The Analytical Overview of the Main Currency Pairs on 2024.09.20

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1111
• Prev. Close: 1.1161
• % chg. over the last day: +0.45 %

The euro is trading near $1.12, the strongest in three weeks, benefiting from the overall dollar weakness after the Federal Reserve cut interest rates by 50 bps. The Fed also signaled additional rate cuts of 50 bps this year and 100 bps next year. The euro also posted moderate gains on Thursday amid hawkish comments from ECB executive board spokeswoman Schnabel, who said strong services inflation is keeping core inflation at a high level. Swaps discount the odds of a 25bp ECB rate cut at the October 17 meeting by 27% and 100% for a 25bp rate cut at the December 12 meeting.

Trading recommendations

• Support levels: 1.1121, 1.1068, 1.1051, 1.1013, 1.0950, 1.0905, 1.0884
• Resistance levels: 1.1180, 1.1191, 1.1275

The EUR/USD currency pair’s hourly trend is bullish. Yesterday, the price tested the support level of 1.1121, where the buyers again took the initiative. Inside the day, the buyers’ pressure remains. Under such market conditions, it is best to look for buy trades from the moving average lines, but with confirmation. The profit target is 1.1180. If the price is fixed above the level, a sharp impulsive growth to 1.1275 is possible, but amid the absence of news triggers today, the price is likely to trade below 1.1180. There is no optimal entry point for selling now.

Alternative scenario:

if the price breaks the support level of 1.1002 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3200
• Prev. Close: 1.3284
• % chg. over the last day: +0.64 %

In line with expectations, the Bank of England left interest rates at 5% at its September 2024 meeting and said that a gradual approach to removing policy restraint remains appropriate. Traders now expect the Central Bank to cut rates by 42bp by the end of the year, down from 52bp before the decision. For the British currency, this could be reflected by further strengthening against the US dollar.

Trading recommendations

• Support levels: 1.3241, 1.3188, 1.3153, 1.3115, 1.3086, 1.3072, 1.3033
• Resistance levels: 1.3273, 1.3306, 1.3455

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bullish. Yesterday, the price reached the daily resistance zone at 1.3273–1.3306, where sharp sell-offs followed. However, buyers bought back the price from 1.3241 and now the price is again trading in the resistance zone and the sellers are not taking the initiative. For buy deals, it is better to wait for the price to consolidate above 1.3306. If the price impulsively drops below 1.3273 again, a sharp sell-off to 1.3241 or 1.3188 may take place.

Alternative scenario:

if the price breaks the support level of 1.3145 and consolidates below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 142.25
• Prev. Close: 142.62
• % chg. over the last day: +0.26 %

The Japanese yen rose to 142 per dollar on Friday after the Bank of Japan kept its policy rate unchanged at 0.25% in line with expectations in a unanimous vote. The Central Bank also maintained its projection that the economy is steadily moving toward a moderate recovery. The Central Bank raised interest rates in March and July amid persistent inflationary pressures and is expected to raise rates once more before the end of the year. Recent data showed that Japan’s core inflation rate accelerated to 2.8 % in August from 2.7% in July, supporting a hawkish view of BoJ policy.

Trading recommendations

• Support levels: 142.19, 141.13, 140.43, 137.26
• Resistance levels: 143.25, 142.79, 144.42, 147.17, 148.29, 150.88, 151.26

From a technical point of view, the medium-term trend of the USD/JPY currency pair has changed temporarily to an uptrend. Technically, there was a reversal change, but fundamentally we have a downward trend. Currently, the price is retesting the support zone at 142.19. If the buyers take the initiative here, we should expect growth up to 143.25. The price fixation below 142.19 may cause sharp sell-offs.

Alternative scenario:

if the price breaks and consolidates below the support at 140.43, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2558
• Prev. Close: 2587
• % chg. over the last day: +0.13 %

Precious metals have been supported since Wednesday, when the FOMC cut interest rates by 50 bps and projected another 50 bps cut before the end of this year. In addition, gold fund buying supported gold prices as long gold ETF positions rose to a 7-month-high on Wednesday. For precious metals, fundamental conditions remain in place for further growth.

Trading recommendations

• Support levels: 2584, 2574, 2561, 2541, 2528, 2522, 2513, 2503
• Resistance levels: 2600

From the point of view of technical analysis, the trend on the XAU/USD is bullish. The price is again aiming at the psychological mark of 2600. Buyers are stepping in to create new support zones to hold the trend. Buying at current prices is not recommended, as the price has deviated from the moving averages and may be correct. For selling, 2600 can be considered, provided sellers react again.

Alternative scenario:

if the price breakdown the support level of 2513, the downtrend will likely resume.