The Analytical Overview of the Main Currency Pairs on 2024.12.12

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: 1.0527
• Prev. Close: 1.0496
• % chg. over the last day: -0.29 %

The European Central Bank (ECB) will hold a monetary policy meeting today. Most economists expect a 25bp rate cut. If this scenario happens, it will be the fourth interest rate cut in the Eurozone since June. Experts believe the ECB will continue to cut rates at the next three meetings to offset the region’s economic weakness. A potential resumption of protectionist policies as a result of Trump’s presidency could put additional downward pressure on the euro, increasing the vulnerability of the currency and its emerging market peers. Therefore, if ECB President Lagarde confirms economists’ projections, a bearish medium-term scenario is projected for the euro.

Trading recommendations

• Support levels: 1.0502, 1.0476, 1.0442
• 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 Tuesday’s low, after which there was a sharp rise to 1.0537, where sellers took the initiative. After the decline, the buyers took the initiative intraday, and now the support level at 1.0502 keeps the price from further decline. Intraday, we can look for buying from this level with a target of 1.0537. A breakdown of 1.0502 will provoke sales to 1.0467.

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: 1.2765
• Prev. Close: 1.2751
• % chg. over the last day: -0.11 %

The UK house price balance exceeded estimates in November. The RICS UK Residential Market Survey, which measures the difference between the percentage of respondents reporting rising prices and those reporting falling prices, jumped to 25% in November 2024. This represents an increase from 16% in October and exceeded market expectations of 19%. The index has improved for four consecutive months and has become the highest since September 2022.

Trading recommendations

• Support levels: 1.2759, 1.2716, 1.2751, 1.2686, 1.2633, 1.2567, 1.2487
• Resistance levels: 1.2781, 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. The price is forming a flat accumulation with the boundaries of 1.2716–1.2781. However, intraday buyers dominate. Under such market conditions, buy trades can be sought from the intermediate level of 1.2759, but with confirmation. A price move below this level could trigger a sharp sell-off to 1.2717.

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: 151.93
• Prev. Close: 152.44
• % chg. over the last day: +0.34 %

Markets are still divided on whether the Bank of Japan (BoJ) will raise interest rates in December or January. Bank of Japan Governor Kazuo Ueda recently suggested that a rate hike may be imminent, citing that economic indicators are in line with expectations. However, BoJ board spokesman Toyoaki Nakamura expressed concerns about the sustainability of wage growth and pointed to signs of economic weakness, adding uncertainty to the outlook. Bloomberg reported that BoJ officials see no point in waiting for an interest rate hike, making it less likely that the BoJ will raise interest rates at its December 19 meeting.

Trading recommendations

• Support levels: 151.94, 151.41, 150.74, 149.42, 149.67, 147.34
• Resistance levels: 153.23, 154.71, 155.25

From a technical point of view, the medium-term trend of the USD/JPY currency pair changed to an uptrend. After the liquidity test below 151.41, the price rose sharply and consolidated above the priority change level. The intraday priority is also behind the bulls. Under these market conditions, intraday buying can be sought with a target of up to 153.23. There are no optimal entry points for selling now.

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: 2692
• Prev. Close: 2717
• % chg. over the last day: +0.92 %

Gold rose to $2,715 per ounce on Wednesday, gaining momentum and extending a two-day rally after a lack of surprises in the form of rising US inflation bolstered bets on an imminent Fed rate cut. Overall inflation rose to 2.7% in November, as markets had expected, while annual core inflation remained unchanged at 3.3%. Consequently, traders increased positions that reflect a 25 bps Fed rate cut next week.

Trading recommendations

• Support levels: 2701, 2684, 2669, 2653, 2627, 2580, 2559, 2471
• Resistance levels: 2721, 2733, 2749

From the point of view of technical analysis, the trend on the XAU/USD is bullish. The gold price reached the resistance level of 2721, after which it impulsively closed below the level, which may be a prerequisite for the beginning of a corrective movement. As long as the price holds above 2701, there is a high probability of growth continuation. The price fixing below 2701 may trigger a sell-off to 2664 and below.

Alternative scenario:

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