The Analytical Overview of the Main Currency Pairs on 2024.07.12

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0829
• Prev. Close: 1.0868
• % chg. over the last day: +0.36%

The euro rose to $1.088, hitting a five-week high, mainly due to the dollar’s weakening after the release of inflation data that confirmed estimates of a Federal Reserve rate cut in September. The US core inflation fell to 3% in June, lower than the expected 3.1%, with a monthly decline of 0.1% versus an expected increase. In Europe, German inflation in June fell to 2.5%, which confirmed the previous data and indicated the possibility of another rate cut by the European Central Bank in September.

Trading recommendations

• Support levels: 1.0842,1.0807,1.0753,1.0727,1.0718,1.0685,1.0666,1.0590
• Resistance levels: 1.0899

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The price has tested the 1.0899 resistance zone, where profit-taking has started. Volumes also indicate selling. Given the MACD divergence, the price may be corrected more deeply, and given the dollar’s weakness, the euro may continue to grow from the moving average lines. Inside the day, we should look for buy deals from the EMA or the 1.0842 support level, but with confirmation. There are no optimal entry points for selling.

Alternative scenario:

if the price breaks the support level of 1.0806 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2846
• Prev. Close: 1.2913
• % chg. over the last day: +0.52%

The British pound soared to a one-year high thanks to a double barrage of positive factors. The US dollar weakened sharply after a US inflation report showed that annual inflation slowed more than expected, prompting bets on a Federal Reserve rate cut in September. Meanwhile, stronger-than-expected UK GDP data reduced the odds of a rate cut in August, lending further support to the pound. In May, the UK economy grew by 0.4%, which exceeded market expectations, expecting an increase of 0.2%.

Trading recommendations

• Support levels: 1.2878,1.2824,1.2801,1.2761,1.2741,1.2701,1.2681,1.2663
• Resistance levels: 1.2980

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bullish. The price is steadily rising, breaking through all the counter-resistance levels. The MACD indicator is positive, but there are the first signs of divergence. Inside the day, we should look for buying from the moving lines to test the resistance level of 1.2980. There are no optimal entry points for selling now.

Alternative scenario:

if the price breaks the support level of 1.2776 and consolidates below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 161.62
• Prev. Close: 158.79
• % chg. over the last day: -1.78%

The yen jumped to a 3-week high against the dollar on Thursday after a weaker-than-expected US inflation report drove down T-note yields and triggered short covering in the yen. The yen’s rise accelerated after TV Asahi reported that the Japanese government and the Bank of Japan intervened in the foreign exchange market on Thursday to support the yen. Nikkei also reported that the Bank of Japan tested bank rates on the euro-yen cross rate on Friday, raising fears of further intervention. Meanwhile, chief currency diplomat Masato Kanda declined to officially confirm whether the government was involved in the yen’s appreciation.

Trading recommendations

• Support levels: 157.59,157.33,156.56
• Resistance levels: 161.81,162.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY has changed to a downtrend. The price has confidently consolidated below the priority change level and reached the support zone at 157.52, where active price buying started. Most likely, it was the closing of earlier open sales by large participants. All conditions for further price decline remain. For sell, it is best to use EMA lines, but only with confirmation. There are no optimal entry points for buying now.

Alternative scenario:

if the price breaks through and consolidates above the resistance level of 161.78, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2372
• Prev. Close: 2415
• % chg. over the last day: +1.81%

Precious metals prices rose moderately on Thursday, with gold reaching a 7-week high and silver reaching a 6-week high. The dollar’s decline to a 1-month low on Thursday supported the metals. A weaker-than-expected US CPI report on Thursday led to a decline in bond yields and reinforced expectations of a Fed interest rate cut, which is favorable for precious metals. The dollar sustained losses on Thursday on dovish comments from San Francisco Fed Chair Daly, who said recent economic data “warrant some policy adjustment,” indicating she favors lower interest rates.

Trading recommendations

• Support levels: 2395,2370,2351,2339,2319,2295,2276
• Resistance levels: 2415,2432

From the point of view of technical analysis, the trend on the XAU/USD is bullish. Yesterday, the price reached the 2415 resistance level, where sellers entered the game. Now, a technical correction is taking place. All because fundamental factors are starting to be in favor of further growth of precious metals, intraday and medium-term we should focus on buying. The support level of 2395 is a good fit, but only with confirmation in the form of buyers’ reactions. There are no optimal entry points for selling right now.

Alternative scenario:

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