The Analytical Overview of the Main Currency Pairs on 2024.12.10

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0556
• Prev. Close: 1.0553
• % chg. over the last day: -0.03 %

The Eurozone economy continues to show signs of weakness, exacerbated by political uncertainty in France and Germany, as well as geopolitical risks following the election of Donald Trump. Reinforcing the cautious sentiment, ECB President Christine Lagarde warned during a parliamentary hearing of a possible slowdown in Eurozone growth in the coming months, emphasizing that downside risks prevail in the medium term. The ECB is widely expected to cut its key deposit rate by 25 basis points for the fourth time on Thursday, bringing it to 3%. Market participants are now estimating an acceleration in the pace of policy easing, expecting a quarter-point rate cut at each meeting through June. Medium-term for the euro is a negative scenario.

Trading recommendations

• Support levels: 1.0550, 1.0504, 1.0449, 1.0233
• Resistance levels: 1.0615, 1.0654, 1.0714

The EUR/USD currency pair’s hourly trend is bearish. Yesterday, buyers took the initiative after the liquidity test below 1.0550, which opens good opportunities to buy from this level with targets up to 1.0615. Under such market conditions, we can look for buying from 1.0550 to 1.0504. If the price manages to consolidate below 1.0550, then a sharp sell-off to 1.0504 may occur.

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: 1.2738
• Prev. Close: 1.2750
• % chg. over the last day: +0.09 %

British business confidence fell to its lowest level in almost two years after the Labor budget was passed. Businesses are warning that Labor’s budget will lead to higher inflation and slower hiring. The number of vacancies in the UK fell last month at the fastest rate since the pandemic began, according to KPMG.

Trading recommendations

• Support levels: 1.2752, 1.2686, 1.2633, 1.2567, 1.2487
• Resistance levels: 1.2783, 1.2878, 1.2905, 1.2982, 1.3023

From the point of view of technical analysis, the trend on the GBP/USD currency pair is bullish. Yesterday, buyers took the initiative after the liquidity test below Friday’s low. Today, it is best to focus on buying from the support level of 1.2752. The profit target is 1.2783. If the price consolidates below 1.2752, then we should switch to selling to 1.2686.

Alternative scenario:

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

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 150.06
• Prev. Close: 151.21
• % chg. over the last day: +0.77 %

The Japanese yen remained stable at around 150 per dollar on Monday, continuing to trade in a narrow range over the past week. The latest economic data showed that Japan’s economy grew 0.3% quarter-on-quarter in the three months through September, beating the preliminary estimate and market expectations of 0.2%. Combined with stronger-than-expected payroll data released last week, the latest economic data supports a more hawkish view on the Bank of Japan’s monetary policy. However, markets remain divided on the timing of the next rate hike, with some analysts predicting it could come in December and others expecting January.

Trading recommendations

• Support levels: 150.74, 149.42, 149.67, 147.34
• Resistance levels: 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, but the price is moving towards the level of priority change. Yesterday, buyers managed to break through the resistance level of 150.74, and now this level acts as support. Currently, the price is trading in the supply zone above 151.22, where we can look for selling with a target of 150.74, but with confirmation. A price consolidation above 151.22 will open the way to 151.95.

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: 2632
• Prev. Close: 2658
• % chg. over the last day: +0.98 %

Gold rose above $2,640/oz on Monday, driven by its appeal as a safe-haven currency amid renewed geopolitical tensions in the Middle East, as well as renewed gold purchases by China. In addition, the US jobs report released on Friday indicated a gradual softening of labor market conditions, which increased the likelihood of a rate cut by the Federal Reserve. According to the CME FedWatch tool, markets now estimate the probability of a 25bp rate cut at the Fed’s last meeting of the year at 83%. This will lower the opportunity cost of owning a non-interest-bearing asset, making it more attractive.

Trading recommendations

• Support levels: 2665, 2653, 2627, 2580, 2559, 2471
• Resistance levels: 2676, 2704, 2708, 2733, 2749

From the point of view of technical analysis, the trend on the XAU/USD is bullish. Yesterday, buyers managed to break important resistance levels, and now the intraday bias is bullish. For buying, it is best to consider the support levels 2665 or 2654, but with confirmation. Selling should be cautious. A breakout of 2665 will open the price to 2654, but these are more intraday moves.

Alternative scenario:

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