The Analytical Overview of the Main Currency Pairs on 2024.06.17

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0740
• Prev. Close: 1.0701
• % chg. over the last day: -0.36%

The Dollar Index rose by 0.33% on Friday and reached a 6-week high. Increased political uncertainty in France is weighing on the euro and supporting the dollar. In addition, hawkish comments from Fed Chair Cleveland Mester helped strengthen the dollar when she said she wants to see a few more months of good inflation data before cutting interest rates.

Trading recommendations

• Support levels: 1.0693,1.0666,1.0590
• Resistance levels: 1.0773,1.0744,1.0816

The trend on the EUR/USD currency pair on the hourly time frame is bearish. On Friday, the price reached the support level of 1.0666, where the buyers reacted. At the same time, the surge in volumes also confirms the presence of a major buyer. Considering the divergence on the MACD indicator, there is a high probability of price growth up to 1.0744. The support level of 1.0693 can be considered for buying, but with confirmation. There are no optimal entry points for selling now.

Alternative scenario:

if the price breaks the resistance level of 1.0816 and consolidates above it, the uptrend is likely to be resumed.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2754
• Prev. Close: 1.2686
• % chg. over the last day: -0.53%

The UK inflation data will be released this week, followed by the Bank of England monetary policy meeting. Inflation in the UK has been falling steadily over the past year and is set to hit the Bank of England’s 2% target in the coming months. Inflation data may force the UK central bank to take a slightly softer stance if market forecasts come true. The Bank of England plans to cut rates at its September meeting, with another 25bp cut expected later in the year.

Trading recommendations

• Support levels: 1.2739,1.2705,1.2687,1,2668,1.2647,1.2608
• Resistance levels: 1.2695,1.2735,1.2806

From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame has changed to a downtrend. The price has confidently consolidated below the priority level. On Friday, the price reached the support level of 1.2658, where buyers showed a reaction, and the volumes also confirmed this. With these market conditions, traders should look for intraday buying up to the support level 1.2695. However, the price may make another test of 1.2658, so it is better to enter buying with confirmation.

Alternative scenario:

if the price breaks the resistance level at 1.2806 and consolidates above, the uptrend will be resumed.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 156.96
• Prev. Close: 157.37
• % chg. over the last day: +0.26%

On Friday, the Japanese yen fell to a one-month low against the dollar after the Bank of Japan refrained from providing details of its plans to reduce bond purchases ahead of next month’s policy meeting, a dovish development. The slight yen strengthening came from comments from Bank of Japan Governor Ueda, who said the size of the bond purchase cut would be “substantial.” This could open the door for the currency to strengthen expectations ahead of the meeting itself.

Trading recommendations

• Support levels: 157.33,156.56
• Resistance levels: 157.52,157.98,158.29

From a technical point of view, the medium-term trend of the currency pair USD/JPY is bullish. The Japanese yen is starting to form a flat accumulation. Recent volume spikes indicate both the presence of a buyer and a seller, and are commensurate. Many will depend on whether the price can consolidate above 157.52 or below 157.33. A consolidation above will open the way to 157.98, and a consolidation below will open the way to 156.56.

Alternative scenario:

if the price breaks below the support level of 156.56, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2303
• Prev. Close: 2333
• % chg. over the last day: +1.30%

Despite the rise in the Dollar Index, gold also added to its value on Friday. Political uncertainty in France dragged down stock markets in Europe and the US on Friday, fuelling demand for precious metals. In addition, geopolitical tensions in the Middle East continue to support demand for precious metals. Several central banks (BoE, RBA, Norges Bank, PBoC) will hold interest rate meetings this week. No changes are expected, but any hints of rate cuts could support precious metals.

Trading recommendations

• Support levels: 2315,2300,2276
• Resistance levels: 2339,2370

From the point of view of technical analysis, the trend on the XAU/USD is downward. On Friday, the price again reached the 2339 resistance zone, where sellers reacted moderately. A broadly volatile sideways trend is being formed. Inside the day, there is observed pressure on sellers, so we should expect the price to decline to 2315. Then, we should evaluate the reaction. If buyers react at this level, the price will be pushed back to 2330. If there is no reaction, the price will drop to 2300.

Alternative scenario:

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