The Analytical Overview of the Main Currency Pairs on 2024.09.24

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1159
• Prev. Close: 1.1111
• % chg. over the last day: -0.43 %

The euro fell to $1.11 amid concerns that the European Central Bank (ECB) may have to accelerate monetary easing measures to support the struggling economy. Flash PMIs for the Eurozone, Germany, and France were disappointed and showed that private sector activity in the Eurozone has returned to contraction. Investors are now betting on an additional ECB rate cut of around 44 basis points this year, with a 40% chance of a rate cut in October.

Trading recommendations

• Support levels: 1.1105, 1.1086, 1.1068, 1.1051, 1.1013, 1.0950
• Resistance levels: 1.1141, 1.1155, 1.1180, 1.1275

The EUR/USD currency pair’s hourly trend is bullish. Yesterday, the euro fell sharply lower, dropping to the support level of 1.1086. Buyers partially stopped the sell-off, pushing the price back to 1.1141, where sellers took the initiative again. In turn, the buyers created another support level at 1.1105, and now the price reacted to this level by rising. Under such market conditions, sell deals can be sought from resistance levels of 1.1141 or 1.1155, but with confirmation. It is important for buyers to keep the price above 1.1105. Otherwise, the euro could fall to 1.1068.

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: 1.3305
• Prev. Close: 1.3346
• % chg. over the last day: +0.30 %

The latest Purchasing Managers’ Index (PMI) data was disappointing. The UK manufacturing PMI fell from 52.5 to 51.5, while the services sector contracted from 53.7 to 52.8. Such data increased the likelihood of an interest rate cut from the Bank of England at its next meeting. And supposedly, it should have put pressure on the British currency. However, the GBP continues to strengthen against the dollar as the US Fed has already started the easing cycle, while the Bank of England, after one rate cut, took a pause.

Trading recommendations

• Support levels: 1.3300, 1.3274, 1.3241, 1.3188, 1.3153, 1.3115, 1.3086, 1.3072
• Resistance levels: 1.3455

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bullish. The British pound looks stronger than the euro. Yesterday, large participants sharply bought the price after a liquidity test below 1.3274. Buying at such prices is risky: the price has deviated from the average values, while the MACD indicator has accumulated a divergence. Selling can be considered if there is an initiative on the lower time frames.

Alternative scenario:

if the price breaks the support level of 1.3248 and consolidates below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 143.91
• Prev. Close: 143.58
• % chg. over the last day: -0.23 %

The Japanese yen fell to 144 per dollar in holiday trading on Monday, extending last week’s losses amid concerns that the Bank of Japan is in no hurry to raise interest rates. The yen lost more than 2% last week as the Bank of Japan unanimously kept the interest rate unchanged at 0.25%, which is in line with expectations. Meanwhile, BoJ Governor Kazuo Ueda acknowledged “some weakness” in the economy during a press conference after the meeting, which was a slightly softer tone than previous statements. His comments further reduced the chances of a rate hike in October, although a rate hike in December is still expected.

Trading recommendations

• Support levels: 143.24, 142.83, 142.19, 141.13, 140.43, 137.26
• Resistance levels: 144.42, 146.30, 147.17, 148.29, 150.88, 151.26

From a technical point of view, the medium-term trend of the USD/JPY currency pair has changed temporarily to an uptrend. Currently, the price is trading in the corridor between 143.24 and 144.42. Yesterday, the buyers reacted to the support level, and now the price seeks to test the upper boundary of the wide flat. A breakout of 144.42 will open the way for the price to 146.30. If sellers react at 144.42, intraday selling can be considered again up to 143.24.

Alternative scenario:

if the price breaks and consolidates below the support at 140.43, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2620
• Prev. Close: 2628
• % chg. over the last day: +0.30 %

Gold traded near $2,630 per ounce on Tuesday, near record highs, as the prospect of less tight monetary policy and heightened geopolitical risks increased support for safe-haven assets. Significant rate cuts by the US Federal Reserve continued to boost the appeal of precious metals, with indications that the Fed may make another 50bp rate cut before the end of the year. Atlanta Fed President Bostic noted that inflation is rising and the labor market is cooling faster than expected, suggesting monetary policy normalization sooner.

Trading recommendations

• Support levels: 2621, 2604, 2584, 2574, 2561, 2541, 2528, 2522, 2513, 2503
• Resistance levels: 2637, 2650, 2700

From the point of view of technical analysis, the trend on the XAU/USD is bullish. Sellers showed a reaction from the level of 2637. This is not a reversal yet, but the first fixations of purchases. Inside the day we can look for sales up to 2621. Then we evaluate the price reaction. If buyers show initiative from 2621, we can switch to buying to renew the historical maximum. A move below 2621 will trigger a sell-off to 2604.

Alternative scenario:

if the price breaks down the support level of 2569, the downtrend will likely resume.