The Analytical Overview of the Main Currency Pairs on 2024.03.29

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0818
• Prev. Close: 1.0788
• % chg. over the last day: -0.27%

The dollar index rose to a 6-week high on Thursday, ending the trading with 0.20% growth. As a result, EUR/USD quotes fell to a 5-week low. Fed member Waller’s hawkish comments on Wednesday night boosted the dollar when he said that the Fed would not be in a hurry to ease monetary policy. The US dollar extended gains amid the release of mostly better-than-expected US economic reports on Thursday, which were hawkish for Fed policy. Markets estimate the odds of a 25 bps rate cut at 10% at the next FOMC meeting on May 1 and 67% at the June 12 meeting.

Trading recommendations

• Support levels: 1.0771,1.0723
• Resistance levels: 1.0817,1.0843,1.0864,1.0886,1.0923,1.0936,1.0953,1.1000

The trend on the EUR/USD currency pair on the hourly time frame is bearish. Volatility on the eve of the Easter holidays is decreasing. But let’s remember that today, the PCE Price Index report will be published in the US, leading to a surge in volatility. Yesterday, the price declined in the buying zone from 1.0771 to 1.0792. Initially, the buyers took the initiative, but by the end of the day, the sellers pushed the price back up again. The MACD indicator signals a divergence, but the intraday pressure remains with the sellers. Under these market conditions, buying can only be considered if the price closes above 1.0792 again. As long as the price is below 1.0792, there is a high probability of a further decline to 1.0762 or lower to 1.0723.

Alternative scenario:

if the price breaks through the resistance level of 1.0837 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: 1.2628
• Prev. Close: 1.2620
• % chg. over the last day: -0.06%

The UK economy contracted by 0.3% in the last quarter of 2023, entering a technical recession as high inflation, record borrowing costs, and weak external demand put pressure on demand and activity. This situation will pressure policymakers to start the rate-cut cycle earlier. For his part, Bank of England’s Haskell noted that there is still a long way to go before a rate cut. At the same time, his colleague Mann cautioned against excessive expectations of interest rate cuts this year, pointing out that the UK is unlikely to decide ahead of the Fed.

Trading recommendations

• Support levels: 1.2610,1.2574,1.2560
• Resistance levels: 1.2648,1.2672,1.2709,1.2765,1.2803

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bearish. Yesterday, the price tested the resistance level of 1.2648, where sellers reacted moderately. Now, the price is forming a narrow consolidation at the level of moving averages. The buyers need to keep the price above the level of 1.2610. Therefore, if there is a moderate reaction to this level, we can consider buying with a target of 1.2672. But for now, the probability of price decline is much higher. The price below 1.2610 will open the way to 1.2574; intraday sell trades can be opened in such a scenario.

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: 151.46
• Prev. Close: 151.37
• % chg. over the last day: -0.06%

Japan’s Tokyo Core CPI came in at 2.4% year-on-year in March 2024, slowing from a four-month high of 2.5% in February, which was in line with expectations. Nevertheless, the latest figure remained above the 2% target, confirming the Bank of Japan’s decision to end its negative interest rate policy. Tokyo inflation data is widely seen as a leading indicator of price developments across the country, and national inflation data will be released in about three weeks. The Japanese yen is holding near 151 per dollar, recovering slightly after falling to new 34-year lows earlier this week as Japanese authorities signaled a willingness to intervene in currency markets.

Trading recommendations

• Support levels: 150.83,150.25,149.91,148.91,148.58,148.01,147.06
• Resistance levels: 151.53,151.90

From a technical point of view, the medium-term trend of the currency pair USD/JPY is bullish. The situation has not changed compared to yesterday. The price filled the first buying zone and formed a selling zone above, with a high probability that the price would continue the corrective movement within the uptrend. Intraday, we can consider selling from the 151.53 level with a target of 150.84. For sellers, it is desirable not to let the price consolidate above 151.50. Otherwise, the upward rally will continue. There are no optimal entry points for buying now.

Alternative scenario:

if the price breaks and consolidates below the support level of 150.25, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2192
• Prev. Close: 2233
• % chg. over the last day: +1.87%

Gold held above $2,230/oz on Friday, hovering at all-time highs amid bets that major central banks will move to cut interest rates this year. In addition, geopolitical tensions in the Middle East are driving demand for precious metals after ceasefire talks between Israel and Hamas stalled. The metal price rose more than 9% during March. The fundamental picture for gold is that it keeps room for further growth.

Trading recommendations

• Support levels: 2233,2206,2188,2149,2157,2131,2110
• Resistance levels: 2250

From the point of view of technical analysis, the trend on the XAU/USD is bullish. The sellers failed to hold the selling zone below 2200 and, as a result, started to cover losses, which also stimulated the price to historical highs. Since we do not have above historical levels, we should focus on psychological and round levels. The nearest such level is 2250. Technically, the price is now highly overbought and has deviated from the moving averages, and the MACD indicator is signaling divergence on many timeframes. It is worth waiting for a technical correction to the first moving line for buy deals. There are no prerequisites for selling now. Gold is not trading today due to the holidays, and with the PCE price index report, the price could make a price gap on Monday at the open.

Alternative scenario:

if the price breaks below the support at 2176, the downtrend will likely resume.