The Analytical Overview of the Main Currency Pairs on 2024.05.24

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0822
• Prev. Close: 1.0815
• % chg. over the last day: -0.06%

The euro initially increased on Thursday because of stronger-than-expected first-quarter Eurozone payroll reports and May S&P Manufacturing PMI. However, strong economic reports from the US bolstered the prospects that the Federal Reserve would further delay interest rate cuts, sending the Dollar Index to a one-week high and putting pressure on the euro.

Trading recommendations

• Support levels: 1.0818,1.0803,1.0781,1.0750,1.0713,1.0688,1.0652
• Resistance levels: 1.0848,1.0861,1.0885,1.0903,1.0923

The trend on the EUR/USD currency pair on the hourly time frame is bullish. Currently, the price is correcting and approaching the support level of 1.0800. The MACD indicator shows divergence, which increases the probability of rebound. Under such market conditions, buy trades can be considered from the level of 1.0800, but they are subject to the buyers’ reaction. There are no optimal entry points for selling right now.

Alternative scenario:

if the price breaks the support level at 1.0766 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2713
• Prev. Close: 1.2697
• % chg. over the last day: -0.12%

The British pound rose to $1.275, the strongest in two months, recovering from a period of volatility as markets eased expectations of a rate cut by the Bank of England and pondered the political future of the UK. Prime Minister Rishi Sunak announced that the UK will hold a national election on July 4. Opinion polls favor a change of government to one led by the Labour Party, adding political risk and uncertainty to the UK’s recent volatile borrowing levels.

Trading recommendations

• Support levels: 1.2687,1,2668,1.2647,1.2608,1.2567,1.2548,1.2487
• Resistance levels: 1.2733,1.2716,1.2762

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish. Recently, the British pound has received some support on the background that inflation fell not as much as expected. However, further growth of the pound is in question. The MACD indicates the presence of sellers, and buyers are not reacting to the 1.2687 support level. Under such market conditions, sell deals can be considered intraday up to the support level of 1.2668, where we can look for buy trades, provided the buyers react.

Alternative scenario:

if the price breaks the support level of 1.2643 and consolidates below, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 156.70
• Prev. Close: 156.89
• % chg. over the last day: +0.12%

Japan’s core CPI, which excludes food prices but includes fuel costs, came in at 2.2% y/y in April 2024, slowing for the second consecutive month after 2.6% in March, which is in line with expectations. The slowdown was driven by weaker food inflation, but it remained above the BoJ’s 2% target as the weak yen raised the cost of imports. Lower inflation is dovish for the yen, especially against divergent monetary policy between the BoJ and other central banks. However, shortly, BoJ plans to raise the yield on 10-year Japanese bonds to 1%, which may support the yen.

Trading recommendations

• Support levels: 155.29,155.15,154.60,153.83,153.12,151.93,151.59
• Resistance levels: 157.12,158.20,160.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is still bearish, but the conditions for a trend change are forming. The price has reached the level of priority change at 157.12, but the sellers’ reaction to the level is weak. Selling can be considered from the resistance zone near 157.12, but only with confirmation in the form of initiative. A breakout of 157.12 could trigger a sharp upside wave to 158.

Alternative scenario:

if the price breaks through and consolidates above the resistance level of 157.12, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2380
• Prev. Close: 2328
• % chg. over the last day: -2.23%

Precious metals prices declined sharply on Thursday, while gold fell to a 2-week low. The negative fallout from the hawkish minutes of the May 1 FOMC meeting released on Wednesday afternoon dragged down precious metals prices on Thursday, as the minutes indicated that policymakers favored keeping interest rates at higher levels for longer to fight inflation. In addition, global bond yields put pressure on precious metals prices on Thursday.

Trading recommendations

• Support levels: 2328,2307,2276,2249,2229,2206
• Resistance levels: 2350,2395,2432,2450,2500

From the point of view of technical analysis, the trend on the XAU/USD is bearish. However, the price has reached an important buyer zone where there is a reaction. The MACD indicator is negative, but the current momentum is behind the buyers. Under these market conditions, intraday buying can be sought up to the resistance level of 2350. There are no optimal entry points for selling right now.

Alternative scenario:

if the price breaks above the resistance level of 2426, the uptrend will likely resume.