The EUR/USD currency pair

Technical indicators of the currency pair:

  • Prev. Open: 1.0821
  • Prev. Close: 1.0811
  • % chg. over the last day: -0.09%

According to preliminary data, the Eurozone economy grew by 0.3% faster than expected in the second quarter, driven by growth in France, Italy, and Spain. In contrast, Germany’s economy unexpectedly contracted, indicating continued weakness in the bloc’s largest economy. Meanwhile, Spain’s inflation fell more than expected to 2.8%, while Germany’s inflation unexpectedly rose to 2.3%. Investors continue to forecast another 25bp cut in ECB borrowing costs in September.

Trading recommendations

  • Support levels: 1.0772,1.0753,1.0727,1.0718
  • Resistance levels: 1.0827,1.0844,1.0869,1.0884,1.0905,1.0953.

The trend on the EUR/USD currency pair on the hourly time frame is bearish. Yesterday, the price tested the resistance level of 1.0827, and now there is a high probability of a decline to 1.0772. However, considering the divergence on the MACD indicator, the price may have risen to 1.0844 before. Sellers need to keep the price from consolidating above 1.0844, otherwise, buyers may take the initiative.

Alternative scenario:

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

News feed for: 2024.07.31

  • German Unemployment Rate (m/m) at 10:55 (GMT+3);
  • Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
  • US ADP Nonfarm Employment Change (m/m) at 15:15 (GMT+3);
  • US Pending Home Sales (m/m) at 17:00 (GMT+3);
  • US FOMC Statement (m/m) at 21:00 (GMT+3);
  • US Fed Interest Rate Decision (m/m) at 21:00 (GMT+3);
  • US Fed Press Conference (m/m) at 21:30 (GMT+3).

The GBP/USD currency pair

Technical indicators of the currency pair:

  • Prev. Open: 1.2858
  • Prev. Close: 1.2835
  • % chg. over the last day: -0.17%

Tomorrow, the Bank of England will publish its latest monetary policy report. The probability that the Bank of England will start cutting interest rates on Thursday in the financial markets is over 60%. The decision to leave rates unchanged was seen as “well balanced” at the June meeting, while annual inflation fell to 2% in May, which was in line with the central bank’s target. UK services inflation remained at a high level of 5.7%. If the UK bank rate is not cut this week, the market has already fully priced in the possibility of a cut at the September 19 meeting.

Trading recommendations

  • Support levels: 1.2824,1.2801,1.2761,1.2741,1.2701
  • Resistance levels: 1.2868,1.2909,1.2941,1.2976,1.3012,1.3025

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bearish. The price is testing the support level of 1.2824 again, but the buyers’ initiative is much weaker this time. Under such market conditions, intraday sales are worth looking for, with a target of 1.2802. It is important for sellers not to let the price consolidate above 1.2879. Otherwise, the probability of a reversal will increase sharply.

Alternative scenario:

if the price breaks through the resistance level at 1.2888 and consolidates above it, the uptrend will likely resume.

No news for today

The USD/JPY currency pair

Technical indicators of the currency pair:

  • Prev. Open: 153.95
  • Prev. Close: 152.69
  • % chg. over the last day: -0.82%

The BoJ slightly accelerated policy tightening relative to market expectations: the rate is raised from 0.1% to 0.25%, and the bond-buying program is halved from ¥6 trillion to ¥3 trillion. The BoJ will do this only by Q1 2026, which means it will take almost two years to cut, which should reduce its portfolio by 7-8% by Q1 2026. In addition, the BoJ added that if the outlook for economic activity and prices is realized, the discount rate will continue to rise, and the degree of monetary accommodation will be adjusted. The central bank is under constant pressure to raise rates amid risks that a weak yen could push up inflation.

Trading recommendations

  • Support levels: 151.63,150.80,149.65
  • Resistance levels: 155.85,157.18,157.83,158.33

From a technical point of view, the medium-term trend of the currency pair USD/JPY is bearish. The price has reached the support level of 151.63, where sellers covered some sales. With a high probability that the price will continue to decline intraday, looking for deals to sell at the support level of 150.80 makes sense. There are no optimal entry points for buying now.

Alternative scenario:

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

News feed for: 2024.07.31

  • Japan Industrial Production (m/m) at 02:50 (GMT+3);
  • Japan Retail Sales (m/m) at 02:50 (GMT+3);
  • Japan BoJ Monetary Policy Statement (m/m) at 07:00 (GMT+3);
  • Japan Interest Rate Decision (m/m) at 07:00 (GMT+3);
  • Japan Quarterly Outlook Report (m/m) at 07:00 (GMT+3).

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

  • Prev. Open: 2383
  • Prev. Close: 2411
  • % chg. over the last day: +1.17%

Gold rose to $2,420 an ounce on Wednesday, reversing earlier losses thanks to demand for the safe-haven currency amid fears of escalating conflict in the Middle East. Hamas leader Ismail Haniyeh was reportedly killed in Tehran, according to Iran’s paramilitary Revolutionary Guard, early Wednesday. This followed the Israeli government’s announcement that a top Hezbollah commander was killed in an airstrike in Beirut on Tuesday in response to an attack on the Golan Heights over the weekend.

Trading recommendations

  • Support levels: 2400,2391,2370,2351,2339,2319,2295,2276
  • Resistance levels: 2432,2451,2471,2500

From the point of view of technical analysis, the trend on the XAU/USD is bearish but close to a reversal. The price is approaching the priority change level of 2432. It is too late to buy here, as the price has deviated strongly from the moving averages. There is also no point in selling. Therefore, today, it is better to wait for the price reaction to one of the levels or look for entry points intraday. The level of 2432 is suitable for selling, but only with confirmation. It is best to consider the area below 2400 for buying, but also with confirmation.

Alternative scenario:

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

News feed for: 2024.07.31

  • US ADP Nonfarm Employment Change (m/m) at 15:15 (GMT+3);
  • US Pending Home Sales (m/m) at 17:00 (GMT+3);
  • US FOMC Statement (m/m) at 21:00 (GMT+3);
  • US Fed Interest Rate Decision (m/m) at 21:00 (GMT+3);
  • US Fed Press Conference (m/m) at 21:30 (GMT+3).

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.