The Analytical Overview of the Main Currency Pairs on 2024.05.07

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0760
• Prev. Close: 1.0766
• % chg. over the last day: +0.06%

The euro posted modest gains on Monday, just below the 3-week high reached last Friday. Some positive economic news supported the euro after the May Eurozone Sentix Investor Confidence Index rose more than expected to a 2-year high, and the Eurozone PMI for April was revised upward to an 11-month high. Limiting EUR/USD growth was a dovish comment from ECB Chief Economist Lane and ECB Governing Council representative Simkus, who said they expect the ECB to start cutting interest rates in June.

Trading recommendations

• Support levels: 1.0739,1.0713,1.0688,1.0652,1.0623,1.0590
• Resistance levels: 1.0795,1.0843,1.0865

The trend of the EUR/USD currency pair in the hourly time frame has changed upward. Compared to yesterday, the situation has not changed technically. On Friday, after the Non-farm payrolls report, the price was consolidated above the priority level change. The price rose to the resistance level of 1.0795, where positions started to cover, as a result by the end of the trading day the price declined to the moving average levels. This can be seen from the price reaction to the volume spike. Under such market conditions, buying should be sought from the support zone below 1.0739. There are no optimal entry points for selling now.

Alternative scenario:

if the price breaks the support level at 1.0673 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2536
• Prev. Close: 1.2561
• % chg. over the last day: +0.20%

According to the predictions released by the Organization for Economic Cooperation and Development this month, the UK will be the weakest economy in the Group of Seven next year. With this in mind, it’s hard to see why the GBP/USD exchange rate remains as high. This is partly due to a general revival in risk appetite. However, it has more to do with the fact that markets are now far from convinced that rates in the UK will fall much faster than in the US. Therefore, the sterling uptrend is likely to continue until the meeting.

Trading recommendations

• Support levels: 1.2531,1.2513,1.2465,1.2440,1.2423,1.2423
• Resistance levels: 1.2561,1.2611,1.2634,1.2674,1.2707

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The picture has not changed significantly compared to yesterday. On Friday, the price reached the resistance level of 1.2561, where the sellers actively joined the game. It is difficult to say whether these sales were the closing of previously opened purchases or a new liquidity injection. We are watching the price reaction to the support zones below 1.2531 and 1.2513. If the buyers show initiative here, we can consider buying deals. Sell deals can be considered from the area above 1.2572, but only with confirmation.

Alternative scenario:

if the price breaks the support level of 1.2331 and consolidates below, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 152.86
• Prev. Close: 153.87
• % chg. over the last day: +0.66%

The Japanese yen fell to 154.50 per dollar, rebounding from last week’s gains, even after chief currency diplomat Masato Kanda said the government is ready to tackle disorderly, speculative currency movements. However, Kanda declined to confirm whether Japanese authorities were behind last week’s alleged intervention when the yen bounced more than 5% from its low. Meanwhile, analysts believe the move only bought time for the Japanese authorities as market fundamentals remain bearish for the yen. The US Treasury Secretary Janet Yellen also said over the weekend that intervention should be rare and consultations should take place, indicating a need for coordination between Japan and the US on monetary policy.

Trading recommendations

• Support levels: 151.93,151.59
• Resistance levels: 154.87,156.29,156.57,157.12,158.20,160.00

From a technical point of view, the medium-term trend of the currency pair USD/JPY is bearish. The Japanese yen is losing positions against the dollar and other currencies. There is buying pressure intraday despite the overall bearish bias that has emerged through interventions. Under these market conditions, we can look for selling from the area above 154.87, but this is subject to sellers’ reactions. There are no optimal entry points for buying right now.

Alternative scenario:

if the price breaks through and consolidates above the resistance level of 158.00, the uptrend is likely to resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2304
• Prev. Close: 2324
• % chg. over the last day: +0.86%

Precious metals closed moderately higher on Monday. In addition, precious metals rose thanks to support from weaker-than-expected US ISM payrolls and services reports last Friday, which bolstered optimism that the Fed will cut interest rates this year. Bearish factors for precious metals also include a rally in stock indices, limiting demand for precious metals.

Trading recommendations

• Support levels: 2307,2276,2249,2229,2206
• Resistance levels: 2327,2337,2350,2367,2400

From the technical analysis point of view, the trend on the XAU/USD is bearish. Yesterday, gold strengthened to 2327, while below 2307, a demand zone was formed. Hypothetically, it can become the basis for further growth. Intraday bias is now for buyers, but the price trades in the supply zone. Selling should be considered from 2327 but with a short stop-loss. The level of 2337 is also suitable for selling. For buying, it is better to wait for a decline to 2307.

Alternative scenario:

If the price breaks and consolidates above the resistance level of 2350, the uptrend will likely resume.