The Analytical Overview of the Main Currency Pairs on 2024.02.09

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0770
• Prev. Close: 1.0776
• % chg. over the last day: +0.06%

The euro rebounded from early losses and rose slightly on Thursday amid hawkish comments from the ECB. ECB Governing Council spokesman Wunsch and ECB, chief economist Lane, said they prefer to wait for more data before deciding on an interest rate cut. The probability of a rate cut from the US Fed at the April meeting is 74%, while the probability of a rate cut from the ECB in April has fallen to 57%. The preponderance of probabilities is in favour of strengthening the European currency.

Trading recommendations

• Support levels: 1.0756,1.0721,1.0724
• Resistance levels: 1.0785,1.0816,1.0860,1.0885,1.0931,1.0985,1.1010

The trend on the EUR/USD currency pair on the hourly time frame is a downtrend. Yesterday, the price tested the liquidity below 1.0756, where the buyers demonstrated their activity. But sellers are actively defending their levels, as a result of which the price is starting to flat between 1.0756 and 1.0785. A retest of 1.0756 is likely to lead to a breakdown of the level and a drop in price to weekly lows. There are no optimal entry points for buying right now.

Alternative scenario:

if the price breaks the resistance level of 1.0885 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2618
• Prev. Close: 1.2616
• % chg. over the last day: -0.02%

The British pound has a slight advantage over the euro and the dollar because the UK plans to cut interest rates in the summer, while the ECB and the US Fed may start the easing process in late spring 2023. Last week, the head of the Bank of England, Andrew Bailey, noted that the situation is moving in the right direction and that the current interest rate remains acceptable to suppress inflation. Traders will probably prefer to take a wait-and-see stance before releasing important macroeconomic data next week, starting with UK employment data and the latest US consumer inflation data on Tuesday.

Trading recommendations

• Support levels: 1.2612,1.2586,1.2561,1.2499
• Resistance levels: 1.2643,1.2674,1.2750,1.2827,1.2881,1.2937

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bearish. Yesterday, the price tested the liquidity below 1.2586, after that, the buyers took the initiative and created an additional support zone near the level of 1.2612, and this zone can keep the price from going down. The MACD indicator became inactive, and volatility decreased. Buying can be sought intraday from 1.2612 with a target of 1.2643. Selling can be looked for after the sellers’ reaction at 1.2643.

Alternative scenario:

if the price breaks the resistance level at 1.2750 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 148.11
• Prev. Close: 149.31
• % chg. over the last day: +0.81%

The yen fell to a 2-month low against the dollar on Thursday on dovish comments from BoJ Deputy Governor Uchida, who said that it is hard to imagine that the BoJ will quickly raise interest rates even after the end of negative interest rates. The most exciting thing is that the probability of a rate hike in April from the BoJ has increased from 77% to 80%, with the yen underactive sell-offs.

Trading recommendations

• Support levels: 148.25,147.67,148.81,146.45,145.87
• Resistance levels: 148.81,149.33,149.94

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. Now, the price is trading above the moving averages and seeks to test the liquidity above 149.94. However, a divergence has formed on the MACD indicator, which indicates a high probability of correction. Therefore, it is better to buy in continuation of the upward movement from 148.99, but with confirmation. There are no optimal entry points for selling now.

Alternative scenario:

If the price consolidates below the support level at 146.45, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2035
• Prev. Close: 2034
• % chg. over the last day: -0.05%

Precious metals traded mixed on Thursday. The strengthening dollar on Thursday was bearish for metals. In addition, hawkish comments from central banks on Thursday put pressure on precious metals, with FRB Richmond President Barkin saying that the Fed does not need to rush to cut interest rates and ECB Governing Council representative Wunsch saying that he prefers to wait for more data before deciding to cut interest rates. Gold remains under pressure from continued liquidation of long positions by funds after long positions in gold ETFs hit a 4-year low on Wednesday.

Trading recommendations

• Support levels: 2027,2023,1997,1987,1973
• Resistance levels: 2042,2062,2069,2084,2090

From the point of view of technical analysis, the trend on the XAU/USD is again downward. Yesterday, the price tested the liquidity below the support level 2023, where the buyers took the initiative. With a high probability, given the lack of significant news until the end of the week, gold will be flat. Therefore, trades are best looked for on intraday time frames. Buying can be considered intraday, but with near-term targets, as there is still a high probability of the price going below 2023.

Alternative scenario:

if the price breaks above the resistance level of 2057, the uptrend will likely resume.