The Analytical Overview of the Main Currency Pairs on 2023.08.24

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0843
• Prev. Close: 1.0862
• % chg. over the last day: +0.17%

The dollar index retreated from its highs on Wednesday after economic news showed that the S&P US manufacturing PMI for August fell more than expected, reinforcing speculation that the Fed will pause its rate hike campaign. EUR/USD also found support after the S&P Eurozone Manufacturing PMI for August rose more than expected.

Trading recommendations

• Support levels: 1.0835,1.0795
• Resistance levels: 1.0875,1.0892,1.0951,1.0983,1.1004,1.1046,1.1102

The trend on the EUR/USD currency pair on the hourly time frame is bearish. Yesterday, the price found support near the level of 1.0795. The MACD indicator became positive, and the price is trading at the level of moving averages. Sell trades can be considered from the resistance level of 1.0875 or 1.0892 but with confirmation in the form of sellers’ reaction. Buy trades can be considered from the support level of 1.0835 but with confirmation in the form of a change of structure on the lower timeframes.

Alternative scenario:

if the price breaks through the resistance level of 1.0951 and fixes above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2732
• Prev. Close: 1.27471.2722
• % chg. over the last day: -0.08%

The UK Manufacturing PMI declined from 45.3 to 42.5. In the service sector, the index fell below the 50 mark (51.5→48.7), separating growth from contraction. The data came out very weak. British government bond yields fell sharply after the publication: interest rate-sensitive two-year bonds lost 19 basis points. Benchmark 10-year bonds lost more than 16 basis points as traders cut back on expected rate hikes by the Bank of England in the coming months.

Trading recommendations

• Support levels: 1.2666,1.2621
• Resistance levels: 1.2726,1.2880,1.2913,1.2942,1.3011,1.3072

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price attempted to change the priority yesterday, but the buyers protected their positions. The support level at 1.2521 showed a bullish reaction for the third time; the next time the price approaches, the level will not hold. Now, the price is trading at the level of moving averages, and it is very important for the buyers to break above 1.2726. The MACD indicator has become inactive. Buy deals can be considered from the support level of 1.2666 but with additional confirmation on the lower timeframes. Sell trades are best considered from the resistance level of 1.2726 or 1.2755 but with confirmation in the form of sellers’ initiative.

Alternative scenario:

if the price breaks through the support level of 1.2621 and fixes below it, the downtrend will most likely be renewed.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 145.83
• Prev. Close: 144.82
• % chg. over the last day: -0.69%

The Japanese yen strengthened yesterday after the 10-year JGB yield rose to a 9.5-year high of 0.680%, reinforcing the Yen interest rate differential. At the same time, the yen’s strengthening accelerated against the backdrop of the falling dollar index, which declined yesterday due to weak economic data on business activity.

Trading recommendations

• Support levels: 145.00,144.41,143.54,143.26,142.64,140.98
• Resistance levels: 145.15,145.59,146.55,146.55,146.91

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price has formed a false breakdown zone below the level of 145.00. Now, this area will act as a support zone. A breakout and consolidation of the price above the 145.15 resistance level will open the road to 145.59. Sell trades can be considered from the resistance level of 145.15 and 145.56, but with confirmation in the form of a false breakout, as the level was also already tested.

Alternative scenario:

if the price fixes below the 144.41 support level, there is a high probability that the downtrend will be renewed.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 1897.53
• Prev. Close: 1816.72
• % chg. over the last day: +1.01%

Precious metals prices rose sharply on Wednesday, with gold rising to a 2-week high and silver to a 3-week high. The weakening dollar on Wednesday was a favorable factor for metals prices. Precious metals prices also rose on Wednesday after weak economic news from the US, and Eurozone drove down bond yields, fueling speculation the Fed and ECB may refrain from further monetary tightening.

Trading recommendations

• Support levels: 1914.42,1904.33,1893.80
• Resistance levels: 1922.71,1933.24,1938.46

From the point of view of technical analysis, the trend on the XAU/USD currency pair is bearish. The price broke through the priority change level and consolidated above. The MACD indicator is in the positive zone, with signs of overbought. It is better to look for buy deals after a pullback to the support level of 1914.42 but with confirmation in the form of a false breakdown. In case of a deeper correction, the price should wait at 1904.33. Sell trades are better to look for from the resistance level of 1922.71 but with confirmation in the form of a reverse initiative.

Alternative scenario:

if the price breaks through and consolidates below the support level of 1893.80, the downtrend is likely to resume.