The Analytical Overview of the Main Currency Pairs on 2024.05.13

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0778
• Prev. Close: 1.0770
• % chg. over the last day: -0.07%

The US dollar strengthened thanks to the report on declining US consumer sentiment to a six-month low. The rise was driven by concerns over rising inflation expectations and the labor market, while Federal Reserve policymakers continued to advocate for higher interest rates amid persistent inflationary pressures. The European Central Bank is expected to start cutting interest rates in Europe in June, while the Federal Reserve will likely wait until September or later. Markets expect the ECB to cut rates by 70 basis points this year and the Fed by 45 basis points. Such a differential of expectations is not in favor of the European currency.

Trading recommendations

• Support levels: 1.0749,1.0713,1.0688,1.0652,1.0623,1.0590
• Resistance levels: 1.0795,1.0843,1.0865

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The supply zone of 1.0790–1.0795 does not give the price further room for growth. The price is bouncing sharply from this area. Currently, the price is forming a narrow flat at moving average levels. There is weak selling pressure inside the day. Under such market conditions, buying should be sought from the support zone below 1.0749, but with confirmation. For now, there are no optimal entry points for sell deals.

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: 1.2515
• Prev. Close: 1.2523
• % chg. over the last day: +0.06%

The UK economy came out of recession with a solid 0.6% growth in the first quarter of 2024, beating expectations. The Bank of England now predicts the economy will grow by 0.5% for the year, up from the previous February expectations of 0.25%. That allowed the British pound to rise to 1.25 against the US dollar on Friday. Traders raised bets slightly on a June rate cut, but a 25 bps rate cut in August is still fully priced.

Trading recommendations

• Support levels: 1.2487,1.2465,1.2446,1.2423
• Resistance levels: 1.2537,1.2562,1.2611,1.2634,1.2674,1.2707.

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The situation has mostly stayed the same compared to Friday. The British pound expectedly rebounded from the resistance level of 1.2537 and is now trading at the levels of moving averages, forming a flat accumulation. Under such market conditions, we should expect the price to drop to 1.2487. Therefore, intraday selling can be looked for today.

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: 155.46
• Prev. Close: 155.75
• % chg. over the last day: +0.18%

The yen continues to decline amid speculation that the Japanese authorities will not intervene again in the Forex market to support the yen anytime soon, after Masato Kanda, Japan’s top currency official, said last week that the government does not need to intervene in the Forex market if market movements are orderly. On Friday, the yen received short-term support from Thursday’s summary of the BoJ’s April 25–26 meeting, which showed policymakers are considering a faster rate hike if a weak yen worsens the inflation outlook. Swaps estimate the odds of a 10 bps BoJ rate hike at the June 14 meeting at 34%.

Trading recommendations

• Support levels: 155.06,153.83,153.12,151.93,151.59
• 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. The quote growth has slowed down a bit. The price is trading at the levels of moving averages, while the MACD indicator has become inactive. Most likely, the price will continue to grow from the moving average lines. Under these market conditions, intraday buying is possible to test liquidity above 156.28. There are no optimal entry points for selling 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: 2346
• Prev. Close: 2361
• % chg. over the last day: +0.64%

Gold prices rose to $2,370 per ounce on Friday, reaching the highest level in three weeks. This was supported by expectations of a Federal Reserve rate cut after weak US jobs data. Last week’s data showed a larger-than-expected rise in jobless claims, indicating a slowdown in the labor market, which led investors to expect the Fed to begin easing in September. Traders are now preparing for the April CPI and PPI releases this week. Meanwhile, escalating tensions in the Middle East continue to boost the appeal of the safe-haven currency.

Trading recommendations

• Support levels: 2345,2328,2307,2276,2249,2229,2206
• Resistance levels: 2372,2418

From the point of view of technical analysis, the trend on the XAU/USD has changed to a bullish one. As expected, the price broke and consolidated above the priority level change. On Friday, the price reached the supply zone above 2372, where sellers reacted. Currently, the price is correcting. Under these market conditions, we can look for buying from the support level of 2344 or 2328 on a stronger decline. There are no optimal entry points for selling now.

Alternative scenario:

if the price breaks and consolidates below the 2306 support level, the downtrend will likely resume.