The Analytical Overview of the Main Currency Pairs on 2024.06.11

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0772
• Prev. Close: 1.0765
• % chg. over the last day: -0.06%

The Dollar Index rose on Monday by 0.24%, reaching the maximum for 3 weeks. That day, the dollar rose thanks to support from a stronger-than-expected US payrolls report for May released last Friday, which limited expectations for a rate cut by the US Federal Reserve. Markets are pricing in a 25bp chance of a rate cut of 1% at the June 11–12 FOMC meeting, 8% at the next meeting on July 30–31, and 50% at the next September 17–18 meeting. As for the European Central Bank, swaps estimate the odds of a 25bp ECB rate cut at 6% for the July 18 meeting and 48% for the September 12 meeting. This situation will favor the eurodollar to trade in a balanced structure with no definite unidirectional moves (except for intraday time frames).

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 is bearish. Yesterday, the price reached the 1.0750 support level and went slightly lower. But then followed the reaction of buyers, and it looks like a partial fixation of profits. The MACD indicator is still negative, with no signs of reversal. Volume spikes only show a bearish reaction. Under such market conditions, buy trades should be sought from 1.0750 or 1.0713, but with confirmation in the form of buyers’ initiative. For sell deals, the 1.0770–1.0785 area can be considered.

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: 1.2720
• Prev. Close: 1.2729
• % chg. over the last day: +0.07%

Today, the UK will release data on the labor market. Bank of England’s expectations are sensitive to the payroll data. Average weekly earnings (three-month annualized average) were steady in the four months to March, averaging 5.7%. They peaked last July at 8.5%. Nevertheless, after a higher-than-expected Consumer Price Index at the end of May, the market postponed the first-rate cut until November. Therefore, strong labor market data will support the British currency in the coming days.

Trading recommendations

• Support levels: 1.2711,1.2687,1,2668,1.2647,1.2608
• 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. Today, the price reached the resistance area at 1.2739, where the sellers showed a reaction. On intraday time frames, it is appropriate to look for selling today. The first level for taking profits is 1.2711. However, there is a high probability that the price will go to renew Monday’s low.

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: 156.64
• Prev. Close: 156.99
• % chg. over the last day: +0.22%

The Bank of Japan will hold a monetary policy meeting this week on Friday. This meeting is expected to discuss the reduction in bond purchases. Most predict that the board will reduce bond purchases from 6 trillion yen ($38.6 billion) per month. Some investors also expect the Central Bank to also lay the groundwork for an interest rate hike next month. The reduction in bond purchases would mark the Bank of Japan’s first clear step toward quantitative tightening since it abandoned a massive stimulus program in March and embarked on a path of policy normalization. This could provide some solid footing for the Japanese yen.

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 is bullish. The Japanese yen continues to lose ground against the US dollar. But most likely, before tomorrow’s news on inflation, we should not expect significant movements. Now, the price is trying to test liquidity above 157.46, but considering the divergence on MACD, it is risky to look for buying. There are also no entry points for selling as there is no reaction from the selling side.

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: 2288
• Prev. Close: 2311
• % chg. over the last day: +1.01%

Gold prices fell near the $2,300 per ounce mark on Tuesday, trading near one-month lows as investors await US inflation data and Federal Reserve policy announcements later this week. Traders will be closely monitoring when the Fed will start cutting rates in light of last Friday’s stronger-than-expected payrolls report. Markets have lowered expectations for Fed policy easing this year, and investors now estimate a 50% chance of a rate cut in September.

Trading recommendations

• Support levels: 2376,2347,2338,2328,2276,2249,2229,2206
• Resistance levels: 2327,2339,2395,2432,2450,2500

From the point of view of technical analysis, the trend on the XAU/USD is downward. The price has corrected to the moving average levels, but the bias remains for sellers. The MACD indicator also indicates that bearish pressure is ready to increase again. With the euro and pound in similar situations, gold is also expected to decline to the 2276 level. If buyers want to contain this onslaught of sellers, they need to hold the 2302 support level, but the probability of this scenario is low.

Alternative scenario:

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