The Analytical Overview of the Main Currency Pairs on 2024.08.08

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0926
• Prev. Close: 1.0922
• % chg. over the last day: -0.04%

The strengthening of the dollar on Wednesday put pressure on the euro. The euro was also pressured by dovish comments from ECB Governing Council representative Rehn, who said that ECB rate cuts could continue if inflation slows. Traders in Europe have 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. The price is forming a balanced environment, with the MACD indicator inactive. It is worth buying only with confirmation, in the form of buyers’ initiative from the support level of 1.0884. We can consider the resistance level of 1.0941 for sell deals, but also with confirmation.

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: 1.2690
• Prev. Close: 1.2690
• % chg. over the last day: 0.0%

The British pound fell to $1.2693, approaching a one-month low, as investors expect the Bank of England to cut interest rates soon. The fall comes amid fears of a US recession, which has also caused British government bond yields to fall to new multi-month lows. Markets are now expecting two quarter-point rate cuts by the Bank of England by December.

Trading recommendations

• Support levels: 1.2662
• Resistance levels: 1.2705,1.2731,1.2803,1.2879,1.2909,1.2950

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bearish. Unlike the euro, the British continues to systematically decline. Currently, the price is trying to test the support level of 1.2662. For sell deals, we can consider the resistance level of 1.2705. There are no optimal entry points for buying, but given the divergence in the MACD and RSI indicators, the 1.2662 support level may act as a reversal.

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: 144.73
• Prev. Close: 146.68
• % chg. over the last day: +1.34%

The yen’s weakness gives the dollar a boost after the yen fell more than 1% on Wednesday on dovish comments from BOJ Deputy Governor Uchida, who said that the BOJ will not raise interest rates further when financial markets are in turmoil. However, markets expect the Central Bank to raise rates further as rising local wages boost inflation.

Trading recommendations

• Support levels: 146.37,142.80,140.22,137.26
• 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. The price did not reach the 148.13 resistance level, so there is a high probability that the price will make one more growth attempt before it starts to decline. The area below 146.37 can be considered for buying, provided the price consolidates above the level. Selling can be considered if the price consolidates below the demand zone. In such a case, the price could fall sharply to 142.80.

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: 2391
• Prev. Close: 2383
• % chg. over the last day: -0.34%

Financial markets stabilized, allowing investors to refrain from liquidating bullion assets to cover short positions. Fund futures now reflect a broad consensus that the Central Bank will cut rates by 100 bps over the three remaining decisions this year, which will limit the opportunity cost of owning non-interest-bearing precious metals and lift gold prices. At the same time, lingering concerns over escalating geopolitical tensions in the Middle East also supported gold demand.

Trading recommendations

• Support levels: 2367,2343
• Resistance levels: 2403,2414,2445,2459,2471,2500

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 resistance level 2403. 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 prerequisites for gold to test the support level of 2343. A price fixing above 2414 may trigger an impulsive rise to 2445.

Alternative scenario:

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