The Analytical Overview of the Main Currency Pairs on 2023.10.24

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0591
• Prev. Close: 1.0668
• % chg. over the last day: +0.73%

EUR/USD gained 0.73% on Monday and rose to a weekly high. The Euro went up on Monday following news that the Eurozone Consumer Confidence Index was stronger than expected. For October, the Index fell to 17.9, which was stronger than expectations of 18.2. In addition, the weaker dollar on Monday caused short covering in EUR/USD. The US dollar initially found support yesterday due to a jump in 10-year bond yields to a new 16-year high, but then bond yields reversed and went down.

Trading recommendations

• Support levels: 1.0673,1.0623,1.0569,1.0548,1.0522,1.0495,1.0483
• Resistance levels: 1.0697,1.0736

The trend on the EUR/USD currency pair on the hourly time frame is upward. Yesterday, the price showed a sharp, impulsive upward movement. The MACD indicator became positive, and there are signs of overbought but without signs of reversal. Buying can be looked for after a small pullback from the support level of 1.0612, as the price has deviated strongly from the moving averages. Sell deals can be looked for from the resistance level of 1.0673, provided the price impulsively returns below the level.

Alternative scenario:

if the price breaks through the support level of 1.0569 and fixes below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2149
• Prev. Close: 1.27471.2247
• % chg. over the last day: +0.81%

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish. Like the eurodollar, the Pound Sterling also showed a sharp upward movement yesterday. The MACD indicator became positive, but the price deviated strongly from the average values. Under such market conditions, buying can be looked for from the moving average lines, but with confirmation on intraday time frames. Sell deals can be looked for after testing the 1.2285 resistance level, but also with confirmation in the form of sellers’ reaction.

Trading recommendations

• Support levels: 1.2225,1.2170,1.2142,1.2090,1.2009
• Resistance levels: 1.2285,1.2332,1.2384,1.2420,1.2504,1.2547

Alternative scenario: if the price breaks through the support level of 1.2142 and consolidates below it, the downtrend will likely resume.

Alternative scenario:

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 149.83
• Prev. Close: 149.70
• % chg. over the last day: -0.08%

The Japanese Nikkei Stock Index (JP225) decline to a 2-week low on Monday caused some demand for the yen. In addition, rising Japanese government bond yields are bullish for the yen, with the  10-year JGB yield rising to a new 10-year high of 0.882% on Monday. The Nikkei news service reports that the Bank of Japan is considering adjusting its yield curve control (YCC) program at its upcoming meetings. This is a positive factor for the Japanese yen.

Trading recommendations

• Support levels: 149.48,148.94,148.15,147.32,147.02,146.76,145.88,145.39
• Resistance levels: 149.99,150.16

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. Yesterday, the price made a liquidity test below the support level of 149.66 but failed to return impulsively, after which there was a further decline from the moving averages. With a high probability, there will be a test of liquidity below the level of 149.48. And then, traders should follow the price reaction. The price return above the level on impulse candlesticks will open the way to the upper boundary of the range – 149.99. If the price starts to “accelerate” the downward movement when testing the liquidity below 149.48, there are all the prerequisites for a sharp strengthening of the yen.

Alternative scenario:

if the price consolidates above the resistance level of 149.99, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 1979.66
• Prev. Close: 1973.17
• % chg. over the last day: -0.32%

Precious metals prices showed moderate losses on Monday. Weakening geopolitical risks in the Middle East dampened demand for precious metals after Hamas released two American hostages, and Israel was pressured to hold back from a ground invasion of the Gaza Strip to secure the release of other hostages. From a fundamental perspective, the tightening of financial conditions in the US certainly reduces the need for further monetary tightening. Therefore, with many representatives of the US Federal Reserve moving to a less hawkish tone, gold still has further room to grow.

Trading recommendations

• Support levels: 1962.98,1961.06,1939.19,1928.08,1907.71,1887.63,1867.89
• Resistance levels: 1987.52

From the point of view of technical analysis, the trend on the XAU/USD has changed to an upward trend. At the moment, the price is trading at the level of moving averages, and a narrowly volatile flat is forming. The MACD indicator has become inactive. Under such market conditions, it is better to look for buying on intraday time frames. The closest significant support level is 1962.98. The price is likely to test the liquidity below this level. Selling can be looked for from the resistance level 1987.52 but under the condition of a reverse reaction and change of the structure on the lower time frames

Alternative scenario:

if the price holds below the support level of 1867.92, the downtrend will likely resume.