The Analytical Overview of the Main Currency Pairs on 2023.08.31

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0876
• Prev. Close: 1.0922
• % chg. over the last day: +0.42%

Weaker-than-expected economic news from the US on Wednesday on August ADP employment change and second quarter GDP increased speculation that the Fed may hold off on rate hikes, which put pressure on the USD. In addition, better-than-expected August consumer prices in Spain and Germany are hawkish for ECB policy and are boosting the euro against the dollar. Eurozone inflation data will be released today. Any signs of resilience will be a reason for the ECB to raise the rate once again at the September meeting in 2 weeks.

Trading recommendations

• Support levels: 1.0912,1.0876,1.0832,1.0804
• Resistance levels: 1.0943,1.0983,1.1004

The trend on the EUR/USD currency pair on the hourly time frame is bearish. The price is trading above the moving averages. The MACD indicator is in the positive zone, and there are signs of overbought but without signs of divergence. Sell deals can be considered from the resistance level of 1.0943 but with confirmation in the form of a reverse false breakout and change of structure on the lower time frames. Buy trades can be considered from the support level of 1.0912 or 1.0876 but with confirmation in the form of buyers’ reaction to the level.

Alternative scenario:

if the price breaks through the support level of 1.0781 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2636
• Prev. Close: 1.27471.2720
• % chg. over the last day: +0.66%

The British Pound Sterling rose against the US Dollar after the US GDP and ADP employment change data failed to meet forecasts, indicating a slight slowdown in the US economy. But UK economic data was also disappointing. A decline in consumer credit indicates a slowdown in the economy, which could have a negative impact on the Pound if this trend continues. For now, the Bank of England’s (BoE) interest rate expectations remain unchanged: policymakers will stick to a hawkish course at the upcoming meetings.

Trading recommendations

• Support levels: 1.2690,1.2666,1.2617,1.2582,1.2549,1.2520,1.2491
• Resistance levels: 1.2764,1.2796,1.2913,1.2942,1.3011

According to the technical analysis, the trend on the GBP/USD currency pair on the hourly time frame has changed to a bullish trend. The price broke through the priority change level and consolidated above. The MACD indicator is in the positive zone, and there are signs of overbought but without signs of divergence, which implies at least one more upward wave. Sell trades are best considered from the resistance level of 1.2764 but with confirmation in the form of a false breakout and sellers’ initiative. Buying can be considered from the support level of 1.2690 or 1.2666 but with additional confirmation on the lower time frames.

Alternative scenario:

if the price breaks through the support level of 1.2562 and fixes below it, the downtrend will most likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 145.87
• Prev. Close: 146.21
• % chg. over the last day: +0.23%

“Dovish” comments from Bank of Japan (BoJ) Governor Tamura pressured the yen on Wednesday when he said that the BoJ needs “a little more time” to assess the current economic situation. In addition, an unexpected decline in Japan’s consumer confidence in August was a negative factor for the yen. The Consumer Confidence Index for August unexpectedly declined by 0.9 to 36.2, which was weaker than expectations of an increase to 37.4.

Trading recommendations

• Support levels: 145.71,145.34,145.00,143.54,143.26,142.64,140.98
• Resistance levels: 146.54,147.09

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish but is close to changing. The price has corrected to the priority change level but cannot be consolidated below. Buyers are defending the level every time and preventing the price from holding below. Inside the day, there is still a little bit of selling pressure. The MACD indicator has become negative, with no signs of reversal. Buy trades should be sought on intraday time frames after the false breakdown of 145.71. Sell trades can be considered from the resistance level of 146.54 but with confirmation in the form of a reverse initiative.

Alternative scenario:

if the price fixes below the 145.71 support level, with a high probability that the downtrend will resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 1937.93
• Prev. Close: 1943.36
• % chg. over the last day: +0.28%

Gold rose to a 3-week high. The dollar’s decline to a 2-week low on Wednesday was a favorable factor for metal prices. But economic news from the US in August ADP employment change and GDP for the second quarter signaled a slowdown in the US economy, which may negatively affect demand for industrial metals, especially silver.

Trading recommendations

• Support levels: 1924.37,1920.02,1914.27,1903.87,1893.80
• Resistance levels: 1947.00

From the point of view of technical analysis, the trend on the XAU/USD currency pair is bullish. The price is trading above the moving averages but has reached the resistance level. The MACD indicator is in the positive zone, but there are signs of divergence and overbought, and they are getting stronger. There is still buying pressure inside the day, but a technical correction is brewing. Buying is best sought after a small correction to the moving averages, as the price has deviated strongly. Sell trades are best sought after testing liquidity above 1947.00, but with confirmation in the form of a reversal initiative and structure change on intraday time frames.

Alternative scenario:

if the price breaks through and consolidates below the support level of 1914.21, the downtrend is likely to resume.