The Analytical Overview of the Main Currency Pairs on 2024.10.08

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0967
• Prev. Close: 1.0971
• % chg. over the last day: +0.04 %

The euro fell to $1.0950, the weakest level since mid-August, due to the diverging monetary policies of the European Central Bank and the US Federal Reserve. Weak Eurozone growth and inflation figures, which fell below the ECB’s 2% target in September, raised expectations of a rate cut at the ECB’s October meeting, which could be the third rate cut this year. ECB executives, including Christine Lagarde, have indicated their support for the idea. On the other hand, a strong US jobs report reduced the likelihood of a significant rate cut by the Federal Reserve, which strengthened the dollar and further weakened the euro.

Trading recommendations

• Support levels: 1.0950, 1,0918
• Resistance levels: 1.0979, 1.1013, 1.1036, 1.1079, 1.1136, 1.1163

The EUR/USD currency pair’s hourly trend is bearish. On Friday, the euro fell sharply against the US dollar and fell to the support level of 1.0950. Sellers’ pressure remains, but the first signs of profit-taking exist. The MACD divergence indicates the beginning of a corrective movement. If the price falls below 1.0979 again, intraday selling can be considered. There are no optimal entry points for buying now.

Alternative scenario:

if the price breaks the resistance level at 1.1099 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3114
• Prev. Close: 1.3083
• % chg. over the last day: -0.24 %

The British pound fell below $1.311, the lowest in almost four weeks, on expectations of a more aggressive rate cut in November. Bank of England Governor Andrew Bailey signaled a shift to a more “active” and “aggressive” approach to rate cuts, although Bank of England Chief Economist Huw Pill called for a more cautious approach. Meanwhile, the UK construction sector grew fastest in two years, but concerns remain over possible spending cuts and tax hikes in the upcoming October 30 budget.

Trading recommendations

• Support levels: 1.3047, 1.3035
• Resistance levels: 1.3175, 1.3290, 1.3327, 1.3377, 1.3389

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bearish. Inside the day, sellers are pushing the price lower, thus forming a pattern in the form of a descending wedge. Considering the MACD divergence, this increases the probability of a corrective movement or even a reversal. However, most likely, sellers will try to test the support level of 1.3047. If the breakout from the wedge is false, we should consider selling up to 1.3047. Buying should be considered only if the exit from the wedge will be accompanied by an impulsive movement.

Alternative scenario:

if the price breaks the resistance level at 1.3306 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 146.66
• Prev. Close: 148.18
• % chg. over the last day: -0.32 %

The Japanese yen weakened to 149 per dollar on Monday, prompting chief currency diplomat Atsushi Mimura to issue a new verbal warning against speculation in the currency market. The yen came under pressure last week when new Prime Minister Shigeru Ishiba and his Economy Minister Ryosei Akazawa advocated caution ahead of further interest rate hikes given current economic conditions. The currency’s fall intensified after Friday’s stronger-than-expected US jobs report, which allowed the US dollar to strengthen.

Trading recommendations

• Support levels: 146.90, 146.02, 144.20, 143.53, 142.22
• Resistance levels: 149.37, 151.26

From a technical point of view, the medium-term trend of the USD/JPY currency pair is bullish. The price is trying to test the resistance zone above 149.37. The MACD divergence is getting stronger, which increases the probability of corrective movement from this zone. Intraday buying from moving averages can be looked for but with short targets. For selling, we should consider 149.37, but also with confirmation in the form of sellers’ initiative.

Alternative scenario:

if the price breaks down the support level of 146.02, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2651
• Prev. Close: 2642
• % chg. over the last day: -0.34 %

Gold dipped below $2,650 per ounce on Monday, continuing its pullback from record highs after signs of a strong US labor market made it less likely that the Federal Reserve will continue to aggressively cut rates. Lower interest rates reduce the opportunity cost of holding non-interest-bearing bullion assets. Markets are now awaiting the minutes of the Fed’s latest meeting on Wednesday and the Consumer Price Index report on Thursday. At the same time, gold supports the upward trend, as it is a safe-haven asset amid the escalating conflict in the Middle East.

Trading recommendations

• Support levels: 2632, 2623, 2584, 2574, 2561, 2541, 2528, 2522
• Resistance levels: 2669, 2700

From the point of view of technical analysis, the trend on the XAU/USD is bullish. Gold is still trading in a broadly volatile flat 2632–2669. Currently, the price is trying to test the support at 2632, where we should expect the reaction of buyers. In this case, we should look for buying here, but with confirmation. Selling can be looked for on intraday time frames from the moving average lines.

Alternative scenario:

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