The Analytical Overview of the Main Currency Pairs on 2024.07.26

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.083
• Prev. Close: 1.0845
• % chg. over the last day: +0.05%

US GDP grew at an annualized rate of 2.8% in the second quarter, well above market expectations of 2% and accelerating growth from 1.4% in the previous period. In addition, core inflation remained well above the Fed’s target level, limiting the extent of rate cuts that may be required in the upcoming easing cycle. This is a strengthening factor for the US dollar, which is negatively impacting the single European currency. Today, the PCE Price Index report will be published in the US. The growth of the index may put additional pressure on the euro.

Trading recommendations

• Support levels: 1.0840,1.0827,1.0807,1.0753,1.0727,1.0718
• Resistance levels: 1.0869,1.0884,1.0905,1.0953

The trend on the EUR/USD currency pair on the hourly time frame has changed to a downtrend. Yesterday, the price bounced from the resistance level of 1.0869, where sellers took the initiative. The MACD indicator is in the positive zone, intraday there is slight pressure of buyers within the correction. Under these market conditions, it is best to consider the 1.0869 resistance level for selling, but with confirmation. The minimum profit target is 1.0840. There are no optimal entry points for buying right now.

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: 1.2898
• Prev. Close: 1.2850
• % chg. over the last day: -0.37%

Economists 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 remained at 5.7%, above the Bank of England’s prognosis of 5.1%. Odds of an interest rate cut by the Central Bank in August fell to around 33% from nearly 49%.

Trading recommendations

• Support levels: 1.2824,1.2801,1.2761,1.2741,1.2701
• Resistance levels: 1.2909,1.2941,1.2976,1.3012,1.30255

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bearish. The price is trading below the moving averages, with the dynamic lines acting as resistance and preventing the price from closing higher. The MACD indicator is negative, but there are signs of divergence. Under these market conditions, selling can be considered from the EMA lines with a target to the support level of 1.2824. Sellers need to keep the price within the narrowing wedge. There are no optimal entry points for buying right now.

Alternative scenario:

if the price breaks through the resistance level at 1.2941 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 153.83
• Prev. Close: 153.93
• % chg. over the last day: +0.06%

The Japanese yen rose to 152 per dollar, reaching the highest level in the last 12 weeks, as market participants abandoned carry trades and shorts ahead of the Bank of Japan’s policy meeting next week. Market odds for a BOJ rate hike at next week’s meeting rose to 69% from 38%. The currency also benefited from safe-haven buying as risk assets such as growth stocks and commodities sold off amid disappointing corporate earnings and a weakening global economic outlook.

Trading recommendations

• Support levels: 153.20,151.45,150.80,149.65
• Resistance levels: 153.36,155.84,156.86,1157.83,158.33

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. Yesterday, below the level of 153.20, buyers showed initiative. This is evidenced by the surge in volumes and the price reaction to these volumes. At the same time, a demand zone was formed, which can now act as a support area. The MACD indicator became positive. Intraday, we can look for buying from the support level of 153.20, but only with confirmation that the price will close higher after the test. There are no optimal entry points for selling now.

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: 2398
• Prev. Close: 2364
• % chg. over the last day: -1.44%

Gold continued to decline on Thursday and settled at $2,355 per ounce, its lowest in two weeks, as a batch of economic data released by the BEA supported the assumption that the US economy remains resilient to the current restrictive monetary conditions. Markets are still fully pricing in a September rate cut by the US central bank, followed by two more cuts expected before the end of the year.

Trading recommendations

• Support levels: 2400,2391,2370,2351,2339,2319,2295,2276
• Resistance levels: 2380,2401,2434,2451,2471,2500

From the point of view of technical analysis, the trend on the XAU/USD is bearish. The fall is starting to slow down, and there is a high probability that gold will start to fall flat in the range of 2355–2380. The MACD indicator is in the negative zone, but the momentum is behind the buyers, which given the divergence, increases the probability of price growth. Under such market conditions, intraday buying up to 2380 can be considered. Going below 2360 is unacceptable for buyers. For sell deals, we can consider the resistance level of 2380, but only with confirmation in the form of a selling initiative.

Alternative scenario:

if the price breaks and consolidates above the resistance level of 2432, the uptrend will likely resume.