The Analytical Overview of the Main Currency Pairs on 2024.07.08

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0811
• Prev. Close: 1.0839
• % chg. over the last day: +0.26%

On Friday, the euro strengthened to $1.082, the highest in three weeks, thanks to the weakening of the dollar after the release of US employment data, which pointed to a slowdown in job growth and supported expectations of a Fed rate cut in September. In Europe, policymakers are concerned about inflation dynamics despite recent rate cuts, fearing a prolonged deviation from the 2% target, according to the meeting minutes. The ECB hinted at the possibility of a future rate cut but left the timing uncertain.

Trading recommendations

• Support levels: 1.0806,1.0753,1.0727,1.0718,1.0685,1.0666,1.0590
• Resistance levels: 1.0837

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price is trading above the moving averages. The MACD indicator indicates bullish pressure, but there are the first signs of divergence. At the same time, recent volume spikes indicate partial closing of long positions. It is appropriate to look for today’s intraday selling. The demand zone below 1.0806 can be considered for buying, but only with confirmation. If the price consolidates below 1.0806, we may see a sell-off to 1.0772.

Alternative scenario:

if the price breaks the support level of 1.0710 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2756
• Prev. Close: 1.2813
• % chg. over the last day: +0.45%

The British pound rose to $1.28 on Friday, hitting its highest level in more than three weeks, as the center-left Labor Party won a parliamentary election and was expected to win a majority, ousting Prime Minister Sunak’s Conservative Party after 14 years in power. Labor stressed that economic stability was a priority and pledged to adhere to strict spending rules. Some analysts believe that this political shift may favor the British pound.

Trading recommendations

• Support levels: 1.2789,1.2741,1.2701,1.2681,1.2663,1.2653,1.2623,1.2602
• Resistance levels: 1.2815

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bullish. Similar to the Eurodollar, the price is trading above the moving averages. Recent volume spikes indicate partial closing of long positions. The MACD indicator is positive, with the first signs of divergence. Today intraday, it is best to look for selling with a target up to 1.2789. There are no optimal entry points for buying right now.

Alternative scenario:

if the price breaks the support level of 1.2615 and consolidates below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 161.19
• Prev. Close: 160.74
• % chg. over the last day: -0.28%

The yen rose to a 1-week high against the dollar on Friday. The yen received support from Japan’s economic news report on Friday, which showed that the May CI Index of leading indicators rose more than expected. The yen’s rise accelerated after T-note yields fell on Friday’s US June payrolls report. Swaps estimate the odds of a 10 bp rate hike by the Bank of Japan (BoJ) at 51% at the July 31 meeting and 34% at the September 20 meeting.

Trading recommendations

• Support levels: 160.26,159.00,158.23,157.59,157.33,156.56
• Resistance levels: 160.80,161.13,161.81,162.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is still bullish, but the price tested today the priority change level where the buyers came into play. The price canceled the last sell-side liquidity void area for selling, so today intraday, it is worth looking for buying with a target of 160.80 or even 161.13. There are no optimal entry points for selling.

Alternative scenario:

if the price breaks below the support level of 160.26, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2357
• Prev. Close: 2391
• % chg. over the last day: +1.44%

Precious metals prices rose on Friday, with gold reaching a 6-week high and silver reaching a 5-week high. The decline in the Dollar Index on Friday to a 3-week low was a favorable factor for metal prices. Precious metals are also supported by Friday’s decline in global bond yields. In addition, Friday’s US payrolls report showed that the unemployment rate unexpectedly rose to a 2-year high, and average hourly earnings in June fell to a 3-year low, which is dovish for the Fed’s policy and a positive factor for precious metals.

Trading recommendations

• Support levels: 2370,2343,2339,2319,2295,2276
• Resistance levels: 2395

From the point of view of technical analysis, the trend on the XAU/USD is bullish. The price is trading above the moving averages. The MACD indicator is strictly bullish, with no signs of reversal. There is a high probability of further price growth up to the resistance level of 2395. If sellers react to 2395, the price may fall sharply to 2370.

Alternative scenario:

if the price breaks below the 2351 support level, the downtrend will likely resume.