The Analytical Overview of the Main Currency Pairs on 2024.06.28

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0679
• Prev. Close: 1.0704
• % chg. over the last day: +0.23%

The latest economic data showed decreased consumer and business morale in Germany and France. Preliminary data for major economies, including France, Spain, and Italy, will be released today. 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 expected to rise 0.2% from the previous month. Also, the PCE Price Index report, the favorite inflation gauge for the US Fed, will be released today. A further decline in this index could have a negative impact on the US dollar.

Trading recommendations

• Support levels: 1.0685,1.0666,1.0590
• Resistance levels: 1.0718,1.0742,1.0756,1.0773,1.0817

The trend on the EUR/USD currency pair on the hourly time frame is bearish. The price is forming a flat accumulation with boundaries of 1.0685–1.0718. At the same time, this sideway is inside a wider flat corridor with boundaries of 1.0666–1.0742. According to the rules of the accumulation phase, buying should always be sought from the lower boundary and selling from the upper one. The minimum profit target is the opposite border. Under such market conditions, buy deals should be sought from the support level of 1.0685 or, in case of a price decrease, the support level of 1.0666. A price drop below 1.0666 will trigger an impulsive sell-off wave to 1.0590.

Alternative scenario:

if the price breaks the resistance level of 1.0759 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2617
• Prev. Close: 1.2638
• % chg. over the last day: +0.17%

The Bank of England warned Thursday that policy uncertainty surrounding the upcoming French and US elections raises the risk of market volatility and other economic fallout. Britons will go to the polls on July 4, and the Bank of England is refraining from commenting specifically on those elections to avoid political bias. The Financial Stability Report states, “policy uncertainty associated with the upcoming global elections has increased.” This could make the global economic outlook less certain and lead to volatility in financial markets.

Trading recommendations

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

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bearish. The price has reached an important support zone below 1.2623, where the buyers have entered the game. Recent volume spikes confirm this. The MACD indicator is negative, but the momentum is bullish, with divergence present. Under such market conditions intraday, we can again look for buying with a target of 1.2664. A price move below 1.2623 will open the way to 1.2602.

Alternative scenario:

if the price breaks the resistance level at 1.2701 and consolidates above, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 160.76
• Prev. Close: 160.72
• % chg. over the last day: -0.02%

The Japanese yen weakened to 161 per dollar, breaking this level for the first time since  1986, after the Ministry of Finance appointed Atsushi Mimura as Japan’s chief currency diplomat, replacing Masato Kandu. The appointment came amid a sharp fall in the yen, which has put constant pressure on Japanese authorities to defend their currency. Still, they have so far refused to intervene in currency markets after doing so in late April. Earlier this week, Finance Minister Shun’ichi Suzuki warned that sudden, unilateral yen movements are undesirable and that the authorities will take appropriate action when necessary.

Trading recommendations

• Support levels: 160.80,160.00,159.00,158.23,157.59,157.33,156.56
• Resistance levels: 161.50,162.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. Volumes still indicate the presence of a big buyer, but there are the first fixations of profits. The price consolidated above the resistance at 160.80, and now this level has mirrored support. The presence of divergence on MACD indicates a correction, but there is no confirmation from sellers yet. For take profits we should consider round levels, such as 161.50, 162, etc. For sell deals we can consider 160.80, provided the price will consolidate below it again. Also, do not forget that the Bank of Japan may intervene at any time to support the rate.

Alternative scenario:

if the price breaks below the support level of 159.28, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2299
• Prev. Close: 2327
• % chg. over the last day: +1.21%

Gold declined to around $2,320 per ounce on Friday after rising more than 1% in the previous session. Investors turned more cautious ahead of key US inflation data to be released later in the day in search of clues on the Federal Reserve’s policy outlook. The Fed’s preferred measure of inflation, the annualized PCE inflation rate, is expected to fall from 2.7% to 2.6%, while core PCE inflation is expected to slow from 2.8% to 2.6%. Meanwhile, yesterday’s data pointed to weakening economic momentum in the US, with the final GDP figure falling significantly and jobless claims rising to the highest level since late 2021, suggesting a softening labor market.

Trading recommendations

• Support levels: 2309,2295,2276
• Resistance levels: 2330,2339,2351,2370,2387

From the point of view of technical analysis, the trend on the XAU/USD is still bearish. On the senior time frames, gold forms a flat accumulation. There is buying pressure inside the day, and the recent volume spikes confirm it. The price is now at the resistance zone of 2330, where it is important to assess the actions of market participants. A breakout of this level will open the way to 2339. If the price fails to break through 2330 and sellers take the initiative, we should expect a sharp decline to 2309.

Alternative scenario:

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