The Analytical Overview of the Main Currency Pairs on 2024.07.19

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0938
• Prev. Close: 1.0896
• % chg. over the last day: -0.38%

As expected, the ECB left the key interest rate unchanged at its July meeting, which contrasts with the significant rate cut last month and reflects the ECB policymakers’ uncertainty that Eurozone inflation is declining at a fast enough pace. In addition, ECB President Lagarde refrained from indicating a stance for the upcoming meetings and noted that the September decision will be an open-ended one. This stance, expectedly, hurt the euro. Nevertheless, markets continue to expect the ECB to resume interest rate cuts at the upcoming meeting.

Trading recommendations

• Support levels: 1.0886,1.0875,1.0859,1.0807,1.0753,1.0727,1.0718
• Resistance levels: 1.0906,1.0953

The trend on the EUR/USD currency pair on the hourly time frame is bullish. The euro price corrected to the support level of 1.0886 and dropped below the moving averages. The MACD indicator is in the negative zone. It is very important for buyers not to let the price fall below 1.0886, as it is very likely to lead to a trend change in the current time frame. For buy deals, it is best to consider the support level of 1.0886, but with confirmation intraday. For selling, the resistance levels of 1.0905 and 1.0934 would be appropriate

Alternative scenario:

if the price breaks the support level of 1.0871 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3004
• Prev. Close: 1.2944
• % chg. over the last day: -0.46%

Traders lowered their expectations for a rate cut by the Bank of England in August after the release of the latest economic data. Inflation in June came to a halt at 2% compared to estimates of a slowdown to 1.9%, while services inflation also remained flat at 5.7%, above the Bank of England’s prediction of 5.1%. The unemployment rate remained at a 2021 high of 4.4%. Odds of an interest rate cut by the central bank in August fell to around 33% from nearly 49% before the CPI release.

Trading recommendations

• Support levels: 1.2937,1.2878,1.2824,1.2801,1.2761,1.2741,1.2701
• Resistance levels: 1.2976,1.3025

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bullish. The price has declined to the priority change level. Buyers are trying to defend their positions, but the latest volumes indicate the presence of large sales. It is very important to assess the price reaction to this level. If buyers can push the price away from 1.2926–1.2937, we can confidently consider buying up to 1.2976. There are no optimal entry points for selling right now.

Alternative scenario:

if the price breaks the support level of 1.2937 and consolidates below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 156.15
• Prev. Close: 157.35
• % chg. over the last day: +0.76%

Japan’s inflation rate remained unchanged at 2.8% in June, while the core inflation rate rose to 2.6% from 2.5%. Although the figure was slightly below market estimates of 2.7%, the latest core inflation data reinforced market expectations that the Bank of Japan may raise interest rates from current near-zero levels at its July 30–31 meeting. Japan’s Digital Minister Kono Taro also said this week that the Central Bank needs to raise rates again in July to support the yen.

Trading recommendations

• Support levels: 156.61,155.84,154.60
• Resistance levels: 158.25,159.43,160.20,161.81,162.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The yen is growing within the correctional movement and seeks to test the zone near the resistance level of 158.25. A move above 158.61 will change the trend in this time frame. Recent volume spikes indicate the presence of large buyers. Under such market conditions, we should look for selling from the resistance level at 158.25, but with confirmation. There are no optimal entry points for buying right now.

Alternative scenario:

if the price breaks through and consolidates above the resistance level of 158.61, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2459
• Prev. Close: 2445
• % chg. over the last day: -0.57%

Gold fell to $2,420 per ounce on Friday, retreating from record highs, as the dollar rose on strong economic data from the US, although the Federal Reserve’s interest rate cut bets remained unchanged. The dollar was supported by stronger-than-expected manufacturing growth figures. Nevertheless, the bullion price rose for the fourth week in a row due to growing optimism that the US Federal Reserve will cut rates as early as September. The probability of a Fed rate cut at the September meeting is 98%, according to CME’s FedWatch Tool.

Trading recommendations

• Support levels: 2426,2408,2395,2370,2351,2339,2319,2295,2276
• Resistance levels: 2452,2471,2500

From the point of view of technical analysis, the trend on the XAU/USD is bullish. Yesterday, sellers unexpectedly took the initiative from the resistance level 2471, after which the price rushed sharply downward and reached the support level 2526. The reaction of buyers is still weak, so it is not worth buying from this level without confirmation. If the price consolidates below 2526, the price will rush to 2408. Both of these levels can be considered for buying, if there is a buyer’s reaction. There are no optimal entry points for selling.

Alternative scenario:

if the price breaks below the 2401 support level, the downtrend will likely resume.