The Analytical Overview of the Main Currency Pairs on 2024.12.17

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0489
• Prev. Close: 1.0511
• % chg. over the last day: +0.21 %

Eurozone flash PMIs indicated a slowdown in private sector activity thanks to a rebound in the services sector, while manufacturing activity remained subdued. Political uncertainty is also weighing on the euro, with the German Chancellor losing a vote of confidence in parliament as expected, paving the way for snap elections early next year. In France, the new government faces the challenge of passing a budget for 2025. On the monetary front, the Fed is expected to cut rates by 25 bps this week, signaling a slower pace of rate cuts in 2025. 

Trading recommendations

• Support levels: 1.0482, 1.0460, 1.0425
• Resistance levels: 1.0537, 1.0565, 1.0615, 1.0654, 1.0714

The EUR/USD currency pair’s hourly trend is bearish. Yesterday, the price tested the liquidity below the support level of 1.0482, where the buyers showed initiative. However, since the main pool of liquidity below 1.0425 was not reached, there remains a high probability of another downside move. For selling, the current levels or the resistance zone above 1.0537 can be considered. For buying, there are no optimal entry points right now.

Alternative scenario:

if the price breaks the resistance level of 1.0609 and consolidates above it, the uptrend will likely resume.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.2611
• Prev. Close: 1.2683
• % chg. over the last day: +0.57 %

At Thursday’s meeting, the British Central Bank is expected to leave rates unchanged at 4.75% and maintain its guidance that a gradual approach to removing policy constraints remains appropriate. Although Bank of England Governor Andrew Bailey said recently that four rate cuts are likely over the course of 2025. However, things could change as incoming US President Donald Trump threatens a global trade war, and domestically, the Labor government’s first October budget has worsened consumer sentiment.

Trading recommendations

• Support levels: 1.2679, 1.2669, 1.2617, 1.2589, 1.2467
• Resistance levels: 1.2717, 1.2748, 1.2786, 1.2878, 1.2905, 1.2982

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bearish. The pound price immediately showed a correction from the support level of 1.2619. However, since the main pool of liquidity below 1.2588 was not reached, there is still a high probability of another downward movement. Currently, the price has settled in the support zone at 1.2669–1.2679, but the reaction of buyers here is weak. A price consolidation below 1.2669 could trigger a sell-off to 1.2589 and lower. Buying could also be considered if the price reacts to the support at 1.2669.

Alternative scenario:

if the price breaks through the resistance level at 1.2789 and consolidates above it, the uptrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 153.59
• Prev. Close: 154.14
• % chg. over the last day: +0.36 %

Traders almost wiped out all chances of a 25 basis points rate hike at the December BoJ meeting after reports that the Central Bank sees “negligible costs” in delaying further tightening. BoJ officials said they want to see more evidence of wage growth before proceeding with additional policy adjustments. At the same time, some policymakers said the risk that a weaker yen will spur inflation is becoming less of an issue.

Trading recommendations

• Support levels: 153.98, 153.25, 152.45, 151.94, 151.41, 151.00, 150.74
• Resistance levels: 154.71, 155.25

From a technical point of view, the medium-term trend of the USD/JPY currency pair is bullish. On Friday, the price consolidated above 153.23, which opened the way to 154.71. Intraday priority is for the buyers. With these market conditions, intraday, traders can look for buying from the moving averages or from the support level at 153.98. There are no optimal entry points for selling right now. However, given the accumulative MACD divergence from 154.71, a sharp sell-off could occur.

Alternative scenario:

if the price breaks and consolidates below the 151.94 support, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2648
• Prev. Close: 2653
• % chg. over the last day: +0.19 %

According to S&P Global, the US services sector grew much faster than expected in December, lowering expectations of a rate cut next year. Evidence of the resilience of the US economy supports expectations that the Fed will limit rate cuts next year, which could put further pressure on bullion demand. However, it is worth noting that the People’s Bank of China (PBoC) is expected to ease its monetary policy next year and has returned to buying gold after a six-month pause, which is positive for gold.

Trading recommendations

• Support levels: 2645, 2627, 2580, 2559, 2471
• Resistance levels: 2664, 2673, 2693, 2700, 2721, 2733, 2749

From the point of view of technical analysis, the trend on the XAU/USD is bullish. On Friday, the price declined to the support level of 2645, where buyers showed a reaction. Currently, a flat accumulation is forming, where the intermediate level 2645 acts as resistance. For buying, we can use the level of 2645 again but with confirmation in the form of another liquidity test below. There are no optimal entry points for selling now. However, if the price consolidates below 2645, a sell-off to the level of 2627 is possible.

Alternative scenario:

if the price breaks and consolidates below the support level of 2627, the downtrend will likely resume.