The Analytical Overview of the Main Currency Pairs on 2024.07.09

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0806
• Prev. Close: 1.0824
• % chg. over the last day: +0.17%

On Monday, the euro initially moved higher thanks to a reduction in political tensions in France. Sunday’s parliamentary elections in France left the parliament divided and without a clear majority, making any extreme policy measures less likely. In addition, hawkish comments from ECB Governing Council representative Muller boosted the euro when he stated that the ECB cannot rush to cut interest rates as wage growth remains strong. Swaps discount the odds of a 25bp ECB rate cut by 5% for the July 18 meeting and 72% for the September 12 meeting.

Trading recommendations

• Support levels: 1.0806,1.0753,1.0727,1.0718,1.0685,1.0666,1.0590
• Resistance levels: 1.0837,1.0862

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 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 selling today intraday. The demand zone below 1.0806 can be considered for buy deals, but only with confirmation. If the price consolidates above 1.0837, the way to 1.0862 will be opened for the price.

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: 1.2795
• Prev. Close: 1.2805
• % chg. over the last day: +0.08%

The British pound sterling exchange rate has surpassed $1.281, nearing a four-month-high, as the currency continues to strengthen following the Labor Party’s election victory. The center-left party won a majority in parliament, ending the Conservatives’ 14-year rule. Labor won 411 seats in the House of Commons, well above the 325 seats needed for a majority, while the Conservatives won 121 seats. Analysts estimate a positive impact on sterling, equities, and overall investment in the UK.

Trading recommendations

• Support levels: 1.2789,1.2761,1.2741,1.2701,1.2681,1.2663,1.2653,1.2623
• Resistance levels: 1.2815,1.2845

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bullish. The price has corrected and is trading at the levels of the moving averages, which indicates that the price is balanced. Recent volume spikes indicate partial closing of long positions. The MACD indicator has become neutral, with the first signs of divergence. Today intraday it is best to look for selling with a target of 1.2789. A price move below 1.2789 will open the way to 1.2761.

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: 160.67
• Prev. Close: 160.80
• % chg. over the last day: +0.08%

The yen initially went up on Monday as signs of strong wage growth in Japan are hawkish for BOJ policy and support the yen after Japanese workers’ cash earnings for May rose the most in 11 months. However, the divergence in bond yields is likely to weigh on the yen, as Japanese government bond yields are significantly lower than other G-7 countries.

Trading recommendations

• Support levels: 160.72,160.26,159.00,158.23,157.59,157.33,156.56
• Resistance levels: 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. Currently, the price is trading in a wide sideways range with boundaries of 160.72–161.13. Buyers are prevailing intraday. The MACD is also indicating buying pressure. Therefore, it is best to look for buying from moving average levels or from the demand zone below 160.72.

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: 2388
• Prev. Close: 2359
• % chg. over the last day: -1.22%

On Monday, the demand for precious metals as a “safe-haven” decreased amid lower political risks in France after Sunday’s parliamentary elections in France resulted in a “hung” parliament, which reduced the likelihood of implementation of extreme policies of the far-right party. Reduction of gold purchases by central banks is another negative factor for prices after the People’s Bank of China (PBoC) did not add gold to its reserves for the second month in a row in June

Trading recommendations

• Support levels: 2360,2351,2339,2319,2295,2276
• Resistance levels: 2370,2395

From the point of view of technical analysis, the trend on the XAU/USD is bullish. Yesterday, the price declined sharply and reached the priority change level where buyers started to defend their positions, after which the price bounced. Recent volumes indicate sellers’ pressure. However, the buyers left behind a demand zone near the support level of 2360. This level should be held for growth. If the price consolidates below 2360, there will be a change of priority with a high probability.

Alternative scenario:

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