The Analytical Overview of the Main Currency Pairs on 2024.05.03

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0713
• Prev. Close: 1.0724
• % chg. over the last day: +0.10%

The monthly Non-farm payrolls labor market report will be released in the US today. In April, the US economy is expected to add 243,000 new jobs after 303,000 in March. The unemployment rate was unchanged at 3.8%, and average hourly earnings are expected to remain at 4.1% year-over-year. The probability of a rate cut from the US Fed in June is minimized. Therefore, if the current labor market report shows further signs of cooling, it will dramatically increase the likelihood that the US Fed may cut rates in the summer. Such a reassessment of expectations will hurt the US dollar, allowing risk assets to gain an advantage.

Trading recommendations

• Support levels: 1.0712,1.0688,1.0652,1.0623,1.0590
• Resistance levels: 1.0752,1.0795,1.0843,1.0865

The trend on the EUR/USD currency pair on the hourly time frame is bearish. But the price is approaching the priority change level. Yesterday, the price reached the demand zone below 1.0688, where the buyers again showed initiative. There is still buying pressure intraday, with recent volume spikes pointing to large bulls. Under these market conditions, buy trades are better, all 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: 1.2523
• Prev. Close: 1.2533
• % chg. over the last day: +0.08%

The fundamental picture of the British currency has stayed the same over the last few days. Market sentiment points to an 80% probability that the Bank of England will cut rates in August, followed by a 60% probability of a further rate cut this year. In contrast, the US Federal Reserve’s probability of making its first rate cut in summer has fallen. This reassessment may contribute to strengthening the US dollar against the British currency, but much will depend on today’s report on the US labor market.

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 again to the area near the support at 1.2473, where buyers were active again. Recent volume spikes indicate 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 of 1.2548 and increase to 1.2581. There are no optimal entry points for selling now.

Alternative scenario:

if the price breaks the support level of 1.2331 and consolidates below, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 154.26
• Prev. Close: 153.61
• % chg. over the last day: -0.42%

Bloomberg estimates that the Bank of Japan intervened in the foreign exchange market late Wednesday for about 3.5 trillion yen ($22.6 billion), the second time this week. The Japanese yen strengthened to 153 per dollar on Friday, gaining more than 3% in a trading week. Japan’s government declined to confirm whether it was behind the sudden rise of the currency, although Bank of Japan data showed Tokyo spent about $60 billion to support the yen.

Trading recommendations

• Support levels: 153.23,152.38,151.93
• Resistance levels: 156.29,156.57,157.12,158.20,160.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. Conducting 2 interventions by the Japanese government allowed the Japanese yen to intercept the advantage against the dollar. Fundamentally, the situation on USD/JPY remains bullish, but technically, a new flat liquidity accumulation may start to form. For this to happen, a strong support zone must be found. Under such market conditions, intraday selling at current prices can be sought to test liquidity below 152.28. There are no optimal entry points for buying 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: 2320
• Prev. Close: 2303
• % chg. over the last day: +0.74%

Gold and silver recovered slightly yesterday. Active purchases by global central banks support gold. The World Gold Council reported that global central banks added 290 tons of gold to their reserves in the first quarter, the most significant increase since data collection began in 2000.

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 needs to be clarified with currencies. Technically, the price has yet to reach the support level, and there is a high probability that the price will try to get 2268. However, we should rely on something other than expectations but on the actual reaction to the cost. It shows that the price reacted yesterday to the demand zone below 2389 and formed another zone below 2297. Selling can be considered intraday 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.