The Analytical Overview of the Main Currency Pairs on 2024.10.18

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0860
• Prev. Close: 1.0831
• % chg. over the last day: -0.27 %

The euro approached USD 1.08, a new low since early August, after the ECB, as expected, cut borrowing costs by 25 bps at the October 2024 meeting, with President Lagarde saying the decision was unanimous. The move followed similar cuts in September and June, bringing the key deposit rate to 3.25%, the lowest level since May 2023. At the same time, policymakers strengthened their guidance, reaffirming their commitment to maintain restrictive rates until the 2% inflation target is reached. Markets now expect further rate cuts of 25 bps at each meeting until the deposit rate reaches 2% by July.

Trading recommendations

• Support levels: 1.0809, 1.0783
• Resistance levels: 1.0868, 1.0894, 1.0951, 1.0979, 1.1013, 1.1036, 1.1079

The EUR/USD currency pair’s hourly trend is bearish. The euro price decreased to the support level of 1.0810. The pressure of sellers keeps intraday and there are all prerequisites for a fall to 1.0783. Currently, the price is demonstrating technical correction, without buyers’ initiative. For selling, we can consider support zones above 1.0868 and 1.0894. There are no optimal entry points for buying now.

Alternative scenario:

if the price breaks the resistance level at 1.0951 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2990
• Prev. Close: 1.3010
• % chg. over the last day: +0.15 %

The UK Retail Sales unexpectedly rose by 0.3% month-on-month in September 2024, following a 1% increase in August. On an annualized basis, retail sales rose by 3.9%, the biggest annualized rise since February 2022, following an upwardly revised 2.3% rise in August and estimates of 3.2%. The data was a trigger for the British currency to strengthen on Friday.

Trading recommendations

• Support levels: 1.2993, 1.2977
• Resistance levels: 1.3071, 1.3101, 1.3171, 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. Buyers managed to show a reaction to the support level of 1.2977, after which the price rose to 1.3071. If sellers react to this level, the price may resume the downward momentum. If there is no reaction from sellers to the level, the price could jump sharply to the 1.3100 priority change level.

Alternative scenario:

if the price breaks the resistance level at 1.3101 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 149.56
• Prev. Close: 150.20
• % chg. over the last day: +0.42 %

The Japanese yen traded around 150 per dollar on Friday, hovering near 11-week lows, as slowing domestic inflation countered hawkish bets on the Bank of Japan’s monetary policy. Data showed Japan’s core and core inflation slowed to five-month lows of 2.5% and 2.4%, respectively, in September. However, the core inflation figure was slightly above estimates of 2.3%. Meanwhile, the weakening yen prompted Japan’s chief currency diplomat to reiterate the government’s warning that it is closely monitoring currency movements and that excessive volatility is undesirable. Japanese authorities intervened in currency markets earlier this year when the yen broke through the 160 per dollar mark, and markets viewed the 150 level as a potential new line.

Trading recommendations

• Support levels: 148.90, 148.12, 148.12, 147.50, 146.90, 146.02, 144.20, 143.53
• Resistance levels: 150.31, 150.93, 153.42

From a technical point of view, the medium-term trend of the USD/JPY currency pair is bullish. The price has reached the resistance level of 150.31, but the sellers’ reaction is weak. There is still buying pressure inside the day, but MACD divergence indicates a high probability of a deeper correction. A breakout of 150.31 will open the way to 150.93. There are no optimal entry points for selling right now.

Alternative scenario:

if the price breaks down the support level of 148.11, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2674
• Prev. Close: 2692
• % chg. over the last day: +0.67 %

Gold climbed above $2,700 per ounce on Friday to a new record high, driven by global demand for safe-haven assets and expectations of further interest rate cuts by major central banks. The European Central Bank cut rates for the third time this year, lowering the deposit rate to 3.25% as expected, and said the disinflation process was “well underway.” Gold also received support from rising tensions in the Middle East after the Israeli military confirmed on Thursday that Yahya Sinwar, a key Hamas leader and prime target, had been eliminated. In addition, bullion prices rose as investors moved away from risky assets due to poor fiscal measures in China.

Trading recommendations

• Support levels: 2685, 2673, 2661, 2640, 2605, 2584, 2574, 2561, 2541, 2528
• Resistance levels: 2711, 2750

From the point of view of technical analysis, the trend on the XAU/USD is bullish. The price not only reached the 2700 level but also consolidated above it. As for resistance levels, now we can only focus on psychological levels and on the levels of lower timeframes. The nearest psychological resistance level is 2750. Intraday resistance level 2711 has formed, which can be used for selling, provided sellers react to the level. There are no optimal entry points for buying right now, as the price has deviated strongly from the midlines.

Alternative scenario:

if the price breaks down the support level of 2640, the downtrend will likely resume.