The Analytical Overview of the Main Currency Pairs on 2024.08.13

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0918
• Prev. Close: 1.0931
• % chg. over the last day: +0.12%

The ECB started to reduce borrowing costs in June to bring inflation back to the 2% target. Economists estimate the ECB will cut the deposit rate quarterly through the end of next year, ending the easing cycle earlier than previously expected. The benchmark rate is projected to reach 2.25% by December 2025 after six quarter-point cuts, faster than the previous prognosis for mid-2026. Swaps estimate the probability of a 25bp ECB rate cut at the September 12 meeting at 94%.

Trading recommendations

• Support levels: 1.0905,1.0884,1.0841,1.0816
• Resistance levels: 1.0941,1.1000

The trend on the EUR/USD currency pair in the hourly time frame is bullish. The price has reached the resistance level of 1.0941, but there is no sellers’ reaction yet. Buyers’ pressure prevails intraday; MACD also indicates an upward momentum. Under such market conditions, it is necessary to analyze the price behavior at the level. A breakout of 1.0941 will open the way for the price to 1.1000. The sellers’ initiative from 1.0941 allows opening sell deals with a target of 1.0905.

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: 1.2758
• Prev. Close: 1.2766
• % chg. over the last day: +0.06%

The British pound strengthened above $1.278 after hawkish remarks from Bank of England Governor Catherine Mann. She noted the continued rise in prices of goods and services and warned that wage pressures could persist for years. Services inflation exceeds 5% annually, complicating efforts to maintain the 2% core inflation target. Investors are awaiting inflation data due for release on Wednesday, which is expected to show the UK CPI rising to 2.3% from 2%. All of these factors are helping to strengthen the pound as they push back further rate cuts. On the other hand, labor statistics today may show a slowdown in wage growth.

Trading recommendations

• Support levels: 1.2726,1.2714,1.2665
• Resistance levels: 1.2781,1.2839,1.2879,1.2909,1.2950

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bullish. The price has reached the 1.2781 resistance level, where sellers are trying to hold the level, but the buyers press the price to the level, increasing the probability of a breakout. In the case of a 1.2781 breakout, the price will open the way to 1.2839. If sellers show initiative again from 1.2781, we can look for sell deals with a target of 1.2726.

Alternative scenario:

if the price breaks down the support level of 1.2726 and consolidates below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 146.64
• Prev. Close: 147.14
• % chg. over the last day: +0.34%

The Japanese yen fell to 148 per dollar on Monday. Trading volumes were light yesterday due to a holiday weekend in the land of the rising sun. Former Bank of Japan (BoJ) board official Sakurai predicts that the BoJ will not raise interest rates again this year due to turmoil in the financial markets. This is a negative factor for the yen. Swaps estimate the odds of a 10 bps BoJ rate hike at 0% at the September 20 meeting and 11% at the October 31 meeting.

Trading recommendations

• Support levels: 147.03,146.10,142.80,140.22,137.26
• 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 finally reached the resistance level at 148.13, where sellers took the initiative. However, the support level of 147.03 supported the price and brought back the buyers’ pressure intraday. With such market conditions, it is necessary to analyze the price reaction. For selling, 148.13 can be considered once again, but only with confirmation. A breakout of 148.13 will open the way for the price to 150 and above, so it is very important for sellers to hold this resistance level.

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: 2430
• Prev. Close: 2470
• % chg. over the last day: +1.64%

Gold prices rose yesterday amid demand for a safe haven as an Iranian attack on Israel may be imminent, and Iran has conveyed through diplomatic channels that it will attack Israel soon. On the economic front, investors shifted their attention to this week’s upcoming US inflation data in search of clues as to the Federal Reserve’s monetary policy course.

Trading recommendations

• Support levels: 2459,2440,2416,2367,2343
• Resistance levels: 2476,2500

From the point of view of technical analysis, the trend on the XAU/USD has changed to an upward trend. The price broke through the priority change level and consolidated higher. The price has now reached the 2476 resistance level, where there is a large accumulation of liquidity above, and the price will certainly test this liquidity. Under such market conditions, buy trades should be sought from the support level of 2459 or 2440 in case of a deeper pullback. There are no optimal entry points for selling right now.

Alternative scenario:

if the price breaks down the support level of 2416, the downtrend will likely resume.