The Analytical Overview of the Main Currency Pairs on 2024.06.13

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0735
• Prev. Close: 1.0809
• % chg. over the last day: +0.69%

The euro soared above $1.08, benefiting from the dollar’s general weakness after US inflation data came below prognoses. May US CPI unexpectedly declined to 3.3% y/y from 3.4% y/y in April versus expectations of no change at 3.4% y/y. Core CPI, excluding food and energy, fell to a 3-year low of 3.4% y/y, weaker than the expectations of 3.5% y/y. Meanwhile, the Fed left rates unchanged as expected and signaled only one rate cut this year and four cuts next year, less than market expectations for 2024.

Trading recommendations

• Support levels: 1.0799,1.0772
• Resistance levels: 1.0859,1.0902,1.0923,1.1000

The trend on the EUR/USD currency pair on the hourly time frame is bearish. However, market conditions are developing in favor of a priority change. Now, the price is trading above the moving averages, but the intraday pressure is behind the sellers. The MACD indicator is in the positive zone but points to a decline. Under such market conditions, buying should be sought from the demand zones below 1.0799 or 1.0772 on a deeper correction. Entry should be made only with confirmation. The main profit target is 1.0859.

Alternative scenario:

if the price breaks the resistance level of 1.0859 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2729
• Prev. Close: 1.2797
• % chg. over the last day: +0.53%

In the UK, the Bank of England is expected to leave rates unchanged next week, with traders expecting a rate cut in August or September. The latest data showed that the UK economy stalled in April, matching estimates, while industrial production and construction output fell more than the prognosis. Labor market data showed that wage growth remained strong, but the unemployment rate unexpectedly rose to 4.4%, the highest since September 2021, with vacancies continuing to fall.

Trading recommendations

• Support levels: 1.2781,1.2739,1.2687,1,2668,1.2647,1.2608
• Resistance levels: 1.2828

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is still upward. After the liquidity test above 1.2828, sellers took the initiative by forming a zone of blocked buyers. As a rule, such zones are further tested. Under such market conditions, buying should be sought from the support zone below 1.2781. But if the price consolidates below, we should expect a decline to 1.2739.

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: 157.07
• Prev. Close: 156.70
• % chg. over the last day: -0.24%

The yen rose against the dollar on Wednesday after Japan’s Producer Price Index rose more than expected in May, a hawkish factor for the Bank of Japan’s policy. The yen also strengthened as T-note bond yields fell amid a weaker-than-expected US CPI report for May. Japan’s Producer Price Index for May rose by 2.4% y/y, beating expectations of 2.0% y/y and the biggest increase in 9 months. Swaps estimate the odds of a 10bp BoJ rate hike at 5% at the June 14 meeting and 75% at the July 31 meeting.

Trading recommendations

• Support levels: 155.73,155.12
• Resistance levels: 157.38,157.49,157.71,157.98

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The Japanese yen strengthened yesterday on the fall of the US dollar. As a result, the price tested the support at 155.73, where the buyers took the initiative. With a high probability, the price will test the resistance zone at 157.38–157.49 again, where we can look for sales if there is a reaction. There are no optimal entry points for buying now.

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: 2317
• Prev. Close: 2324
• % chg. over the last day: +0.30%

The weaker-than-expected US CPI report for May led to a decline in T-note yields and increased the probability that the Fed will cut interest rates, which is bullish for precious metals. In addition, the failure of ceasefire talks in Gaza on Wednesday signaled that the war would continue, which boosted demand for precious metals. A report on producer inflation is expected in the US today. The decline in indicators may give additional support to gold.

Trading recommendations

• Support levels: 2309,2300,2276,2249,2229,2206
• Resistance levels: 2339,2370,2387,2432,2450,2500

From the point of view of technical analysis, the trend on the XAU/USD is downward. Yesterday, the price corrected to the resistance zone above 2339. For selling, traders can consider the resistance level at 1.2327, where sellers reacted sharply. Recent volume spikes also indicate the presence of large selling. Under these market conditions, we should expect a decline to the 2300 support level. If there is a reaction from buyers from this level, we can look for buy trades.

Alternative scenario:

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