The Analytical Overview of the Main Currency Pairs on 2024.03.26

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0807
• Prev. Close: 1.0836
• % chg. over the last day: +0.27%

Weaker-than-expected US economic news on Monday pressured the US dollar after an unexpected decline in February’s new home sales. The weaker dollar on Monday caused some short covering in EUR/USD. However, the euro’s gains were limited by dovish comments from ECB Governing Council spokesman Panetta, who said Eurozone inflation is falling fast, allowing for the possibility of interest rate cuts sooner. Swaps estimate the odds of a 25 bps ECB rate cut at 6% at the next meeting on April 11 and 87% at the June 6 meeting.

Trading recommendations

• Support levels: 1.0827,1.0794
• Resistance levels: 1.0851,1.0864,1.0886,1.0923,1.0936,1.0953,1.1000.

Alternative scenario:

The EUR/USD currency pair’s hourly trend is bearish. Now, the price is corrected, and the MACD indicator is in the positive zone. But there are 2 sellers’ zones ahead, which will be challenging to overcome without news triggers. Under such market conditions, sell trades should be considered from the level of 1.0851 or 1.0864 with confirmation in the form of sellers’ reactions. For buying, the support level of 1.0827 can be considered.

Technical indicators of the currency pair:

Trading recommendations

The EUR/USD currency pair’s hourly trend is bearish. Now, the price is corrected, and the MACD indicator is in the positive zone. But there are 2 sellers’ zones ahead, which will be challenging to overcome without news triggers. Under such market conditions, sell trades should be considered from the level of 1.0851 or 1.0864 with confirmation in the form of sellers’ reactions. For buying, the support level of 1.0827 can be considered.

Alternative scenario:

if the price breaks through the resistance level of 1.0923 and consolidates above, with a high probability the uptrend will be resumed.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2593
• Prev. Close: 1.2635
• % chg. over the last day: 0.33%

The rates were unchanged at the Bank of England meeting held last week, as expected. The big news was that the two remaining “hawks” who had voted for a further rate hike switched to a neutral stance and voted to keep rates unchanged. The “Dovish” stance of the Bank of England and the growth of the US dollar in recent days put pressure on the pound sterling. But we should not forget that the ECB and the US Fed plan to start cutting rates in June, while the Bank of England plans to make its first cut in August. This may give a temporary advantage to the British currency over the euro and the dollar in the medium term.

Trading recommendations

• Support levels: 1.2583,1.2560
• Resistance levels: 1.2645,1.2672,1.2709,1.2765,1.2803

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bearish. The price has reached the resistance level at 1.2645, but the sellers’ reaction is moderately weak, with buyers building the support level at 1.2633 to keep the price from declining. Under these market conditions, the price will likely continue its corrective rise to 1.2672. Selling can be considered both from 1.2645 and 1.2672, subject to sellers’ reactions. There are no optimal entry points for buying now.

Alternative scenario:

if the price breaks through the resistance level at 1.2803 and consolidates above it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 151.30
• Prev. Close: 151.40
• % chg. over the last day: +0.07%

The yen initially rose on Monday on speculation that Japanese authorities may soon intervene in the currency markets to support the yen after Japan’s top currency official, Kanda, said that the current yen weakening is not in line with fundamentals and is caused by speculation. Kanda also added that policymakers will take appropriate measures against excessive fluctuations without considering any options. But by the end of the day, rising T-note yields hurt the yen.

Trading recommendations

• Support levels: 150.84,150.34,149.91,148.91,148.58,148.01,147.06
• Resistance levels: 151.47,151.90

From a technical point of view, the medium-term trend of the currency pair USD/JPY is bullish. The situation has not changed much compared to yesterday. The yen is trying to test the multi-year high of 151.90. Currently, the price is trading at the level of moving averages, while sellers have built a selling zone above 151.47. The price is likely to move down from this zone to 150.83, where we should watch the reaction of the buyers. It is worth considering the buying levels of 150.83 or 150.34, provided the initiative from the buying side. Also, do not rule out currency intervention – it can happen anytime.

Alternative scenario:

if the price breaks and consolidates below the support level of 148.91, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2166
• Prev. Close: 2171
• % chg. over the last day: +0.23%

Precious metals rose moderately on Monday, helped by the weakening dollar. Gold was also supported by comments from ECB Governing Council representative Panetta, who said that inflation in the eurozone is falling rapidly, suggesting that interest rates may be cut sooner. Monday’s weakness in equities also helped boost demand for precious metals. Markets currently estimate the probability that the Fed will begin cutting rates in June at around 70%. Investors also continue to monitor geopolitical events in the Middle East and Eastern Europe for potential risks to financial markets.

Trading recommendations

• Support levels: 2160,2149,2157,2131,2110,2080,2057
• Resistance levels: 2177,2183,2192,2200,2250

From the point of view of technical analysis, the trend on the XAU/USD is bullish. But now the price is correcting, and intraday selling prevails. The MACD indicator has become inactive. Weakness of buyers persists. It is also worth paying attention to the 2 selling zones above, which sellers have lined up to prevent the price from rallying back. Under such market conditions, it is worth looking for sell trades with a target of 2160 or to the priority change level of 2149. There are no optimal entry points for buying right now.

Alternative scenario:

if the price breaks below the support at 2149, the downtrend will likely resume.