The Analytical Overview of the Main Currency Pairs on 2024.06.19

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0732
• Prev. Close: 1.0739
• % chg. over the last day: +0.07%

The euro initially declined on Tuesday on a weaker-than-expected German ZEW Economic Growth Survey. The German ZEW’s Economic Growth Expectations Index for June rose 0.4 to a 2-year high of 47.5, which was weaker than expectations of 50.0. But by the end of the day, the euro recovered slightly on hawkish comments from ECB Vice President Guindos, who said that the ECB’s economic estimates for September would be the next occasion for the ECB to discuss interest rate cuts. Swaps discount the odds of an ECB rate cut by 25 bps at 6% for the 18 July meeting and 61% for the 12 September meeting.

Trading recommendations

• Support levels: 1.0730,1.0693,1.0666,1.0590
• Resistance levels: 1.0744,1.0816

The trend on the EUR/USD currency pair on the hourly time frame is bearish. Yesterday, the price reached the resistance zone above 1.0744, but the sellers reacted moderately. At the same time, buyers have formed another demand zone below 1.0730, where we can look for buy trades, provided the reaction of buyers. If the zone below 1.0730 fails to hold, the price will go to 1.0693.

Alternative scenario:

if the price breaks the resistance level of 1.0816 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2700
• Prev. Close: 1.2707
• % chg. over the last day: +0.06%

Inflation data will be released in the UK today. Economists predict consumer prices to fall from 2.3% to 2.0% y/y. and core inflation (excluding food and energy prices) to fall from 3.9% to 3.5%. y/y. Such data before tomorrow’s Bank of England (BoE) meeting may put pressure on the British currency.

Trading recommendations

• Support levels: 1.2670,1,2658,1.2647,1.2608
• Resistance levels: 1.2714,1.2735,1.2806

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bearish. Yesterday, the price reached the resistance zone above 1.2714. The reaction of sellers is weak and buyers are forming a flat accumulation in front of the level. There is a high probability of a sharp test of the resistance level at 1.2735 on the publication of inflation news. However, the price may also decline from 1.2714. Opening positions are best considered on intraday time frames.

Alternative scenario:

if the price breaks the resistance level at 1.2806 and consolidates above, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 157.70
• Prev. Close: 157.84
• % chg. over the last day: +0.09%

Some BoJ board members believe that monetary policy responses will be required if the outlook for economic activity and prices changes due to the yen, according to minutes of the April meeting. “…If exchange rate movements affect firms’ medium- and long-term inflation expectations and corporate behavior, this will raise the risk of price effects, making a policy response necessary,” the minutes said.

Trading recommendations

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

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The Japanese yen forms a flat accumulation in the range of 157.52–157.98. The price will likely remain in this range until Friday’s meeting of the Bank of Japan. Yesterday, sellers showed a reaction from the resistance zone 157.58–158.29, and now there is a high probability of a decline to 157.52. Next, the price reaction should be evaluated. If buyers do not react to the support level at 157.52, it may accelerate the quotes’ decline.

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: 2320
• Prev. Close: 2329
• % chg. over the last day: +0.38%

Gold held near $2,330 per ounce on Wednesday as weaker-than-expected US retail sales data reinforced expectations of a rate cut by the Federal Reserve soon. US retail sales rose by 0.1% in May after a revised 0.2% decline in April, falling short of the 0.2% estimate and signaling a cooling in consumer sentiment. Meanwhile, New York Fed President John Williams said on Tuesday that interest rates will be gradually lowered, but did not specify when the Central Bank would start easing monetary policy.

Trading recommendations

• Support levels: 2307,2300,2276
• Resistance levels: 2339,2370

From the point of view of technical analysis, the trend on the XAU/USD is bearish. The price is forming a wide symmetrical triangle. With such a formation, the accumulated liquidity narrows, which eventually leads to a sharp impulsive move. Volumes indicate that buyers dominate inside the consolidation. Under such market conditions, one can look for selling from the upper boundary of the triangle intraday. There are no optimal entry points for buying right now.

Alternative scenario:

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