The Analytical Overview of the Main Currency Pairs on 2024.08.07

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0940
• Prev. Close: 1.0929
• % chg. over the last day: -0.10%

The dollar rebound exerted pressure on the euro on Tuesday. In addition, a negative factor for the euro was a larger-than-expected decline in retail sales in the Eurozone in June. June retail sales in the Eurozone fell by 0.3% m/m, weaker than expected at 0.1% m/m, and the biggest decline in 6 months. Traders in Europe raised expectations for ECB rate cuts: they now expect further rate cuts of 90bp this year, with a 50bp cut likely at the September meeting.

Trading recommendations

• Support levels: 1.0884,1.0841,1.0816
• Resistance levels: 1.0941,1.1000

The trend on the EUR/USD currency pair in the hourly time frame has changed to an upward trend. Technically, the euro now looks stronger than the pound, yen, and even gold. However, the divergence on the MACD and RSI indicates a technical correction. Where can the price go down? The support level of 1.0941 expectedly failed to stop the price, so the level of 1.0884 remains. It is worth buying only with confirmation, in the form of buyers’ initiative. There are no optimal entry points for selling now.

Alternative scenario:

if the price breaks through the support level of 1.0786 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2766
• Prev. Close: 1.2691
• % chg. over the last day: -0.60%

There are a few important economic events in the UK this week. Over the long term, econometric models suggest that the UK interest rate will be at 3.75 percent in 2025 and 2.75 percent in 2026. Restrictive policies have already reduced GDP to below potential and have also had a negative impact on the labor market. Thus, this increases the likelihood of further policy easing, which puts pressure on the British currency.

Trading recommendations

• Support levels: 1.2662
• Resistance levels: 1.2731,1.2803,1.2879,1.2909,1.2950

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bearish. Unlike the euro, the British currency continues to systematically decline. Now, the price is trying to test the support level of 1.2662. For sell deals, we can consider the resistance level of 1.2731.

Alternative scenario:

if the price breaks through the resistance level at 1.2803 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 144.14
• Prev. Close: 144.30
• % chg. over the last day: +0.11%

USD/JPY quotes rose by 0.11% on Tuesday. The yen was pressured on Tuesday by the news that the Bank of Japan, the Ministry of Finance, and the Financial Services Agency met in Tokyo to discuss international markets after the yen strengthened to a 7-month high on Monday. The yen was also pressured by Tuesday’s news that Japanese household spending fell more than expected in June. In addition, a 10% rise in the Nikkei Stock Index on Tuesday kept safe-haven demand for the yen in check.

Trading recommendations

• Support levels: 146.29,142.80,140.22,137.26
• Resistance levels: 148.13,150.88,151.26,153.80

From the technical point of view, the medium-term trend on the currency pair USD/JPY is bearish. Yesterday, the price traded in balance at the level of moving averages. At the opening of Asia today, the quotes grew, and now, they are seeking to test the liquidity zone above 150.88, where you can look for sell deals to continue the downtrend. There are no optimal entry points for buying right now.

Alternative scenario:

if the price breaks through and consolidates above the resistance level of 150.88, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2410
• Prev. Close: 2389
• % chg. over the last day: -0.87%

The strengthening dollar on Tuesday was a bearish factor for metals. In addition, the sharp rise in stocks on Tuesday reduced demand for precious metals. However, it should be noted that fund demand for gold is increasing — long gold positions in ETF funds rose to a 5-month high on Monday. Markets now estimate a total easing of over 100 basis points this year and expect a significant 50 basis point rate cut in September. For gold, this is a favorable environment for growth.

Trading recommendations

• Support levels: 2367,2343
• Resistance levels: 2414,2445,2459,2471,2500

From the point of view of technical analysis, the trend on the XAU/USD has changed to a downtrend. Yesterday, sellers took the initiative from the 2414 resistance level. Currently, the price is trading below the moving averages, and intraday selling pressure remains. Under such market conditions, we can look for selling from 2403 to renew the low of the week. There are indications that gold is looking to test the support level of 2343.

Alternative scenario:

if the price breaks and consolidates above the resistance level of 2459, the uptrend will likely resume.