The Analytical Overview of the Main Currency Pairs on 2024.07.24

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0890
• Prev. Close: 1.0854
• % chg. over the last day: -0.33%

The euro continues to decline amid expectations of a weaker EUR/USD interest rate differential after ECB President Lagarde warned last week of downside risks for the Eurozone economy. The preliminary Eurozone Consumer Confidence Index for July rose by 1.0 points to negative 13. ECB Vice-President Luis de Guindos said in an interview published on Tuesday that the ECB will have a much more informed monetary policy decision at its September meeting than in July.

Trading recommendations

• Support levels: 1.0843,1.0827,1.0807,1.0753,1.0727,1.0718
• Resistance levels: 1.0884,1.0905,1.0953

The trend on the EUR/USD currency pair on the hourly time frame has changed to a downtrend. The price has consolidated below the priority change level and is trading below the moving averages. Currently, the price has reached the support level of 1.0843, but the reaction of buyers is weak. The MACD indicator is in the negative zone, but there are the first signs of divergence. Under these market conditions, it is best to consider the support level of 1.0843 or 1.0827 for buying, but with intraday confirmation and short targets. There are no optimal entry points for selling right now, as the price has deviated strongly from the midlines.

Alternative scenario:

if the price breaks the resistance level at 1.0897 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2930
• Prev. Close: 1.2906
• % chg. over the last day: -0.18%

In the UK, investors are now focusing on the upcoming PMIs, which are expected to show an acceleration in manufacturing and service sector growth in July, as well as the CBI Factory Orders Index, which is expected to hit a yearly high. This could provide fuel for growth in the British currency, which has been under pressure in recent days.

Trading recommendations

• Support levels: 1.2878,1.2824,1.2801,1.2761,1.2741,1.2701
• Resistance levels: 1.2898,1.2976,1.3012,1.3025

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bearish. The price has consolidated below the support level of 1.2898. The MACD indicator is negative, but there are signs of divergence. Under such market conditions, if the price manages to consolidate above 1.2898, buyers can count on growth. But if the price fails to rise above 1.2898 during the day, the price will likely continue to decline to 1.2824.

Alternative scenario:

if the price breaks through the resistance level at 1.2984 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 157.00
• Prev. Close: 155.54
• % chg. over the last day: -0.94%

On Wednesday, the Japanese yen rose to 154.5 per dollar, rising for the third consecutive session amid growing expectations that the Bank of Japan will raise interest rates again at its meeting next week. Swaps put the odds of a 10bp BoJ rate hike at 45% for the July 31 meeting and 100% for the September 20 meeting. Prime Minister Fumio Kishida said yesterday that normalizing the Central Bank’s monetary policy will help Japan’s transition to a growth-oriented economy.

Trading recommendations

• Support levels: 154.60,153.36
• Resistance levels: 155.84,156.86,1157.83,158.33,159.43,160.20,161.81,162.00

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. Sellers took the initiative from 155.84. The price is once again trading below the moving averages. The MACD indicator is in the negative zone, but there are the first signs of divergence. The price has now reached the support level of 154.60, and buyers are trying to show a reaction. Intraday buying can be looked for here, with a target up to 155.50. Selling should be considered if the price consolidates below 154.60. In this case, there is a high probability of a decline to 153.36.

Alternative scenario:

if the price breaks through and consolidates above the resistance level of 157.18, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2397
• Prev. Close: 2409
• % chg. over the last day: +0.50%

Gold stabilized near the $2,400 per ounce mark on Tuesday after declining for four consecutive sessions as traders focused on upcoming US economic data that should reinforce expectations of a rate cut by the Federal Reserve. The focus is on the preliminary estimate of second-quarter GDP growth, personal spending and income, and the June PCE Price Index, which the Fed prefers to use to measure inflation. The consensus on Friday is for the June PCE deflator to fall to 2.4% y/y from May’s 2.6% and for the June core PCE deflator to fall to 2.5% y/y from May’s 2.6%. This could put pressure on the dollar and give a boost to precious metals.

Trading recommendations

• Support levels: 2400,2391,2370,2351,2339,2319,2295,2276
• Resistance levels: 2434,2451,2471,2500

From the point of view of technical analysis, the trend on the XAU/USD is bearish. However, the price managed to consolidate above the 2400 level yesterday, with buyers forming an additional support zone below this level. The MACD indicator turned positive and indicates buying pressure intraday. Under these market conditions, intraday buying from the moving average lines can be sought with a target of 2434. There are no optimal entry points for selling now as there is no initiative from sellers, and there is a large space to the nearest resistance level.

Alternative scenario:

if the price breaks and consolidates above the resistance level of 2470, the uptrend will likely resume.