The Analytical Overview of the Main Currency Pairs on 2024.11.04

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0882
• Prev. Close: 1.0834
• % chg. over the last day: -0.44 %

The dollar retreated on Friday and hit a weekly low on the back of a weaker-than-expected US payrolls report for October, which is dovish for Fed policy. US non-farm payrolls for October rose by 12,000, weaker than expectations of 100,000 and the smallest increase in 3 years. In addition, the September data was revised downward to 223,000 from the previously announced 254,000. However, the dollar recovered its losses and moved higher as much of the weak data in the US October ISM payrolls and manufacturing report was attributed to two hurricanes and labor strikes last month. Markets rate the odds of a 25bp rate cut at the November 7 FOMC meeting at 99% and a 50bp rate cut at this meeting at 0%.

Trading recommendations

• Support levels: 1.0848, 1.0842, 1.0811, 1.0787
• Resistance levels: 1.0901, 1.0917, 1.0960, 1.1013

The EUR/USD currency pair’s hourly trend has changed to an upward trend. On Monday, the Dollar Index opened with a downward gap against major currencies. Currently, the price of EUR/USD is trading at the resistance level of 1.0901, and the sellers’ reaction is weak. Buyers dominate the intraday, but the price has deviated strongly from the averages. Under these market conditions, buy trades should be considered either after breaking 1.0991, which would be an aggressive entry, or from the support level at 1.0874, which would be a more conservative entry. Selling can be considered if sellers take the initiative from 1.0901.

Alternative scenario:

if the price breaks the support level of 1.0811 and consolidates below, the downtrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2897
• Prev. Close: 1.2923
• % chg. over the last day: +0.20 %

In the notes analyzing the budget released this week, some economists suggest that the scale of the fiscal expansion announced by Reeves will lead to a slight rise in inflation and a slowdown in the pace of interest rate cuts by the Bank of England; others argue that the Bank of England will ease monetary policy at the same pace, given the decline in service sector inflation. Until the Bank of England meeting on Thursday this week, the pound is likely to remain under pressure.

Trading recommendations

• Support levels: 1.2960, 1.2917, 1.2891
• Resistance levels: 1.2999, 1.2987, 1.3032, 1.3071, 1.3103, 1.3171

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bearish, but close to change. On Monday, the price opened with a gap up. Buyers also prepared a base for further growth in the form of two support zones — below 1.2960 and 1.2917. Currently, the price is trading in front of the priority change level. Since the price has deviated from the average values, it is more conservative to look for a buy entry from 1.2960. A breakout of 1.2999 will open the price to 1.3023.

Alternative scenario:

if the price breaks the resistance level at 1.2999 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 152.08
• Prev. Close: 152.98
• % chg. over the last day: +0.59 %

Political turmoil after Japan’s ruling coalition lost its majority in last weekend’s snap election is likely to force the Bank of Japan to postpone the next interest rate hike until January. However, if the Japanese yen depreciates further against the dollar, the likelihood of a BoJ rate hike in December will increase. Moreover, the probability of another intervention will increase.

Trading recommendations

• Support levels: 151.65, 151.16, 152.00, 150.50, 149.63
• Resistance levels: 152.56, 153.06, 153.58, 154.86

From a technical point of view, the medium-term trend of the USD/JPY currency pair is bullish but close to a shift. The Japanese yen has strengthened to 151.65 and is trading at the level of priority change. Buyers’ reaction is weak. Given that today is a bank holiday in Japan, the price dynamics will be set by the US dollar. Therefore, further weakening of the dollar will lead to a change of priority. A breakdown of 151.64 will open the way to 151.16 and lower. 

Alternative scenario:

 if the price breaks down the support level of 151.64, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2744
• Prev. Close: 2736
• % chg. over the last day: -0.29 %

Analysts attribute the fall in gold prices in recent days to partial profit-taking ahead of the uncertainty of the US presidential election. Prospects of another Trump presidency increase expectations of expansionary fiscal policy and tariff hikes, which will increase inflation risks and, therefore, support precious metals prices. On the other hand, gold could be hit hard if Trump loses the advantage in vote counting on Tuesday and Wednesday.

Trading recommendations

• Support levels: 2737, 2724, 2708, 2704, 2714, 2704, 2667
• Resistance levels: 2761, 2771, 2790, 2800

From the point of view of technical analysis, the trend on the XAU/USD is bullish. Gold’s correction is so deep that the probability of a reversal in the medium term is growing. Currently, the buyers have built a support level at 2737 to keep the price from falling further. Here you can look for buying, but with a short stop loss. A breakdown of 2737 may lead to a sharp sell-off to the level of 2724.

Alternative scenario:

if the price breaks down the support level of 2724, the downtrend will likely resume.