The Analytical Overview of the Main Currency Pairs on 2023.10.13

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0616
• Prev. Close: 1.0527
• % chg. over the last day: -0.84%

The euro declined sharply on Thursday amid the strengthening dollar and dovish comments from the ECB. ECB Governing Council representatives Centeno and Wunsch said on Thursday that current interest rates are appropriate, and they favor the ECB pausing its interest rate hike campaign. Meanwhile, EUR/USD extended its losses after the ECB’s September 13-14 meeting minutes showed that the ECB will suspend interest rate hikes.

Trading recommendations

• Support levels: 1.0518,1.0476,1.0412,1.0223
• Resistance levels: 1.0571,1.0612,1.0634,1.0697,1.0713,1.0736

The trend on the EUR/USD currency pair on the hourly time frame is bullish. Now the price is correcting. The MACD indicator has become negative, and there is selling pressure inside the day. Selling can be looked for from the resistance level of 1.0571, subject to a reversal on the lower time frames. Buying can be sought from the support level of 1.0518 or 1.0482 but is subject to a false breakdown and a change of structure on intraday time frames.

Alternative scenario:

if the price breaks through the support level of 1.0475 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2312
• Prev. Close: 1.27471.2174
• % chg. over the last day: -1.13%

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price is correcting on the background of the dollar growth. At the moment, the price is trading below the moving averages, and the MACD indicator has become negative. Buying can be looked for after a liquidity test below the support level of 1.2162 or, in case of a deeper correction, from the 1.2104 support level, but subject to the reaction of buyers. Sell deals can be looked for from the resistance level of 1.2273.

Trading recommendations

• Support levels: 1.2162,1.2104,1.2083,1.2009
• Resistance levels: 1.2273,1.2332,1.2384,1.2420,1.2504,1.2547

Alternative scenario: if the price breaks through the support level of 1.2104 and consolidates below it, the downtrend will likely resume.

Alternative scenario:

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 149.10
• Prev. Close: 149.79
• % chg. over the last day: +0.46%

The yen fell to a one-week low against the dollar on Thursday after stronger-than-expected US consumer price and weekly jobless claims reports pushed T-note yields higher. In addition, weak economic news weighed down the yen after an unexpected decline in Japanese machine tool orders in August, and a rise in Japan’s goods and services price index in September dovetailed with BoJ policy. Japan’s Producer Price Index (displays the inflation rate between factories and plants and is considered a leading indicator of consumer inflation) for September declined to 2.0% y/y from 3.3% y/y in August, which was weaker than expectations of 2.4% y/y and was the lowest reading in 2 years.

Trading recommendations

• Support levels: 149.21,148.15,147.32,147.02,146.76,145.88,145.39,145.00
• Resistance levels: 149.53,149.83,150.16

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish, but it is close to changing. The price has now reached the resistance level of 149.83, but the sellers’ reaction is weak. At the moment, the price now seeks to test liquidity above the resistance level of 150.161. Sell trades can be sought after an impulsive price return below the level of 149.54. Buying can be looked for on the lower time frames from the support level of 149.21.

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: 1873.57
• Prev. Close: 1868.33
• % chg. over the last day: -0.28%

The recovery of the dollar put pressure on gold yesterday after the dollar index bounced off the low and went up. In addition, the US economic reports on US consumer prices for September and weekly jobless claims drove bond yields higher. Gold has an inverse correlation to US government bond yields. However, economists believe that gold is limited in falling as the situation in the Middle East increases geopolitical risk, which leads investors to buy safe-haven assets such as gold and the US dollar.

Trading recommendations

• Support levels: 1862.36,1852.12,1833.84,1820.89,1815.47,1804.83
• Resistance levels: 1880.07,1885.75,1901.05,1910.40

From the point of view of technical analysis, the trend on the XAU/USD is bearish but close to change. Yesterday, the price reached the priority change level but failed to consolidate above. The MACD indicator has become inactive, with signs of divergence persisting. Under such market conditions, it is better to sell from the resistance level of 1880.07 with confirmation in the form of sellers’ reactions on the lower time frames. To buy, it is worth waiting for buyers’ reaction at the support level of 1862.36 or 1852.12 if there is a stronger decline.

Alternative scenario:

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