The Analytical Overview of the Main Currency Pairs on 2024.06.20

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0735
• Prev. Close: 1.0742
• % chg. over the last day: +0.07%

Yesterday was a bank holiday in the US, so volatility remained low, given the lack of important economic events in the Eurozone. Investors’ attention is now directed towards the election campaign in France. Franco-German spreads indicate a notable risk premium applied to riskier, highly leveraged countries such as Italy and France, while investors invest in safer German bonds. A sell-off in peripheral country bonds is generally followed by a weaker euro.

Trading recommendations

• Support levels: 1.0730,1.0693,1.0666,1.0590
• Resistance levels: 1.0756,1.0773,1.0817

The trend on the EUR/USD currency pair on the hourly time frame is bearish. The price is trading near the resistance zone at 1.0756, but the sellers’ reaction is rather weak. At the same time, buyers have formed another demand zone below 1.0730, where you can look for buy trades provided the appropriate reaction. 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: 1.2697
• Prev. Close: 1.2715
• % chg. over the last day: +0.14%

As expected, UK inflation fell to the 2% target in May, and core inflation (excluding food and energy prices) fell to 3.5% from 3.9%, which aligns with estimates. However, service inflation fell less than expected, to 5.7%, from 5.9%, in line with expectations of 5.5%. The Bank of England recently said that meeting the inflation target would not lead to a cut in interest rates. The Central Bank is expected to keep its key rate at a 16-year high of 5.25% when it decides on monetary policy today. Most economists still believe there will be two rate cuts this year, with the first coming in August.

Trading recommendations

• Support levels: 1.2714,1.2697,1.2670,1,2658,1.2647,1.2608
• Resistance levels: 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 1.2735, where sellers showed a moderate reaction. Now, the price is trading at the level of moving averages in the support zone at 1.2714. However, since there is no buyers’ reaction here, the price will likely drop to 1.2697, where we can look for buying trades. 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: 157.80
• Prev. Close: 158.07
• % chg. over the last day: +0.17%

The Japanese yen weakened again to 158 per dollar on Thursday, risking another slide to 34-year lows as investors grew more cautious ahead of Friday’s release of Japanese inflation data for May, which could influence the Bank of Japan’s next policy move. Investors are also awaiting manufacturing and services PMI data for June. Earlier this week, BoJ Governor Kazuo Ueda told the Japanese parliament that he may raise interest rates again at the July meeting depending on upcoming economic data. Last week, the BoJ left rates unchanged as expected and said it would unveil a plan to wind down its bond-buying program at its next meeting in July.

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 is slowly losing ground against the dollar. The price is trying to test liquidity above 158.23. Consolidation above this level will open the way to 159.20. There are no optimal entry points for sell deals now.

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: 2330
• Prev. Close: 2328
• % chg. over the last day: -0.09%

Gold broke through the $2,330 per ounce mark on Thursday and rallied higher as sluggish US economic data reinforced expectations that the Federal Reserve may cut interest rates this year. Data released this week showed US retail sales barely rose, signaling a cooling in consumer sentiment. Investors will be watching the UK and Swiss Central Bank meetings today. Any moves towards rate cuts will have a positive impact on precious metals.

Trading recommendations

• Support levels: 2307,2300,2276
• Resistance levels: 2340,2370

From the point of view of technical analysis, the trend on the XAU/USD is bearish. However, the price managed to consolidate above the important resistance level of 2340, and if today there is no return beyond this level, the way to 2370 will be opened. Buying is not recommended as the price has deviated strongly from the moving averages, and the MACD indicates a divergence. Selling can be considered only if the price impulsively returns and consolidates below 2340.

Alternative scenario:

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