The Analytical Overview of the Main Currency Pairs on 2024.04.19

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0672
• Prev. Close: 1.0642
• % chg. over the last day: -0.28%

On Thursday, the euro initially moved up after the Bundesbank raised its estimate of the German economy in the first quarter. However, in the afternoon, the euro was pressured by dovish comments from ECB Governing Council representatives Holzmann and Rehn, who said the ECB would start cutting interest rates in June. Additional pressure on the euro was exerted by the growth of the dollar on Friday morning when it became known about Israel’s retaliatory attack on Iran.

Trading recommendations

• Support levels: 1.0590
• Resistance levels: 1.0648,1.0660,1.0722,1.0795,1.0816,1.0843,1.0865

The trend on the EUR/USD currency pair on the hourly time frame is bearish. The euro is again under selling pressure. The price trades below the moving averages, and the MACD indicator is negative again. Under such market conditions, traders should look for sell deals from the 1.0636-1.0648 area to test the liquidity below 1.0590. The price fixing above 1.0648 may provoke a bullish impulse on closing sales.

Alternative scenario:

if the price breaks the resistance level of 1.0756 and consolidates above it, the uptrend will likely be resumed.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2450
• Prev. Close: 1.2435
• % chg. over the last day: -0.12%

Strong wage growth and service sector inflation may support the pound, but interest rates need to remain higher for a longer period to see these components of inflation come down. Bank of England Governor Andrew Bailey acknowledged yesterday that there is some weakness in the labor market and expects next month’s inflation data to show a strong fall. The Bank of England (BoE) predicts inflation will fall sharply in the first half of this year and reach its 2% target by the middle of the year. All of these contrasting fundamentals are not conducive to a stronger pound, especially at a time when the US dollar remains strong. Additional pressure on the pound was exerted by the rise in the dollar on Friday morning when it became known about the Israeli retaliatory attack on Iran.

Trading recommendations

• Support levels: 1.2373
• Resistance levels: 1.2427,1.2477,1.2520,1.2612,1.2634,1.2674,1.2707

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 consolidated below the support level of 1.2427, and selling pressure is inside the day. Under such market conditions, traders should look for sales from 1.2427 or from the moving averages, with a target of 1.2373. For sellers, it is important to prevent the price from surpassing the moving averages.

Alternative scenario:

if the price breaks through the resistance level of 1.2498 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 154.33
• Prev. Close: 154.63
• % chg. over the last day: +0.19%

Japan’s March 2024 core CPI rose to 2.6% year-on-year, slowing from a four-month high of 2.8% in February and below forecasts of 2.7%. A moderate rise in food prices drove the slowdown, but the rate remained above the BoJ’s 2% target thanks to a weaker yen and strong commodity prices. The BoJ is expected to remain accommodative for some time, with BoJ board spokesman Asahi Noguchi saying that the pace of future policy adjustment will be slow and cannot match that of other major central banks during the recent tightening cycle.

Trading recommendations

• Support levels: 153.95,153.31,152.38,151.93,151.52,151.14,150.80,150.25
• Resistance levels: 154.50,155.00

From a technical point of view, the medium-term trend of the currency pair USD/JPY is bullish. Quotes corrected again, but the support level of 153.95 for the fourth time did not allow the price to consolidate below. Under such market conditions, it is best to consider sell trades from the resistance level of 154.50, subject to the sellers’ reaction. A retest of 153.95 will probably lead to a wave of sell-offs to 153.22. There are no optimal entry points for buying now, as the price trades in the supply zone. A price fixation above 154.50 may trigger a wave of growth up to 155. Don’t forget that the 154.50-155 zone is still where the Bank of Japan may intervene.

Alternative scenario:

if the price breaks and consolidates below the support level of 152.58, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2364
• Prev. Close: 2377
• % chg. over the last day: +0.55%

A stronger dollar on Thursday and rising T-note bond yields were bearish factors for precious metals. In addition, Thursday’s US jobless claims and Philadelphia Fed reports signaled a strengthening economy, which was hawkish for Fed policy. But gold returned to the upside on Friday as investors returned to safe havens, driven by rising geopolitical risks in the Middle East. Israel launched a missile strike on Iran early Friday, targeting drone production in retaliation for Iran’s unprecedented attack last week.

Trading recommendations

• Support levels: 2372,2363,2319,2300,2267,2249,2229,2206
• Resistance levels: 2376,2400,2450,2500

FFrom the technical analysis point of view, the trend on the XAU/USD is bullish. Gold rose sharply at the opening on Friday, but fundamentally, gold failed to consolidate above 2400, which is negative for buyers. Sellers are retaking the initiative intraday. The price is likely to test the 2372 level for the second time. Under such market conditions, it is best to look for intraday selling. The 2372 level can be considered for buy deals, subject to buyers’ reactions.

Alternative scenario:

if the price breaks below the support at 2319, the downtrend will likely resume.