The Analytical Overview of the Main Currency Pairs on 2024.05.09

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0751
• Prev. Close: 1.0747
• % chg. over the last day: -0.04%

The euro ended Wednesday with a slight decline, pressured by the strengthening of the dollar. In addition, expectations that the ECB will start cutting interest rates next month are a bearish factor for the euro. ECB Governing Council spokesman Wunsch said yesterday that since there is “no sign of a weakening” of inflation expectations in the Eurozone over the longer term, “the costs of keeping policy tight for too long seem to outweigh the costs of premature easing.” Swaps estimate the probability of a 25 bps ECB rate cut at the next meeting on June 6 at 94%.

Trading recommendations

• Support levels: 1.0739,1.0713,1.0688,1.0652,1.0623,1.0590
• Resistance levels: 1.0757,1.0795,1.0843,1.0865

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price forms a flat accumulation, where the upper boundary is the resistance level 1.0757, and the lower boundary is the support level 1.0739. Under such market conditions, buying should be sought from the support zone below 1.0739 or, in case of a deeper correction, from 1.0713. Selling can be considered from 1.0757, but if the price sells this zone, it will open a growth space up to 1.0795.

Alternative scenario:

if the price breaks the support level at 1.0673 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2509
• Prev. Close: 1.2496
• % chg. over the last day: -0.10%

The Bank of England (BoE) will hold a monetary policy meeting today. The Bank of England is expected to leave the interest rate at 5.25% while keeping its forward guidance unchanged and keeping options open on the timing of rate cuts. This will cause the focus of traders and investors to shift to BoE Governor Bailey’s speech. If the press conference does not provide clarity on the timing of the first rate cut, GBP/USD is likely to continue rising. But if Bailey hints at the first rate cut for the end of summer, presumably for the August meeting, it could hurt the British currency against the US dollar.

Trading recommendations

• Support levels: 1.2486,1.2465,1.2423,1.2423
• Resistance levels: 1.2512,1.2530,1.2562,1.2611,1.2634,1.2674,1.2707

From the technical analysis point of view, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The British pound expectedly fell to 1.2482 but failed to consolidate below the level. Buyers started to defend the level in every possible way, while another demand zone was formed at 1.2486. Under such market conditions, we should expect a rise to 1.2512 or 1.2530 to distribute the accumulated liquidity. There are no optimal entry points for selling.

Alternative scenario:

if the price breaks the support level of 1.2465 and consolidates below, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 154.52
• Prev. Close: 155.47
• % chg. over the last day: +0.61%

The yen remains under pressure from Tuesday when Masato Kanda, Japan’s top currency official, said that the government does not need to intervene in the forex market if market movements are orderly, indicating that Japan will tolerate a weaker yen. Since the Bank of Japan has no plans to tighten monetary policy shortly, the yen simply does not have the fundamentals to strengthen further.

Trading recommendations

• Support levels: 155.06,153.83,153.12,151.93,151.59
• Resistance levels: 155.52,156.29,156.57,157.12,158.20,160.00

From a technical point of view, the medium-term trend of the currency pair USD/JPY is bearish. The Japanese yen continues losing ground against the dollar and other currencies. There is buying pressure intraday despite the general bearish bias that emerged due to interventions. Price tested liquidity above 155.52, where sellers showed a weak reaction. Under such market conditions, we can look for selling from the area above this resistance but subject to consolidation below the level. If the price fails to consolidate below 155.52, buying can be sought intraday up to the resistance level of 156.28.

Alternative scenario:

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

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2314
• Prev. Close: 2309
• % chg. over the last day: -0.21%

On Wednesday, Boston Fed Bank President Susan Collins emphasized the need to cool the US economy to meet the central bank’s 2% inflation target. According to CME’s FedWatch tool, there is a 66% chance of a rate cut in September. Lower rates make it more attractive to hold non-yielding bullion. Meanwhile, Hamas said Wednesday it was unwilling to make further concessions to Israel in Gaza cease-fire talks despite ongoing talks in Cairo aimed at ending Israel’s seven-month offensive.

Trading recommendations

• Support levels: 2307,2276,2249,2229,2206
• Resistance levels: 2327,2337,2350,2367,2400

From the point of view of technical analysis, the trend on the XAU/USD is bearish. The price is forming a broadly volatile flat at the levels of moving averages, liquidity is accumulating. The support zone 2307 prevents the price from continuing the decline. Buyers prevail at Thursday’s intraday opening. The MACD indicator has become inactive. Under such market conditions, it is worth looking for buy deals with a target of 2327, where we need to close part of the position. There are no optimal entry points for selling now.

Alternative scenario:

If the price breaks and consolidates above the resistance level of 2350, the uptrend will likely resume.