The Analytical Overview of the Main Currency Pairs on 2024.05.17

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0883
• Prev. Close: 1.0866
• % chg. over the last day: -0.15%

The euro retreated from the five-week high on Thursday and suffered minor losses amid dovish comments of the ECB Governing Council representatives Centeno and de Kos. ECB Governing Council representative de Cos said the “central scenario” is for the ECB to cut the interest rate at its next meeting on June 6. His counterpart Centeno said he believes the ECB will cut interest rates for “some time.” In addition, the dollar’s rise on Thursday caused the liquidation of long euro positions.

Trading recommendations

• Support levels: 1.0803,1.0781,1.0750,1.0713,1.0688,1.0652,1.0623,1.0590
• Resistance levels: 1.0885,1.0903,1.0923

The trend on the EUR/USD currency pair on the hourly time frame is bullish. Yesterday, sellers did react to the resistance zone at 1.0885–1.0903. The MACD indicator became negative and the price corrected to the moving average lines. Under such market conditions, we can look for buying here, but the price may drop to 1.0831. There are no optimal entry points for selling right now.

Alternative scenario:

if the price breaks the support level at 1.0759 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2680
• Prev. Close: 1.2668
• % chg. over the last day: -0.09%

The UK benchmark interest rate was last seen at 5.25%. According to global macro models and analysts’ expectations, the UK interest rate will be unchanged by the end of this quarter. In the longer term, econometric models suggest that the UK interest rate will be 4.5% by the end of this year and will fall to 3.75% in 2025 and 2.75% in 2026.

Trading recommendations

• Support levels: 1.2647,1.2608,1.2567,1.2548,1.2487,1.2465,1.2446,1.2423
• Resistance levels: 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 British pound has not reached the resistance zone at 1.2707, which keeps a high probability of further price growth. Currently, the price has been corrected to the moving average lines, and the MACD indicator has become inactive. Buying can be sought from the support level of 1.2647, but with confirmation, as there is a small probability of a decline to 1.2607. Selling can be looked for from the resistance level of 1.2707, provided sellers react to this level.

Alternative scenario:

if the price breaks the support level of 1.2508 and consolidates below, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 154.84
• Prev. Close: 155.36
• % chg. over the last day: +0.34%

The Japanese yen weakened to 156 per dollar, facing renewed pressure after the Bank of Japan kept its bond purchases unchanged, opting not to repeat the unexpected reduction in debt purchases earlier this week. Negative GDP data also impacted the yen — the economy contracted more than expected in Q1, which is dovish for BOJ policy. Japan’s Q1 GDP fell by 2.0% (q/q annualized), weaker than expectations of 1.2%. Japan’s March industrial production figure was revised upward to 4.4% MoM from the previously reported 3.8% MoM. The latest data complicates the position of the Bank of Japan, which needs to balance its support for the economy with efforts to defend the weak currency.

Trading recommendations

• Support levels: 155.15,154.60,153.83,153.12,151.93,151.59
• Resistance levels: 155.86,156.57,157.12,158.20,160.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. On Thursday, buyers turned on at the 153.84 supply zone, after which the price rose sharply to the supply zone above 155.86. But now we should expect a small coverage of positions, likely leading to a decline. For selling, it is best to consider the zone above 155.86, with confirmation on intraday time frames. For buying, there are no optimal entry points right now.

Alternative scenario:

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

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2386
• Prev. Close: 2376
• % chg. over the last day: +0.42%

Gold held near the $2,380 per ounce mark on Friday as investors continued to assess mixed economic data from the US and its impact on the Federal Reserve’s monetary policy. Recent data showed a decline in initial jobless claims, higher-than-expected import and export prices, and disappointing housing starts and building permits. At the same time, Fed President Williams said more data is needed before adjusting interest rates.

Trading recommendations

• Support levels: 2377,2343,2328,2307,2276,2249,2229,2206
• Resistance levels: 2395,2418

From the point of view of technical analysis, the trend on the XAU/USD is bullish. Yesterday, the price was corrected from the resistance zone above 2395. Currently, the price is trading at the moving average level, with a demand zone below 2377. The MACD indicator has become inactive, which increases the probability of a flat structure. Under such market conditions, buying should be considered from the demand zone below 2377. But if the price starts to form a flat accumulation here, it will most likely lead to a decline in price.

Alternative scenario:

if the price breaks and consolidates below the 2306 support level, the downtrend will likely resume.