The Analytical Overview of the Main Currency Pairs on 2024.06.10

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0885
• Prev. Close: 1.0802
• % chg. over the last day: -0.77%

Another strong employment report cast doubt on the prospect of interest rate cuts this year. The number of jobs rose by 272,000 in May, beating expectations, and the rise in average hourly earnings was stronger than expected. The US Fed will likely revise its rate cut estimates from 3 rate cuts this year and 3 next year to probably 2 cuts this year and 4 next year.

Trading recommendations

• Support levels: 1.0750,1.0713
• Resistance levels: 1.0785,1.0859,1.0902,1.0923,1.1000

The trend on the EUR/USD currency pair on the hourly time frame has changed to a bearish one. One day was enough for the price to reverse and consolidate below the priority change level. The MACD indicator is negative, with no signs of reversal. Volume spikes show only a bearish reaction. However, since the price has deviated from the middle lines, it is not advisable to sell at current prices. Under such market conditions, buy trades should be sought from 1.9750 or 1.0713, but with confirmation in the form of buyers’ initiative. There is no optimal entry point for selling now.

Alternative scenario:

if the price breaks the resistance level of 1.0902 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2786
• Prev. Close: 1.2719
• % chg. over the last day: -0.53%

Several economic data will be published in the UK this week, the most important of which will be the GDP and Labor Market reports. The labor market is expected to remain flat, with GDP showing a 0.04% month-on-month increase. Until recently, economists expected a rate cut from the Bank of England in June. However, continued pressure on inflation and positive labor market and GDP reports could easily postpone this move until November.

Trading recommendations

• Support levels: 1.2712,1.2687,1,2668,1.2647,1.2608
• Resistance levels: 1.2739,1.2804,1.2828

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish, but it is close to changing. The price fell sharply on Friday’s data on the US labor market due to the sharp growth of the dollar. The price has now reached the support level of 1.2712, where there is a reaction from buyers. Given the divergence on intraday time frames, there is a high probability of growth to the resistance level of 1.2739, so intraday, you can look for buying. We can consider the same level of 1.2739 for sell deals but with confirmation.

Alternative scenario:

if the price breaks the support level of 1.2693 and consolidates below, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 155.54
• Prev. Close: 156.74
• % chg. over the last day: +0.77%

According to revised government data on Monday, Japan’s economy contracted at an annualized rate of 1.8% in the first quarter of this year, slightly better than the initial estimate of 2.0%. Wage growth was slow, and import prices rose as the Japanese yen depreciated against the US dollar. Investors are also keeping a close eye on further action from the Bank of Japan (BoJ), whose monetary policy council meeting will be held later this week.

Trading recommendations

• Support levels: 156.45,155.85,155.12
• Resistance levels: 157.14,157.46,157.98

From the technical point of view, the medium-term trend on the currency pair USD/JPY has changed to an upward trend. On Friday, the price consolidated above the priority change level. The MACD indicator became positive, with no signs of divergence. The latest volume spike indicates bullish pressure. Since the price is now in the selling zone, there may be some buying coverage here, and the price will be adjusted slightly to the midline. Buying should be sought from the moving averages or the 156.45 support level.

Alternative scenario:

if the price breaks below the support level of 155.85, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2377
• Prev. Close: 2294
• % chg. over the last day: -3.62%

Gold prices held below the $2,300 per ounce mark on Monday, at their lowest level in a month, after stronger-than-expected US jobs data dampened expectations that the Federal Reserve will cut interest rates soon this year. The probability of a rate cut in September fell to around 50%, down from 70% before publication. The bearish sentiment was exacerbated by the fact that China’s Central Bank halted gold purchases in May after an 18-month streak of consecutive purchases. Investors are now looking forward to the Fed’s interest rate decision and key US inflation data due for release on Wednesday.

Trading recommendations

• Support levels: 2370,2347,2338,2328,2276,2249,2229,2206
• Resistance levels: 2395,2432,2450,2500

From the point of view of technical analysis, the trend on the XAU/USD has changed to a downtrend. On Friday, the price of gold fell by more than 3%. The price has consolidated below the priority level change. The MACD indicator is in the negative zone with no signs of divergence. The price is expected to decline further to the support level of 2276, where we can look for buying, subject to the reaction of buyers. It is better to use moving averages for selling.

Alternative scenario:

if the price breaks above the resistance level of 2387, the uptrend will likely resume.