The Analytical Overview of the Main Currency Pairs on 2024.10.22

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0860
• Prev. Close: 1.0815
• % chg. over the last day: -0.42 %

The euro started the week in a downtrend at $1.085, marking the fourth consecutive week of losses and remaining near the weakest level in the last two and a half months. The ECB cut interest rates for the third time this year last week as a faster decline in inflation allowed it to lend support to the region’s faltering economy. While officials have not specified when or how quickly rates will be cut, investors are betting on a flurry of cuts in the coming months. Speaking earlier Monday, Lithuania’s Gediminas Simkus and Latvia’s Martins Kazaks said rates will be cut further if the downward trend in inflation continues.

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 price decreased to the support level of 1.0809. Considering the MACD divergence, there is a high probability that the buyers will re-enter the game here. Today, we can consider buying from this level, but with a short stop. The profit target is 1.0868. Breakdown and consolidation of 1.0809 will open the price way to 1.0783.

Alternative scenario:

if the price breaks the resistance level at 1.0902 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.3042
• Prev. Close: 1.2984
• % chg. over the last day: -0.47 %

Bank of England spokesperson Megan Green said she favors a “cautious, gradual approach” to policy easing due to uncertainty over how British consumers will respond to lower borrowing costs after rising interest rates prompted many to save more. Green is one of the most hawkish policymakers at the MPC, and she opposed August’s quarter-point interest rate cut. She did not indicate whether she would support a second rate cut next month, as traders expect. But Green’s remarks suggest she is wary of rushing to accelerate the rate cut cycle.

Trading recommendations

• Support levels: 1.2977, 1.2931
• Resistance levels: 1.3032, 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. Yesterday, by the end of the trading session the price reached the support level of 1.3032, where buyers reacted moderately. Today intraday we can look for buying with a target up to 1.3032. A breakdown and consolidation of the price below 1.2977 will open the way for the price to 1.2931.

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: 149.49
• Prev. Close: 150.83
• % chg. over the last day: +0.89 %

The Japanese yen fell to the psychological level of 150 per dollar on Tuesday, which the markets fear could be the reason for another currency intervention by the Japanese authorities. The weakening yen prompted Japan’s chief currency diplomat, Atsushi Mimura, to reiterate the government’s warning that it was closely monitoring currency movements and that excessive volatility was undesirable. Japanese authorities intervened in currency markets earlier this year when the yen broke through the 160 per dollar mark.

Trading recommendations

• Support levels: 150.50, 149.63, 148.90, 148.12
• Resistance levels: 150.93, 153.42

From a technical point of view, the medium-term trend of the USD/JPY currency pair is bullish. Today, at the Asian session, the price reached the resistance level at 150.93, where sellers are trying to react. Considering the MACD divergence, we can look for selling here, as it is a strong resistance level of higher time frames. The profit target is 150.50. A move above 151 is undesirable for sellers as it could trigger a strong upward momentum.

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: 2720
• Prev. Close: 2720
• % chg. over the last day: 0.0 %

Precious metals rallied yesterday amid safe-haven demand due to tensions in the Middle East and uncertainty over next month’s US presidential election. Demand for gold as a store of value also rose after Chinese banks cut benchmark lending rates more than expected. But by the end of the trading session, gold prices had fallen back to the day’s opening level, which looks like profit-taking.

Trading recommendations

• Support levels: 2711, 2704, 2685, 2673, 2661, 2640, 2605, 2584, 2574, 2561
• Resistance levels: 2740, 2750

From the point of view of technical analysis, the trend on the XAU/USD is bullish. Yesterday, the price declined sharply on the background of profit taking. The resistance level was 2740. However, at the end of the trading session buyers bought the price back from 2714. A broadly volatile flat is likely to start forming here. For sell deals we can reconsider 2740, provided sellers react. For buying we consider 2714.

Alternative scenario:

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