The Analytical Overview of the Main Currency Pairs on 2023.10.06

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0501
• Prev. Close: 1.0547
• % chg. over the last day: +0.43%

The Euro rose moderately on Thursday and was supported by comments from ECB Vice President de Guindos, who said that it was “premature” to discuss a possible interest rate cut amid still strong inflation. But the euro’s gains were limited by weaker-than-expected German trade balance data for August and a record decline in the S&P construction PMI for September. Investors’ main focus today will be on the Nonfarm Payrolls report. Economists expect the US economy to have added 163,000 jobs last month, down slightly from 187,000 in August. The unemployment rate will fall to 3.7%, and wage growth will remain strong. A resilient labor market will underscore the Fed’s stance to “hold rates longer,” and this will directly put negative pressure on risk assets such as the euro and the British pound.

Trading recommendations

• Support levels: 1.0500,1.0475,1.0412,1.0223
• Resistance levels: 1.0554,1.0568,1.0617,1.0673,1.0697,1.0713,1.0736

The trend on the EUR/USD currency pair on the hourly time frame is bearish. The MACD indicator is in the positive zone, but the buyers’ pressure is weakening. At the moment, the price has reached the resistance level, but the reaction of buyers is weak, so there is a high probability of further growth within the correction. Selling can be looked for after testing the resistance level at 1.0568 if the reaction is reversed. Buy deals can be looked for from the support level of 1.0487 or 1.0475, but they are also subject to buyers’ reactions.

Alternative scenario:

if the price breaks through the resistance level of 1.0591 and fixes above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2130
• Prev. Close: 1.27471.2190
• % chg. over the last day: +0.49%

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The situation is very similar to the euro. At the moment, the price has reached the resistance level, but the reaction of buyers is weak. The MACD indicator is positive, but the buyers’ pressure is also weakening. Selling can be looked for after an impulse return below 1.2175 or after a liquidity test above 1.2220. Buy deals can be looked for from the support level of 1.2111 or 1.2084, but they are subject to buyers’ reactions.

Trading recommendations

• Support levels: 1.2111,1.2083,1.2009
• Resistance levels: 1.2189,1.2270,1.2369,1.2420,1.2504,1.2547

Alternative scenario: if the price breaks through the resistance level of 1.2220 and consolidates above it, the uptrend will likely resume.

Alternative scenario:

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 148.02
• Prev. Close: 148.50
• % chg. over the last day: -0.35%

There were no significant changes yesterday. According to economists, the Japanese yen will continue to be pressured by the dollar if today’s Nonfarm Payrolls report points to a strong US labor market. Combined with predictions that the US economy probably performed much better in Q3 than it did in Q2, the US Dollar could receive significant fundamental support. This will lead to a sharp rise in USD/JPY quotes.

Trading recommendations

• Support levels: 148.26,147.32,147.02,146.76,145.88,145.39,145.00
• Resistance levels: 148.48,148.81,149.13,149.33,149.65,150.16

From the technical point of view, the medium-term trend on the currency pair USD/JPY changed to a downtrend. Now, the price is forming a broadly volatile flat, with the price failing to consolidate above the moving averages. The MACD indicator is in the negative zone, but there is weak buying pressure inside the day. Sell trades can be looked for from the resistance level of 148.81 or 149.13, but they are subject to sellers’ reactions to these levels. Buy deals can be looked for after liquidity grabbing below one of the supports, at the moment, conditions for this are not formed yet.

Alternative scenario:

if the price consolidates above the resistance level of 150.16, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 1823.30
• Prev. Close: 1820.30
• % chg. over the last day: +0.16%

Precious metals prices extended losses on Thursday, with gold hitting a 7-month low. Hawkish comments from ECB Vice President de Guindos put pressure on gold when he said that given still high inflation, it is “premature” to discuss the possibility of lowering interest rates. In addition, lower inflation reduces the demand for gold as an inflation hedge. Fundamentally, there are no conditions for gold to strengthen now, but they may appear if today’s report on the US labor market shows signs of weakness.

Trading recommendations

• Support levels: 1820.89,1815.47,1804.83
• Resistance levels: 1833.60,1857.61,1868.32,1879.93,1885.75,1901.05,1910.40

From the point of view of technical analysis, the trend on the XAU/USD is bearish. Now, the price is forming an accumulation right at the support level. As a rule, this leads to a breakdown and continuation of the trend. But with important economic events today, the price may make a false break one of the boundaries. The MACD indicator has become inactive, and there is a narrowing of liquidity before the news. Under such market conditions, it is best to sell after a false breakout of the 1833.60 resistance level with confirmation of the change of structure on the lower timeframes. For buying, it is worth waiting for buyers’ reaction to the support level of 1815.47.

Alternative scenario:

if the price breaks above the resistance level at 1880.00, the uptrend will likely resume.