The Analytical Overview of the Main Currency Pairs on 2024.12.05

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0507
• Prev. Close: 1.0511
• % chg. over the last day: +0.04 %

The French Parliament backed a vote of no confidence in the government and French Prime Minister Barnier was removed from office in the vote. The collapse of the French government means that President Emmanuel Macron will now face a growing political and economic crisis that risks sending shockwaves throughout the Eurozone. This could put pressure on the European currency in the medium term.

Trading recommendations

• Support levels: 1.0490, 1.0449, 1.0233
• Resistance levels: 1.0545, 1.0568, 1.0609, 1.0654, 1.0714

The EUR/USD currency pair’s hourly trend is bearish. Yesterday, the price tested the liquidity below Wednesday’s low, which was followed by a bullish reaction from buyers. Most likely now, the price is trying to test liquidity above 1.0546, where we can look for selling if sellers react. There are no optimal entry points for buying 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: 1.2668
• Prev. Close: 1.2701
• % chg. over the last day: +0.26 %

The British pound sterling stopped near $1.27 after Bank of England Governor Andrew Bailey hinted at the possibility of four interest rate cuts next year if inflation continues to fall. Speaking in an interview, Bailey confirmed that the Central Bank could cut rates by a total of one percentage point, bringing the key rate to around 3.75%. Markets expect the Bank of England to hold rates steady in December, with a gradual cut to follow next year. Meanwhile, the UK services sector continues to weaken, with employment falling for the second month in a row, albeit at a slower pace.

Trading recommendations

• Support levels: 1.2686, 1.2633, 1.2567, 1.2487
• Resistance levels: 1.2686, 1.2633, 1.2567, 1.2487

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bullish. Yesterday, the price tested the liquidity below Wednesday’s low, after which the buyers took the initiative. Currently, the price is looking to test liquidity above 1.2722. If sellers show a reaction here, it will open up selling opportunities. The support level of 1.2686 can be considered for buying, but also with confirmation.

Alternative scenario:

if the price breaks the support level at 1.2526 and consolidates below, the downtrend will likely resume.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 149.59
• Prev. Close: 150.59
• % chg. over the last day: +0.66 %

BOJ Governor Toyoaki Nakamura urged caution in raising interest rates, emphasizing that small companies may not yet have achieved sufficient profitability to cope with higher borrowing costs. He also expressed concern about the sustainability of wage growth and suggested that inflation may not reach the bank’s 2% target in the next fiscal year starting in April.

Trading recommendations

• Support levels: 149.42, 149.67, 147.34
• Resistance levels: 150.76, 151.96, 153.23, 154.71, 155.25

From a technical point of view, the medium-term trend of the USD/JPY currency pair is a downtrend. After testing liquidity above 150.76, the price returned to the downside. Currently, the price is trying to test the liquidity below 149.42. If the buyers do not react here, a strong sell-off to 147.34 may follow. If the buyers react at 149.42, intraday short buying may be sought.

Alternative scenario:

if the price breaks above the resistance level of 151.95, the uptrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2643
• Prev. Close: 2650
• % chg. over the last day: +0.26 %

Gold held above the $2,640 per ounce mark on Thursday, remaining in a tight trading range. On Wednesday, Fed Chairman Jerome Powell said he believes officials will proceed cautiously as they continue to cut rates and reiterated the resilience of the US economy. These raised the probability of a 25 bps rate cut in December, which is favorable for gold as it reduces the opportunity cost of holding non-interest-bearing assets.

Trading recommendations

• Support levels: 2633, 2580, 2559, 2471
• Resistance levels: 2655, 2667, 2704, 2708, 2733, 2749

From the point of view of technical analysis, the trend on the XAU/USD is bullish. The situation has not changed much compared to yesterday. Volatility on gold is low. The price is forming a narrow corridor inside a wider flat accumulation. Sell trades can be considered from 2655 or from 2667, but with confirmation. There are no optimal entry points for buying right now.

Alternative scenario:

if the price breaks and consolidates below the support level of 2618, the downtrend will likely resume.