The Analytical Overview of the Main Currency Pairs on 2024.05.29

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0857
• Prev. Close: 1.0856
• % chg. over the last day: -0.01%

The EUR/USD pair retreated from the weekly maximum on Tuesday and ended the trading with a slight decline. A negative factor for the euro was the ECB report published on Tuesday, which showed a decline in April inflation expectations, a dovish factor for the ECB policy. ECB expectations for April 1-year CPI fell to 2.9% from 3.0% in March, which matched expectations and was the lowest in 2 years. In addition, the expected April 3-year CPI declined to 2.4% from 2.5% in March, which was slower than expected, with no change at 2.5%.

Trading recommendations

• Support levels: 1.0842,1.0820,1.0803,1.0781,1.0750,1.0713,1.0688,1.0652
• Resistance levels: 1.0865,1.0885,1.0903,1.0923

The trend on the EUR/USD currency pair on the hourly time frame is bullish. Yesterday, sellers showed a reaction from the 1.0885 level again. The MACD indicator became negative, and intraday selling pressure is now prevailing. But the price is approaching the demand zone. Under such market conditions, buy trades should be considered from the support level of 1.0842, subject to buyers’ reactions. For selling, we can consider the selling zone near the resistance at 1.0865.

Alternative scenario:

if the price breaks the support level at 1.0766 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2768
• Prev. Close: 1.2760
• % chg. over the last day: -0.06%

From the fundamental picture point of view, the situation on the British currency has not changed. The UK inflation rate fell to 2.3% in April from 3.2% in March 2024. According to global macro models and analysts’ expectations, the UK inflation rate will be 2% by the end of the current quarter. Therefore, the Bank of England will decide on the first rate cut not earlier than the September meeting. As for the elections, which are scheduled for June 4, economists believe that this event will only partially affect the pricing of the British currency.

Trading recommendations

• Support levels: 1.2734,1.2687,1,2668,1.2647,1.2608,1.2567,1.2548,1.2487
• Resistance levels: 1.2766,1.2796,1.2828

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 reached the 1.2796 resistance level, where sellers showed initiative. At the same time, the price has consolidated below the moving averages, and the MACD indicator shows the sellers’ pressure intraday. Under such market conditions, buy trades should be considered from the support level of 1.2734, subject to buyers’ reactions. For selling, we can consider the area around the resistance at 1.2766, but also with confirmation.

Alternative scenario:

if the price breaks the support level of 1.2643 and consolidates below, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 156.82
• Prev. Close: 157.13
• % chg. over the last day: +0.20%

The Bank of Japan may consider a monetary policy response if a significant yen depreciation threatens the goal of maintaining price stability, the Central Bank’s Governor, Seiji Adachi, said in a statement. He added that the likelihood of Japan achieving a sustainable inflation rate of 2% is rising but still needs to be completely certain. Adachi also said the Central Bank should be cautious about any further policy changes, urging policymakers to avoid raising rates prematurely to avoid hurting the economy.

Trading recommendations

• Support levels: 156.62,155.29,155.15,154.60,153.83,153.12,151.93,151.59
• Resistance levels: 157.49,157.98,158.20,160.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY has changed to an upward trend. The price broke through an important resistance zone and consolidated above the priority change level. However, due to some overbought, it is worth waiting for a small correction before buying. It is better to join the trend from the moving average lines. The first level for selling is 157.50, but with a high probability, the price will try to test the liquidity above 157.98.

Alternative scenario:

if the price breaks and consolidates below the support level of 155.82, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2352
• Prev. Close: 2361
• % chg. over the last day: +0.38%

In an interview Tuesday, Minneapolis Fed President Neel Kashkari said that the Fed should hold off on cutting rates until inflation improves significantly and may even raise rates if inflation does not decline further. However, money markets are no longer reacting to such statements, realizing that the US Fed won’t start cutting rates until the fall at the earliest. This week, investors are awaiting key data on the PCE Price Index, which is the US Fed’s preferred inflation gauge. Meanwhile, rising geopolitical risks in the Middle East continued to support the appeal of the safe-haven currency.

Trading recommendations

• Support levels: 2342,2328,2307,2276,2249,2229,2206
• Resistance levels: 2367,2395,2432,2450,2500

From the point of view of technical analysis, the trend on the XAU/USD is bearish. On Friday, the price reached an important area at 2328, where there was a buyers’ reaction. After that, buyers formed 2 more support zones — 2342 and 2352. The MACD indicator remains positive, but the buyers’ momentum is weakening. Under such market conditions, intraday buying from the support level of 2352 with a target of 2367 is possible. There are no optimal entry points for selling right now.

Alternative scenario:

if the price breaks above the resistance level of 2426, the uptrend will likely resume.