The Analytical Overview of the Main Currency Pairs on 2024.02.20

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0776
• Prev. Close: 1.0778
• % chg. over the last day: +0.01%

On Monday, the euro lost some ground against the US dollar, but as the US market was closed due to Presidents Day, the actual trading activity will come later in the week when the data starts to come in. The first major release will be on Wednesday – the US Federal Reserve’s latest monetary policy meeting minutes. With strong US economic data coming out after the January meeting and expectations of a rate cut pushed back to June, the euro could come under pressure.

Trading recommendations

• Support levels: 1.0765,1.0739,1.0704,1.0684
• Resistance levels: 1.0788,1.0796,1.0816,1.0860

The trend on the EUR/USD currency pair on the hourly time frame is a downtrend. Yesterday, the price was expected to be flat as it was a bank holiday in the United States. Therefore, the technical picture has stayed the same. Sellers react very weakly to resistance zones. The MACD indicator has become inactive. Under such market conditions, buying should be sought from the support level 1.0765 with a target of 1.0788. There are no optimal entry points for selling now, as the price is in the buying zone.

Alternative scenario:

if the price breaks the resistance level of 1.0796 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2597
• Prev. Close: 1.2593
• % chg. over the last day: -0.03%

The British Pound stabilized around $1.26. Even though the British economy has reached a technical recession, the Governor of the Central Bank of England, Andrew Bailey, expressed satisfaction with the latest inflation data in the country and noted the first signs of economic recovery. Observers of the British economy have almost no important events this week, so the dollar index will bring the central dynamics in GBP/USD pricing. In turn, the dynamics of the dollar index will depend on the minutes of the FOMC meeting on Wednesday and the labor market data on Thursday.

Trading recommendations

• Support levels: 1.2582,1.2560,1.2538,1.2499
• Resistance levels: 1.2635,1.2643,1.2683,1.2750,1.2827

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bearish. Yesterday, sellers reacted moderately and brought the price back below 1.2600. Now, the price has reached the buying zone, and the buyers are showing initiative on the lower time frames. Under such market conditions, you can look for intraday buying from the support level 1.2582 with a target of 1.2635. Selling can be looked for from 1.2635, subject to sellers’ reactions.

Alternative scenario:

if the price breaks the resistance level at 1.2683 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 150.23
• Prev. Close: 150.09
• % chg. over the last day: -0.09%

The yen has recently weakened as Japan lost its place as the world’s third-largest economy to Germany and entered a technical recession. The recession data has reinforced expectations that the Bank of Japan will maintain its ultra-loose monetary policy. Meanwhile, the sharp drop in the currency prompted Japan’s Finance Minister Shunichi Suzuki to warn last week that authorities would closely monitor the market without confirming whether they would intervene again.

Trading recommendations

• Support levels: 150.18,149.68,148.92,148.25,147.67,148.81
• Resistance levels: 150.43,150.91,151.90

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. Now, the price is testing the resistance level of 150.43. There is no seller’s reaction, but buyers are not very active either. Inside the day, we can look for sales if sellers are active. The most optimal level for buying is 150.18. Overall, the bias remains bullish, so buying is more preferable.

Alternative scenario:

If the price consolidates below the support level at 149.27, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2013
• Prev. Close: 2018
• % chg. over the last day: +0.24%

After rising for three consecutive sessions, gold dipped below $2,020 per ounce on Tuesday. Markets expect the total amount of rate easing this year to be less than 100 basis points, much less than the nearly 150 basis points of rate cuts at the beginning of the year. Also, economists have shifted bets on the Federal Reserve’s first interest rate cut from March to June. This revision in probabilities went in the dollar’s favor. But the medium-term picture remains for gold because as soon as banks cut interest rates, bond yields will start to fall, leading to the growth of precious metals.

Trading recommendations

• Support levels: 2007,1995,1989,1973
• Resistance levels: 2023,2029,2062,2069,2084,2090

From the point of view of technical analysis, the trend on the XAU/USD is again downward but close to a shift. The price has approached the priority change level. The MACD and EMA indicators are showing further price growth. The only selling zone that stands in the way of buyers is the area above 2023. Under these market conditions, buy trades should be sought intraday, subject to buyer reaction. Sell trades should be considered from 2023, but also subject to sellers’ reactions. The word reaction means initiative on the lower time frames.

Alternative scenario:

if the price breaks above the resistance level in 2029, the uptrend will likely resume.