The Analytical Overview of the Main Currency Pairs on 2023.09.22

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0655
• Prev. Close: 1.0657
• % chg. over the last day: +0.02%

EUR/USD rose slightly on Thursday after German 10-year bond yields rose to a 12-year high, and ECB Governing Council representatives Nagel and Makhlouf said that the ECB may still have to raise interest rates this year. In addition, the euro was supported by stronger-than-expected French business and manufacturing confidence figures released on Thursday.

Trading recommendations

• Support levels: 1.0635,1.0519
• Resistance levels: 1.0670,1.0713,1.0730,1.0768,1.0842,1.0881,1.0943

The trend on the EUR/USD currency pair on the hourly time frame is bearish. The price tested the support level of 1.0635, followed by the reaction of buyers. But it looks like a temporary bounce, not a reversal. The MACD indicator is still negative. Sell deals can be looked for after the price pullback to the nearest resistance levels of 1.0698 or 1.0713. Buying can be looked at intraday time frames, but only with confirmation and short targets, as this would be a counter-trend trade.

Alternative scenario:

if the price breaks through the resistance level of 1.0736 and fixes above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2332
• Prev. Close: 1.27471.2294
• % chg. over the last day: -0.31%

The Bank of England unexpectedly left the rate unchanged at 5.25%, although the market was expecting an increase to 5.5%. However, the margin of votes was only 5 vs. 4. At the same time, the Bank of England plans to reduce the bond portfolio by £100 billion in the next 12 months to £658 billion. Although the situation with inflation in Britain is much worse, and wage growth accelerated to new highs, the Central Bank saw signs of weakening in the labor market due to rising unemployment. The bank’s accompanying statement stated the following: “If signs of more sustained inflationary pressures emerge, further monetary tightening will be required.” Overall, the Bank of England is following the same path as the rest of the world – a pause with a possible increase in the future. But for the British pound, a pause from the Bank of England is a negative.

Trading recommendations

• Support levels: 1.2274
• Resistance levels: 1.2380,1.2425,1.2461,1.2503,1.2547,1.2611,1.2659,1.2712.

According to technical analysis, the GBP/USD currency pair trend on the hourly time frame is bearish. The price has grabbed liquidity below the support level of 1.2274, and now a corrective upward movement may develop to distribute this liquidity. The MACD indicator is in the negative zone, there is weak buying pressure. Since the price is in the discount area, buy trades can be looked for intraday, but only with confirmation in the form of buyers’ reaction. Sell trades are best considered from the resistance level of 1.2380 but with confirmation in the form of sellers’ initiative.

Alternative scenario:

if the price breaks through the resistance level of 1.2425 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 148.25
• Prev. Close: 147.56
• % chg. over the last day: -0.47%

On Friday, the Bank of Japan left interest rates at negative levels as expected. The bank said it will maintain the current yield curve control (YCC) rates, allowing bond yields to fluctuate between plus 0.5% and minus 0.5%. However, the bank has also allowed more leeway in recent months, allowing yields to rise as high as 1%. The yen fell by 0.3% following the BOJ’s decision as it made no changes to the ultra-low policy that has undermined the Japanese currency over the past year.

Trading recommendations

• Support levels: 147.77,147.02,146.76,145.88,145.39,145.00
• Resistance levels: 148.12,148.46

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price grabbed liquidity below the 147.50 level, followed by buyers’ reaction. The MACD indicator is inactive, and intraday buyers’ activity is observed. Buy trades should be sought from the support level at 147.77 but with confirmation. Sell trades can be sought from the resistance level at 148.12 or after testing the liquidity above 148.46.

Alternative scenario:

if the price consolidates below the support level of 146.76, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 1930.47
• Prev. Close: 1919.73
• % chg. over the last day: -0.55%

Precious metals prices suffered moderate losses on Thursday amid pressure left over from Wednesday when the FOMC signaled another 25 bps rate hike this year and higher interest rates next year compared to June forecasts. Additionally, gold came under pressure from long position liquidations after the volume of long positions in gold ETFs fell to a 3-year low on Wednesday. At the moment, the dollar index received short-term support from the US Federal Reserve, and this has a negative impact on gold.

Trading recommendations

• Support levels: 1913.06,1901.13
• Resistance levels: 1933.94,1941.56,1947.81,1961.06

From the point of view of technical analysis, the trend on the XAU/USD currency pair is bullish. The price reached the support zone yesterday, which was followed by the buyers’ reaction. The MACD indicator is still in the negative zone, but there is buying pressure intraday. Under these market conditions, buy trades are best-sought intraday but with confirmation. Sell trades are best sought from resistance levels at 1933.94 or 1941.56, subject to sellers’ reaction.

Alternative scenario:

if the price breaks and consolidates below the support level of 1913.06, the uptrend will likely resume.