The Analytical Overview of the Main Currency Pairs on 2024.02.13

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0778
• Prev. Close: 1.0771
• % chg. over the last day: -0.06%

The Euro fluctuated around $1.077 as investors lowered their expectations for a rate cut by the European Central Bank after several policymakers expressed caution about easing monetary policy. Money markets had been pricing in a less than 50% chance of the ECB’s first rate cut in April after officials, including chief economist Philip Lane and Belgian central bank governor Pierre Wunsch, emphasized the need for more evidence that inflation is returning to the 2% target before considering an interest rate cut. In addition, ECB hawk Robert Holtzmann said there is a possibility that there will be no rate cuts at all this year or only at the end of the year.

Trading recommendations

• Support levels: 1.0761,1.0721,1.0724
• Resistance levels: 1.0789,1.0816,1.0860,1.0885,1.0931,1.0985,1.1010

The trend on the EUR/USD currency pair on the hourly time frame is a downtrend. Yesterday, the price created a false breakout zone above 1.0789, after which it declined to the channel’s lower boundary. Now, the price is trading below the moving averages, with sellers prevailing intraday. With a high probability that the price will continue to decline below 1.0761 under such market conditions. In case of a strong sell-off, the price may fall to 1.0721. There are no optimal entry points for buying 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: 1.2621
• Prev. Close: 1.2628
• % chg. over the last day: +0.06%

Bank of England Deputy Governor Sarah Breeden said that the focus is shifting towards considering how long interest rates will remain at current levels rather than further increases, signaling that the central bank is in no hurry to cut rates. At the same time, chief economist Huw Pill suggested that the first rate cut is “not imminent”, emphasizing that monetary easing is a matter of timing rather than inevitability. The latest economic data from RICS and Halifax point to the continued resilience of the UK housing market. All these factors should support the Pound in the short term. But US inflation data today could create a sharp imbalance in probabilities.

Trading recommendations

• Support levels: 1.2614,1.2571,1.2561,1.2499
• 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 hour time frame is bearish. The price is trading in a narrow corridor, forming a flat accumulation. With a high probability that there will be no significant changes until the publication of news on inflation in the United States. Inside the day, selling prevails, so with a high probability the price will continue to decline, but short-term upward spikes to grab more liquidity are not excluded. There are no optimal entry points for buying.

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: 149.21
• Prev. Close: 149.32
• % chg. over the last day: +0.07%

The Japanese yen fell to 149 per dollar, hitting the lowest level in the last two months, as the latest central bank commentary refuted bets on an aggressive change in Japan’s monetary policy. Central bank divergence continues to weigh on the yen as the Fed, Bank of England, and ECB have already raised interest rates while the Bank of Japan maintains negative interest rates. In the short term, the yen has no factors to strengthen.

Trading recommendations

• Support levels: 149.21,148.99,148.25,147.67,148.81,146.45,145.87
• Resistance levels: 149.56,149.94

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. Yesterday, the price tested the liquidity below 148.99, where the buyers took the initiative. Buying for the continuation of the upward movement is best to look for from 148.21 but with confirmation. The buyers’ target is to test liquidity above 149.94. 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: 2025
• Prev. Close: 2020
• % chg. over the last day: -0.25%

The strengthening of the dollar on Monday depressed metals prices. Gold fell to a 2-week low yesterday. Investors are cautiously awaiting key US inflation data that could affect the outlook for interest rates. If progress with inflation continues, it will put pressure on the dollar index and favorably impact stock indices and the precious metals market (gold and silver). If progress in the fight against inflation stalls or develops less favorably than expected, the yields on US Treasury bonds are likely to jump, putting pressure on gold.

Trading recommendations

• Support levels: 2015,1997,1987,1973
• Resistance levels: 2027,2042,2062,2069,2084,2090

From the point of view of technical analysis, the trend on the XAU/USD is again downward. Yesterday, the price reached the targets and tested the liquidity below 2015, followed by the buyers’ reaction. Below 2015, a false breakdown zone was formed with buyers creating one protective barrier. Buying can be considered intraday with a target of 2027. On the release of CPI news, be prepared to see provocative moves. Typically, after the news, the price moves in the opposite direction of the false breakout or breakdown.

Alternative scenario:

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