The Analytical Overview of the Main Currency Pairs on 2024.09.30

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.1175
• Prev. Close: 1.1165
• % chg. over the last day: -0.09 %

The euro came under pressure on Friday after the Eurozone Economic Confidence Indicator for September fell more than expected. In addition, price pressures eased after Eurozone inflation expectations for August fell, and France’s Consumer Price Index for September rose less than expected, raising the odds of an ECB interest rate cut at the October meeting. Swaps discount the odds of a 25bp ECB rate cut at the October 17 meeting at 82% and 100% for a 25bp rate cut at the December 12 meeting.

Trading recommendations

• Support levels: 1.1155, 1.1122, 1.1105, 1.1068
• Resistance levels: 1.1169, 1.1198, 1.1275

The EUR/USD currency pair’s hourly trend is bullish. Currently, the price is squeezed trading two levels: support at 1.1155 and resistance at 1.1169. During the day, buyers’ pressure somewhat prevails, so the probability of upward movement is higher. Buy trades should be considered after the breakout of 1.1169 with a minimum target of 1.1198. Going below 1.1150 will open the way for the price to 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: 1.34083
• Prev. Close: 1.3372
• % chg. over the last day: -0.26 %

The UK economy grew by 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. Government spending and exports were revised lower, while investment grew more. The Nationwide UK House Price Index rose 3.2% year-on-year in September 2024, accelerating from August’s 2.4% rise. This marked the seventh consecutive period of House Price Index growth and the strongest increase since November 2022. In recent months, income growth has outpaced house price growth, and borrowing costs have been falling amid expectations that the Bank of England will continue to cut interest rates in the coming quarters. 

Trading recommendations

• Support levels: 1.3371, 1.3311, 1.3300, 1.3274, 1.3241, 1.3188, 1.3153, 1.3115
• Resistance levels: 1.3427, 1.345

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bullish. The british pound has found support at 1.3371, where buyers are active, which is confirmed by the volumes. Intraday buying should be considered with a target of up to 1.3427. A price consolidation below 1.3371 will open the way to 1.3311.

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: 144.76
• Prev. Close: 142.17
• % chg. over the last day: -1.82 %

The yen rose sharply on Friday after former Defense Minister Shigeru Ishiba, who is seen as supportive of the Bank of Japan’s plan to gradually raise interest rates, unexpectedly won the election for the Liberal Democratic Party leader, beating Sanae Takaichi, who opposed interest rate hikes. This essentially made him the next prime minister of Japan. Swaps estimate the odds of a 10bp BoJ rate hike at 3% for the October 30–31 meeting and 13% for a 10bp hike for the December 18–19 meeting.

Trading recommendations

• Support levels: 142.22, 140.46, 137.26
• Resistance levels: 142.88, 143.48, 145.23, 146.50.

From a technical point of view, the medium-term trend of the USD/JPY currency pair has changed to a downtrend. On Friday, the yen strengthened sharply on the news. It is noteworthy that the price rebounded from a strong resistance zone. Currently, intraday bias is behind the bears, but the price has reached the support zone. If the buyers push the price above 142.22, we can consider buying with a target of 142.88 or 143.48. If the sellers are active and do not let the price rise above 142.22, we should expect a decline to 140.46. 

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: 2672
• Prev. Close: 2660
• % chg. over the last day: -0.45 %

Precious metals retreated on Friday after the US PCE Core Price Index for August rose 2.7% y/y, in line with expectations but still well above the Fed’s 2% inflation target, dampening hopes that the Fed will cut rates again by more than 25 bps. However, the prospect of further Fed rate cuts combined with dovish expectations from global central banks keeps gold attractive. In addition, China is conducting additional monetary stimulation, and the growing risk of a wider conflict in the Middle East further strengthens this attractiveness.

Trading recommendations

• Support levels: 2648, 2638, 2623, 2604, 2584, 2574, 2561, 2541, 2528, 2522
• Resistance levels: 2674, 2700

From the point of view of technical analysis, the trend on the XAU/USD is bullish. On Friday, the price corrected to the support level of 2648, where the buyers took the initiative. There is a bullish bias inside the day, so we can consider buying with the target up to 2674. The buyers need to hold the level of 2648. If the price consolidates below, it will sharply increase the probability of a deeper correction to 2639.

Alternative scenario:

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