The Analytical Overview of the Main Currency Pairs on 2024.10.01

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1156
• Prev. Close: 1.1135
• % chg. over the last day: -0.18 %

The Eurozone consumer inflation report will be released today. Inflation will continue to decline and reach the ECB’s 2% target. While Lagarde and her colleagues have not given clear signals regarding an October rate cut, disappointing PMIs have led market participants to take this view. The probability of a 25 bps rate cut at the October 17 meeting is around 75%. Therefore, lower inflationary pressures will reinforce this view, increasing the likelihood of further rate cuts and putting additional pressure on the single European currency. Only a surprise in the form of rising inflation can change this view, which is unlikely.

Trading recommendations

• Support levels: 1.1122, 1.1105, 1.1068
• Resistance levels: 1.1158, 1.1169, 1.1198, 1.1275

The EUR/USD currency pair’s hourly trend is bullish. Yesterday, the price reached the resistance level at 1.1198, where sellers took the initiative. There was a sharp sell-off to the level of priority change at 1.1122. A breakdown of this level will change the medium-term bias and send the price to 1.1105 or lower. Volumes indicate that buyers are trying to defend the level. Therefore, we can look for intraday buying today with a target of 1.1158. We will consider selling after the breakdown of 1.1122.

Alternative scenario:

if the price breaks the support level of 1.1122 and consolidates below it, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3367
• Prev. Close: 1.3374
• % chg. over the last day: +0.05 %

The British pound was around $1.33, holding near the March 2022 highs, as traders assessed the outlook for the economy and monetary policy. The British economy grew 0.5% quarter-on-quarter in the second quarter of 2024, down slightly from 0.6% in the first estimate and 0.7% in the first quarter. Inflation was 2.2% in August. Meanwhile, the Bank of England left interest rates unchanged at 5% at its September 2024 meeting, in line with expectations, and said that a gradual approach to removing policy restraint remains appropriate.

Trading recommendations

• Support levels: 1.3371, 1.3351, 1.3300, 1.3274, 1.3241, 1.3188, 1.3153, 1.3115
• Resistance levels: 1.3427, 1.3455

From the technical analysis point of view, the trend on the GBP/USD currency pair is bullish. The situation is very similar to the euro. After the resistance test, the British pound sharply declined and reached support at 1.3371. The volumes show that buyers are trying to keep the price higher. There is a price reaction. Intraday, we can look for buying with a target of up to 1.3427. A breakdown of 1.3371 will probably lead to a change of priority and send the price to 1.3300.

Alternative scenario:

if the price breaks the support level of 1.3311 and consolidates below it, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 142.12
• Prev. Close: 143.61
• % chg. over the last day: +1.48 %

The Japanese yen paused its recent rally and traded around 142 per dollar on Monday amid dovish statements from the country’s new Prime Minister. Former Defense Minister Shigeru Ishiba, who took over the leadership of Japan’s ruling party last Friday, said that policy should remain accommodative (stimulative) because of current economic conditions. Markets are now divided on whether the Bank of Japan will raise interest rates again in October or December.

Trading recommendations

• Support levels: 143.48, 143.04, 142.22, 140.46, 137.26
• Resistance levels: 145.23, 146.50

From a technical point of view, the medium-term trend of the USD/JPY currency pair is bearish. Yesterday, buyers took the initiative from the demand zone below 142.22. After that, the price broke the nearest resistance level, leaving 2 new support levels behind. The bullish bias prevails in the day, but the price has deviated strongly from the moving averages. We should wait for the price to react to the resistance level of 145.23 for selling. For buying, we should consider the zone of 143.48-143.65.

Alternative scenario:

if the price breaks through and consolidates above the resistance level of 146.50, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2659
• Prev. Close: 2635
• % chg. over the last day: -0.91 %

The yellow metal is on track for its biggest quarterly gain since early 2016, helped by repeated record highs in recent sessions following the Fed’s 50 bps rate cut in September, tensions in the Middle East, and additional monetary stimulus from China. Fed funds futures indicate that markets are betting on a near 42% probability of another 50 bps rate cut in November. A rate cut will support gold and silver prices in the near term.

Trading recommendations

• Support levels: 2624, 2604, 2584, 2574, 2561, 2541, 2528, 2522
• Resistance levels: 2643, 2655, 2674, 2700

From the point of view of technical analysis, the trend on the XAU/USD is bullish. Yesterday, the price corrected to the support level 2624, where the buyers took the initiative. However, the intraday bias is bearish, so if the sellers take the initiative from 2543, we can consider sell trades. There are no optimal entry points for buying now.

Alternative scenario:

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