The Analytical Overview of the Main Currency Pairs on 2024.08.02

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0824
• Prev. Close: 1.0789
• % chg. over the last day: -0.32%

The euro fell below $1.079, hitting one-month lows, as traders continue to believe that the ECB will cut rates twice this year, with the next cut likely to come in September. Meanwhile, the Fed soon hinted at a rate cut, with traders betting on a September move, while the Bank of England also began its easing cycle yesterday. Non-Farm Payrolls US labor market data will be released today in the United States. Weaker-than-expected employment data may improve sentiment on Wall Street, but it will hurt the dollar as it will reinforce aggressive bets for a rate cut.

Trading recommendations

• Support levels: 1.0772,1.0753,1.0727,1.0718
• Resistance levels: 1.0828,1.0844,1.0869,1.0884,1.0905,1.0953

The trend on the EUR/USD currency pair in the hourly time frame is bearish. Sellers continue to press intraday, seeking to test liquidity below the support level of 1.0772. A divergence is forming on the MACD indicator. Under such market conditions, intraday sell deals can be looked for with a target of 1.0772. Also, selling can be considered from 1.0828 if the price on the news makes a spike. Buying can be considered from 1.0772 only if buyers take the initiative.

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: 1.2854
• Prev. Close: 1.2738
• % chg. over the last day: -0.91%

The British pound weakened to below $1.28, a low not seen in about a month, after the Bank of England cut the interest rate by 25 bps to 5%, which matched most investors’ expectations, although the decision was mixed. Traders have raised bets on a rate cut before the end of the year and expect another 35bp cut, with the next move likely to come in November. Nevertheless, BoE Governor Bailey cautioned against cutting rates “too quickly or too significantly” as concerns remain over persistent domestic inflationary pressures.

Trading recommendations

• Support levels: 1.2717,1.2654
• Resistance levels: 1.2824,1.2868,1.2909,1.2941,1.2976,1.3012,1.3025

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bearish. The price broke through the support level of 1.2824 and dropped to 1.2717. Buyers’ reaction to the level is weak. Under such market conditions, the price may make one more decline before the correction starts. Buying should be looked for from 1.2717 provided buyers take the initiative. A breakdown of 1.2717 will open the way for the price to 1.2654.

Alternative scenario:

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

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 149.79
• Prev. Close: 149.35
• % chg. over the last day: -0.29%

The Japanese yen traded near 149.5 per dollar, near its highest levels since mid-March, as concerns about a slowdown in the US economy spurred safe-haven buying in the currency. The yen also rose to multi-month highs against sterling and the euro after the Bank of England cut rates and after dovish comments from an ECB official. Domestically, the Bank of Japan raised its discount rate to a 16-year high of 0.25% and said it was ready to raise rates further if the economy demands it.

Trading recommendations

• Support levels: 148.58,147.06
• Resistance levels: 151.28,153.92,158.22

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. The price reached the support level at 148.48, where sellers covered some of the sales, and now the price is testing this level again. With a high probability of continuing to decline, intraday, it makes sense to look for sales up to the support level of 147.06, but only after the breakdown of 148.48. 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.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2448
• Prev. Close: 2447
• % chg. over the last day: -0.04%

Gold rose to around $2,450 per ounce on Friday, approaching a record high and hitting a weekly high, helped by recent weak economic data from the US, which reinforced expectations of a Federal Reserve rate cut. Data released on Thursday showed that US manufacturing activity contracted more than expected in July, with employment falling to levels not seen since 2020. In addition, jobless claims rose to 249,000, the highest in almost a year. Investors now await the monthly employment report. Meanwhile, the growing risk of a wider conflict in the Middle East is increasing the appeal of gold as a safe haven.

Trading recommendations

• Support levels: 2431,2414,2400,2384,2370,
• Resistance levels: 2469,2500

From the point of view of technical analysis, the trend on the XAU/USD has changed to a bullish one. The price has reached the resistance level of 2469, but since this level has been tested before, there is a high probability that the price will break this level and rally to 2500. Buying is high here, as the price has deviated strongly from the moving averages. For buying, it is best to consider the EMA lines or the support level of 2431, but with confirmation. For selling, there are no optimal entry points right now.

Alternative scenario:

if the price breaks and consolidates below the support level of 2384, the downtrend will likely resume.