 2.3% in March, while Spain’s inflation rose to 3.2%, and Italy’s inflation rose to 1.3% versus forecasts of 1.4%.

Trading recommendations

• Support levels: 1.0783,1.0771,1.0723
• Resistance levels: 1.0817,1.0843,1.0864,1.0886,1.0923,1.0936,1.0953,1.1000

The trend on the EUR/USD currency pair on the hourly time frame is bearish. On Friday, the price reached the support level of 1.0762, where buyers took the initiative. Note that this is the second reaction of buyers in the zone 1.0770-1.0775. The MACD indicator signals a divergence, and the sellers’ pressure intraday disappeared inside the day. A technical correction is looming. Under such market conditions, buying can be considered from the support level of 1.0783, with targets up to 1.0817. It is not advisable to open sell trades in the demand area.

Alternative scenario:

if the price breaks through the resistance level of 1.0837 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: 1.2622
• Prev. Close: 1.2617
• % chg. over the last day: -0.04%

The Bank of England’s Monetary Policy Committee took a dovish stance at its latest meeting, sparking a discussion that the UK central bank may postpone the first interest rate cut from August to June. Recent comments from Bank of England (Boe) Governor Andrew Bailey suggest that the Bank of England sees that the economy is “moving in the right direction” and that it is “comfortable” with market forecasts for a rate cut. The market’s expectation of the first UK rate cut has now been pushed back to the Bank of England’s June 20 meeting, in line with Fed and ECB rate cut forecasts. Markets are also fully pricing for three quarter-point rate cuts this year.

Trading recommendations

• Support levels: 1.2610,1.2574,1.2560
• Resistance levels: 1.2648,1.2672,1.2709,1.2765,1.2803

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bearish. On Friday, the price tested the support level of 1.2610, where the buyers took the initiative. Now, the price is forming a narrow consolidation at the level of moving averages, but there is buying pressure intraday. The buyers need to keep the price above the 1.2610 level. Therefore, we can consider buying trades with a target of 1.2672. A price move below 1.2610 will open the way to 1.2574. In such a scenario, we can confidently look for sell trades intraday.

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: 151.38
• Prev. Close: 151.34
• % chg. over the last day: -0.03%

The Japanese yen is holding near 151 per dollar, recovering slightly after falling to 34-year lows last week as Japanese authorities signaled their willingness to intervene in the currency markets. Officials from the Finance Ministry, the Bank of Japan, and Japan’s Financial Services Agency met Wednesday to discuss weakening the yen. Finance Minister Shun’ichi Suzuki warned that strong steps would be taken against excessive fluctuations in the exchange rate. Chief currency diplomat Masato Kanda also said he would not rule out any steps in response to disorderly currency movements. Economists believe that the 152-152.50 is where officials have agreed to conduct currency intervention in case of further yen weakening.

Trading recommendations

• Support levels: 150.83,150.25,149.91,148.91,148.58,148.01,147.06
• Resistance levels: 151.53,151.90

From a technical point of view, the medium-term trend of the currency pair USD/JPY is bullish. The situation has not changed compared to Friday. The price has been forming a narrow flat for the third trading session. Technical indicators also indicate low activity. This indicates that yen traders are in no hurry to open new positions. With a high probability the price will continue the corrective movement within the uptrend. Intraday sales from 151.53 with a target of 150.84 can be considered. For sellers, it is desirable not to let the price consolidate above 151.50. Otherwise, the upward rally will continue. There are no optimal entry points for buying now.

Alternative scenario:

if the price breaks and consolidates below the support level of 150.25, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2233
• Prev. Close: 2233
• % chg. over the last day: 0%

Gold was not traded on Friday. The price of the metal rose more than 9% during March. On Monday, gold rose and continued its rally, hitting an all-time high. The rise in the metal price is because the main central banks will move to lower interest rates this year, and increased geopolitical tensions contribute to the demand for bullion. Fundamentally, there are no prerequisites for stopping the rally at the moment.

Trading recommendations

• Support levels: 2250,2233,2206,2188,2149,2157,2131,2110
• Resistance levels: 2300

From the point of view of technical analysis, the trend on the XAU/USD is bullish. The sellers failed to hold the selling zone near the round level 2250. Covered selling leads to further price growth. Since we do not have above historical levels, we should focus on psychological and round levels. The nearest such level is 2300. Technically, the price is now highly overbought and has deviated from the moving averages, and the MACD indicator is signaling divergence on many timeframes. It is worth waiting for a technical correction for buy deals, at least to the first moving average line. The levels of 2250 and 2233 are also suitable for opening buy trades. There are no prerequisites for selling now, as the big sellers are not showing any signs of activity.

Alternative scenario:

if the price breaks below the support at 2176, the downtrend will likely resume.