The Analytical Overview of the Main Currency Pairs on 2024.04.05

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0834
• Prev. Close: 1.0833
• % chg. over the last day: -0.01%

The US dollar fell to lows on Thursday after weekly US jobless claims rose more than expected to a 2-month high, dovish for Fed policy. But by the end of the trading session, the dollar recovered from Thursday’s worst levels after a sell-off in stock indices, which increased the demand for liquidity for the dollar. This hurt the euro. A negative factor for the euro was the Eurozone producer price index report published on Thursday, which showed that producer prices fell faster than in January, a dovish factor for ECB policy.

Trading recommendations

• Support levels: 1.0818,1.0796,1.0759,1.0743
• Resistance levels: 1.0850,1.0867

The trend on the EUR/USD currency pair on the hourly time frame is bullish. Yesterday, the price reached the resistance level of 1.0867 when sales started. As a result, the price corrected to the levels of moving averages. The MACD indicates that there is a potential for a stronger decline. Under such market conditions, buy trades are best considered from the support levels of 1.0818 or 1.0796, provided buyers react to one of the levels. Selling can be considered from 1.0850, but with short targets, as these would be trades against the main bias.

Alternative scenario:

if the price breaks the support level of 1.0743 and consolidates below it, the downtrend will be resumed with a high probability.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2641
• Prev. Close: 1.2641
• % chg. over the last day: 0.0%

The UK Services PMI from S&P Global fell to 53.1 in March 2024 from 53.8 in the previous month, marking the slowest expansion in four months. Despite the slowdown, growth remained relatively strong, and new work recorded another period of expansion. Companies reported solid business and consumer spending growth despite higher borrowing costs, particularly for those with higher ties to the US and major European markets. Consequently, service providers continued to add jobs at an aggregate level, including at the expense of companies that saw reasons to be optimistic about the future due to expectations of rate cuts by the Bank of England.

Trading recommendations

• Support levels: 1.2615,1.2594,1.2551
• Resistance levels: 1.2651,1.2674,1.2709

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish. GBP/USD quotes reached the selling zone yesterday near the resistance level of 1.2674, where sellers showed a sharp initiative. The price is correcting, and the most suitable levels to join the trend are support levels 1.2615 and 1.2594, subject to price reaction. There are no optimal entry points for selling now, but if the price rises, the resistance level of 1.2651 could become a significant barrier to growth.

Alternative scenario:

if the price breaks the support level of 1.2551 and consolidates below, the downtrend will be resumed with a high probability.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 151.63
• Prev. Close: 151.33
• % chg. over the last day: -0.13%

The Bank of Japan’s quarterly economic report initially pressured the yen on Thursday when the BoJ downgraded its economic assessment for seven of Japan’s nine regions, the biggest downgrade in two years. But by the end of the day, the Japanese yen recovered and rose to a 1-week high against the dollar as T-note yields declined amid a weaker dollar. Comments from Japanese officials regarding a possible intervention also spooked yen sellers, which led to closing previously open sell deals.

Trading recommendations

• Support levels: 150.83,150.25,149.91,148.91,148.58,148.01,147.06
• Resistance levels: 151.34,151.43,151.90,152.50

From a technical point of view, the medium-term trend of the currency pair USD/JPY is bullish. The Japanese price tested the liquidity below 150.83 yesterday, and buyers reacted moderately. The MACD indicator indicates that the decline is not yet complete, and there is a high probability of another downward wave. We can consider the offer zone 151.34-151.4 for sell deals, but only if sellers react. There are no optimal entry points for buying now, as the price is trading before the resistance level.

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: 2299
• Prev. Close: 2291
• % chg. over the last day: -0.35%

The monthly Nonfarm payrolls labor market report will be released in the US today. The US economy is expected to have added 205k new jobs in March, the unemployment rate is expected to be unchanged at 3.9%, and average hourly earnings are expected to have fallen from 4.3% to 4.1% year-over-year. Suppose the set of numbers is generally positive, especially if NFP turns hotter than expected. In that case, it will likely push back the likelihood of a rate cut, providing support for the US dollar. Risk assets, indices, and gold would come under pressure in such a case. However, if the data set turns out to be worse than expected, especially regarding wages, it will pressure the US dollar, which is positive for precious metals.

Trading recommendations

• Support levels: 2265,2249,2229,2206
• Resistance levels: 2290,2300,2350

From the point of view of technical analysis, the trend on the XAU/USD is bullish. The resistance level 2300 has pushed the gold price away from its historical highs. Moreover, there was a structure change on intraday time frames, and selling pressure persisted. The price is correcting, which will open the way for investors to join the uptrend, but it is best to do so after the publication of the NFP news. The most optimal level for buying is the zone below 2265. If buyers react to this level, it will be a good long signal. Sell deals can be sought intraday with a target of up to 2265. In case of a stronger sell-off on the news, the 2249 support level should be considered for buying.

Alternative scenario:

if the price breaks below the support at 2228, the downtrend will likely resume.