The Analytical Overview of the Main Currency Pairs on 2024.05.02

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0671
• Prev. Close: 1.0708
• % chg. over the last day: +0.34%

As expected, the FOMC left the rate unchanged for the 6th consecutive meeting. At the press conference, US Fed Chair Jerome Powell emphasized that inflation has remained stubbornly high recently. He added that he had no plans to cut interest rates until he had “greater confidence” that price growth would steadily slow down to the 2% target. Despite the hawkish tone of the statement, the dollar index fell sharply on the back of falling government bonds, giving risk assets room to grow.

Trading recommendations

• Support levels: 1.0688,1.0652,1.0623,1.0590
• Resistance levels: 1.0727,1.0756,1.0795,1.0843,1.0865

The trend on the EUR/USD currency pair on the hourly time frame is bearish. Yesterday, the price reached the demand zone below 1.0652, where buyers showed initiative, after which the price jumped sharply to 1.0727. Intraday buying pressure remains, with recent volume spikes pointing to large bulls. Under these market conditions, buy trades are best-considered intraday from the moving averages with a target of 1.0752, but with confirmation as the price is in front of the supply zone. There are no optimal entry points for selling right now.

Alternative scenario:

if the price breaks the resistance level of 1.0752 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2483
• Prev. Close: 1.2525
• % chg. over the last day: +0.34%

Recent market sentiment suggests an 80% chance that the Bank of England will cut rates in August, followed by a 60% chance of a subsequent rate cut this year. In contrast, the probability of the US Federal Reserve’s first rate cut in September has decreased, reflecting concerns about slow progress in containing inflation to the 2% target. Bank of England Governor Andrew Bailey recently stated that UK inflation appears to be approaching the 2% target. At the same time, his colleagues Megan Greene and Huw Pill have taken a more hawkish tone, suggesting that it is premature to consider an interest rate cut.

Trading recommendations

• Support levels: 1.2473,1.2440,1.2423,1.2423,1.2381,1.2312
• Resistance levels: 1.2548,1.2581,1.2612,1.2634,1.2674,1.2707

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish. Yesterday, the price corrected to the zone near the support at 1.2473, where buyers were active. The latest surge in volumes indicates the presence of large buyers, so with a high probability the price growth will continue. Under such market conditions, buy trades should be sought from the moving averages to break through the resistance level 1.2548 and move higher. There are no optimal entry points for selling now.

Alternative scenario:

if the price breaks through the resistance level of 1.2522 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 157.69
• Prev. Close: 154.58
• % chg. over the last day: -2.01%

The Japanese yen weakened again to 156 per dollar on Thursday after jumping to 153 per dollar in the previous session on suspicions of Japanese government intervention, the second this week. Japan’s government declined to confirm whether it was behind the yen’s brief rise, but there are no other explanations for the sharp increase in the Japanese currency. Swaps estimate the odds of a 10 bps BoJ rate hike at the June 14 meeting at 19%.

Trading recommendations

• Support levels: 153.23,152.38,151.93
• Resistance levels: 156.57,157.12,158.20,160.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY has changed to a downtrend. The 2 interventions by the Japanese government allowed the price to consolidate below the priority level for some time. At the same time, the volumes indicate the presence of a significant seller. Fundamentally, the situation on USD/JPY remains bullish, but technically, a new flat liquidity accumulation may begin to form. Under such market conditions, intraday selling can be sought at current prices or from the resistance level of 156.57. There are no optimal entry points for buying right now.

Alternative scenario:

if the price breaks through and consolidates above the resistance level of 158.00, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2289
• Prev. Close: 2317
• % chg. over the last day: +1.22%

Gold rose to $2,320 an ounce on Thursday, rebounding from a four-week low, as investors continued to assess the Federal Reserve’s recent decision and signaled that it was still leaning toward a potential rate cut. On Wednesday, the Fed kept interest rates at current levels as expected, with Chairman Jerome Powell noting that the Central Bank’s next move is unlikely to be a rate hike. Investors are now looking forward to the US non-farm payrolls report, which will be released on Friday.

Trading recommendations

• Support levels: 2314,2292,2267,2249,2229,2206
• Resistance levels: 2337,2350,2367,2400

From the point of view of technical analysis, the trend on the XAU/USD is bearish. The situation with gold is less clear than with currencies. Technically, the price has yet to reach the support level, and there is a high probability that the price will try to reach 2268. However, we should rely on something other than expectations but on the actual reaction to the cost. It shows that the supply zone above 2323 has sellers, while the zone below 2309 indicates the presence of buyers. So buying is best looked for from 2309 or 2289 if the price drops deeper. Selling can be considered inside but with short targets and close-stop loss.

Alternative scenario:

if the price breaks and consolidates above the resistance level of 2400, the uptrend will likely resume.