The Analytical Overview of the Main Currency Pairs on 2024.06.25

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0683
• Prev. Close: 1.0732
• % chg. over the last day: +0.46%

The euro rose on Monday on hawkish comments from ECB executive board spokeswoman Schnabel, who said that the risk of a spike in inflation in the Eurozone remains high. The latest Ifo survey of German business activity showed an unexpected drop in June. On the inflation front, preliminary data for major economies, including France, Spain, and Italy, will be released this week. Spain’s annual inflation rate is expected to fall to 3.3% in June from 3.6% in May, while consumer prices in Italy are estimated to rise 0.2% from the previous month, the same as in May.

Trading recommendations

• Support levels: 1.0710,1.0693,1.0666,1.0590
• Resistance levels: 1.0742,1.0756,1.0773,1.0817

The trend on the EUR/USD currency pair on the hourly time frame is bearish. At the moment, the euro is correcting, with bullish pressure intraday. The price has reached the resistance level at 1.0742, where sellers can take the initiative. In this scenario, sell trades could be considered. If the price can consolidate above this level, we should expect a rise to 1.0756, where we can also look for sales, but with confirmation.

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: 1.2648
• Prev. Close: 1.2679
• % chg. over the last day: +0.25%

The British pound rose slightly to $1.265, remaining near a six-week low as investors assess monetary policy and the political future of the UK. The Bank of England (BoE) left interest rates unchanged last week, raising hopes for a rate cut in August following comments from policymakers. In addition, the country’s inflation report showed that core inflation fell back to the Bank of England’s 2% target. Upcoming GDP data will provide further insight into the state of the economy.

Trading recommendations

• Support levels: 1.2664,1.2623,1.2602,1.2566
• Resistance levels: 1.2693,1.2735,1.2806

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bearish. Currently, the price is correcting and has reached an important resistance zone above 1.2693. The sellers can actively enter here. Provided the initiative, we can consider selling with a profit target of 1.2664. If the price can consolidate above 1.2700, the way to 1.2735 will be opened.

Alternative scenario:

if the price breaks the resistance level at 1.2735 and consolidates above, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 159.73
• Prev. Close: 159.55
• % chg. over the last day: -0.11%

The yen recovered from the 8-week low against the dollar on Monday and showed a slight rise. Short covering appeared in the yen on Monday after comments from Japan’s top currency official, Deputy Finance Minister Kanda, fueled speculation that Japanese officials are once again close to intervening in the currency market to support the yen. Swaps estimate the odds of a 10bp BoJ rate hike at 57% for the July 31 meeting and 55% for the September 20 meeting.

Trading recommendations

• Support levels: 159.00,158.23,157.59,157.33,156.56
• Resistance levels: 160.20

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. Yesterday, the Japanese currency sharply strengthened to 159 on intervention comments but then quickly pulled back from that level. Volumes still indicate the presence of a major buyer. The price is looking to test the liquidity level above 160.20, where buyers are likely to start closing some of the previously opened positions, leading to a correction. It is best to use moving lines or intraday support levels to join the trend.

Alternative scenario:

if the price breaks below the support level of 157.59, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2320
• Prev. Close: 2334
• % chg. over the last day: +0.60%

The weakening of the dollar on Monday is bullish for metal prices. In addition, gold fund buying supported gold prices after data compiled by Bloomberg showed that exchange-traded funds (ETFs) added 231,696 troy ounces of gold to their holdings last Friday, the largest one-day increase in 3 months. For gold, this week’s focus is on core PCE data, the Fed’s preferred inflation gauge, consumer spending and income data, the third estimate of first-quarter GDP growth, and the trade balance.

Trading recommendations

• Support levels: 2318,2352,2307,2300
• Resistance levels: 2339,2351,2370,2387

From the point of view of technical analysis, the trend on the XAU/USD is still bearish. On Friday, the price fell impulsively to the 2318 support level, missing several support zones at once. Recent volumes indicate some selling coverage. Increasing geopolitical risk in the Middle East may support gold prices in the coming days, so the 2318 support level can be considered as a basis for upside with a target of 2339. A price consolidation below 2318 will open the way to 2307.

Alternative scenario:

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