The Analytical Overview of the Main Currency Pairs on 2024.09.18

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1132
• Prev. Close: 1.1113
• % chg. over the last day: -0.17 %

The euro came under pressure on Tuesday after the German ZEW Survey’s Economic Growth Expectations Index for September rose more than expected and hit an 11-month low. The euro’s losses accelerated after the dollar rose on stronger-than-expected reports on US retail sales for August and manufacturing production for August. Swaps discount the odds of a 25bp ECB rate cut at 30% for the October 17 meeting and 100% for a 25bp rate cut at the December 12 meeting.

Trading recommendations

• Support levels: 1.1110, 1.1068, 1.1051, 1.1013, 1.0950, 1.0905, 1.0884
• Resistance levels: 1.1134, 1.1191, 1.1275

The EUR/USD currency pair’s hourly trend is bullish. On Tuesday, the euro reached the resistance level of 1.1134, above which a false breakout was formed. The price impulsively returned behind the level on increased volumes, indicating that the downward movement was accelerated by market sales. Considering the divergence on the MACD indicator, there is a high probability of corrective movement. Inside the day, we can look for sales to test liquidity below 1.1110. Here, it is important to assess the price reaction: initiatives from buyers will open the way for the price to test 1.1134. A consolidation below 1.1110 will trigger selling to 1.1068. Be prepared for volatility today and assess the risks correctly.

Alternative scenario:

if the price breaks the support level of 1.1002 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3214
• Prev. Close: 1.3161
• % chg. over the last day: -0.40 %

Inflation data will be released in the UK today. Inflationary pressures are expected to continue to subside, but the main interest of economists will be focused on service sector inflation, which remains elevated. This is one of the reasons why the Bank of England is in no hurry to cut rates further. If today’s inflation data show a non-decline surprise, the British pound may get additional support in the coming weeks.

Trading recommendations

• Support levels: 1.3182, 1.3115, 1.3086, 1.3072, 1.3033, 1.3012, 1.2973, 1.2932
• Resistance levels: 1.3230, 1.3306

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bullish. Yesterday, the price reached the resistance zone at 1.3230, where sellers took the initiative. Currently, the price has corrected to the support level of 1.3153. There is a reaction of buyers, so intraday you can look for buying here. If the price consolidates below 1.3153, we should expect the price to decline to 1.3115.

Alternative scenario:

if the price breaks the support level of 1.3033 and consolidates below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 140.59
• Prev. Close: 142.40
• % chg. over the last day: +1.28 %

The Japanese yen came under pressure on Tuesday after the dollar strengthened on the back of stronger-than-expected US retail sales and manufacturing reports for August. Any rise in USD/JPY quotes should now be seen as a correction, as the Japanese yen now has an advantage over the US dollar and other risky assets due to the reversal of the Bank of Japan’s monetary policy.

Trading recommendations

• Support levels: 141.13, 140.22, 137.26
• Resistance levels: 141.30, 143.04, 144.42, 147.17, 148.29, 150.88, 151.26

From a technical point of view, the medium-term trend of the USD/JPY currency pair is a downtrend. Technically, the conditions for the trend change are beginning to form. Yesterday, buyers took initiatives from the moving averages, and today — from the support level of 141.13. Sellers need to keep the price below 142.05. Fixing the price above this level will provoke a wave of growth up to 143. A move below 141.13 will open the way for the yen to 140.22.

Alternative scenario:

if the price breaks through and consolidates above the resistance at 143.04, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2582
• Prev. Close: 2570
• % chg. over the last day: -0.47 %

The US Federal Reserve will hold a monetary policy meeting today and start a rate-cut cycle for the first time since 2020. The main dispute is over the size of the rate cut: 25 or 50 bps and how many basis points the rate will be cut by the end of the year. The probability of a 0.25% rate cut is 100%, while the probability of a 0.5% rate cut is 52%. According to economists, US Fed policymakers have no specific reason to start this easing cycle with an aggressive move, as US GDP for Q3 is projected to show a robust 2.5%. However, if the US Fed surprises and cuts the rate by 0.5%, it will hit the US dollar hard, but on the other hand, it will be favorable for precious metals.

Trading recommendations

• Support levels: 2564, 2541, 2528, 2522, 2513, 2503
• Resistance levels: 2600

From the point of view of technical analysis, the trend on the XAU/USD is bullish. The price corrected to the support level of 2564. Buyers are trying to be active here. Inside the day, you can look for buying here, but with a short stop loss. The profit target remains the same — 2600. A price fixation below 2564 may provoke a sell-off to 2541.

Alternative scenario:

if the price breaks down the support level of 2513, the downtrend will likely resume.