The Analytical Overview of the Main Currency Pairs on 2024.08.09

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0918
• Prev. Close: 1.0919
• % chg. over the last day: +0.01%

On Thursday, the dollar rose slightly after the weekly jobless claims in the US fell more than expected, leading to a rise in bond yields. The US weekly initial jobless claims fell by 17,000 to 233,000, indicating a stronger labor market than expected at 240,000. Markets rate the odds of a 25 bps rate cut at the September 17-18 FOMC meeting at 100% and a 50 bps rate cut at 62%. As for the Eurozone – swaps discount, the odds of a 25 bps ECB rate cut at the September 12 meeting are 99%.

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 upward. Yesterday, the price tested the liquidity zone below 1.0884, where buyers showed activity. Currently, the price is trading at moving average levels, and most likely, on the background of reduced volatility, the price will finish the week between 1.0884 and 1.0941, as there are no news triggers today.

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: 1.2685
• Prev. Close: 1.2749
• % chg. over the last day: +0.50%

The British pound weakened to below $1.28, the lowest level not seen in about a month. Traders have raised the odds on a rate cut before the end of the year and expect another 35 bps cut, with the next move likely to come in November. Nevertheless, Governor Bailey cautioned against cutting rates “too quickly or too significantly” as concerns remain about persistent domestic inflationary pressures.

Trading recommendations

• Support levels: 1.2714,1.2662
• Resistance levels: 1.2761,1.2803,1.2879,1.2909,1.2950

From the technical analysis point of view, the trend on the GBP/USD currency pair is bearish. Yesterday, the British pound found support at 1.2662, where buyers reacted sharply. Currently, the price has reached the resistance level of 1.2761, and it faces counter-selling. Intra-day selling can be looked for here with a target of up to 1.2714. There are no optimal entry points for buying right now.

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: 146.65
• Prev. Close: 147.20
• % chg. over the last day: +0.37%

Thursday’s Summary of Opinions from the Bank of Japan’s July 31st meeting was bearish for the JPY as BoJ policymakers expected monetary policy to remain accommodative even after an interest rate hike. Swaps estimate the odds of a 10 bps rate hike by the BoJ at 0% for the September 20 meeting and 14% for the October 30-31 meeting.

Trading recommendations

• Support levels: 146.40,142.80,140.22,137.26
• Resistance levels: 148.13,150.88,151.26,153.80

From a technical point of view, the medium-term trend of the currency pair USD/JPY is bearish. The price did not reach the resistance level of 148.13, so there is a high probability that the price will make one more growth attempt before it starts to decline. The area below 146.40 can be considered for buying. Selling can be considered if the price consolidates below the demand zone or from 148.13, subject to sellers’ reactions.

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: 2383
• Prev. Close: 2427
• % chg. over the last day: +1.87%

Gold fell to $2,420 per ounce on Friday after rising nearly 2% in the previous session. Nevertheless, gold continues to benefit from lingering geopolitical risks and expectations of a Federal Reserve rate cut. The metal’s appeal as a “safe haven” was boosted by escalating geopolitical tensions as markets awaited Iran’s retaliatory strikes on Israel. In addition, demand for gold from funds is supporting prices after long positions in gold ETFs rose to a 5-month high on Wednesday.

Trading recommendations

• Support levels: 2403,2367,2343
• Resistance levels: 2431,2445,2459,2471,2500

From the point of view of technical analysis, the trend on the XAU/USD has changed to a downtrend. Yesterday, buyers unexpectedly took the initiative without any fundamental level, which rarely happens. Currently, the price is trading above the moving averages, but the MACD indicates a bearish momentum. Under these market conditions, we can look for selling from 2431 with a target of 2403. With a high probability, gold will remain trading within the range of these levels until the end of the week.

Alternative scenario:

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