The Analytical Overview of the Main Currency Pairs on 2024.12.16

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev. Open: +0.30 %
• Prev. Close: 1.0503
• % chg. over the last day: +0.30 %

On Friday, the euro recovered from the low of the week and showed moderate growth. However, the Bundesbank’s actions in lowering Germany’s 2024 GDP estimate and inflation prognosis, as well as weaker-than-expected October German exports, are dovish factors for ECB policy and negative for the euro. In addition, ECB spokesman Villeroy de Galhau noted that there will be more rate cuts next year. Thus, a downward scenario is formed for the euro in the medium term.

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. On Friday, the price tested the support level of 1.0460, where the buyers showed initiative. However, since the main pool of liquidity below 1.0425 was not reached, there is still a high probability of another downward movement. For selling, we can consider the upper boundary of the expanding triangle or the resistance zone above 1.0537. There are no optimal entry points for buying 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: 1.2670
• Prev. Close: 1.2619
• % chg. over the last day: -0.40 %

The British pound fell to $1.26, nearing six-month lows, after key UK economic data disappointed. GDP unexpectedly contracted by 0.1% in October (expecting growth of +0.1%), matching the fall in September, highlighting the challenges the government faces in achieving its goal of making the UK the fastest-growing economy in the G7. In addition, industrial and manufacturing output fell, contrary to thoughts predicting growth. The Bank of England (BoE) is expected to keep interest rates unchanged this week and take a cautious approach in 2025, with markets expecting only three moderate rate cuts before the end of 2025.

Trading recommendations

• Support levels: 1.2617, 1.2589, 1.2467
• Resistance levels: 1.2679, 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 has changed to a bearish one. The price has consolidated below the priority change level and is confidently trading below the moving average lines. Currently, the price has hit the support at 1.2617, but the reaction of buyers here is weak. The price consolidation below 1.2617 may provoke a sell-off to 1.2589 and below. The moving average lines or the upper boundary of the trend channel can be considered for selling.

Alternative scenario:

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

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev. Open: 152.61
• Prev. Close: 153.63
• % chg. over the last day: +0.67 %

The Japanese yen posted its longest losing streak against the dollar since June as traders bet that the Bank of Japan will refrain from raising interest rates this week. Over the past two weeks, the probability of a rate hike scenario has fallen from 64% to 16%. The Bank of Japan (BoJ) decision comes a day after the Fed is widely expected to cut its benchmark rate by a quarter point. Economists believe that if the Fed cuts rates, hinting at a pause next year, the yen could weaken to 156 per US dollar.

Trading recommendations

• Support levels: 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. The price has consolidated above 153.23 and now the road to 154.71 is open. Intraday priority is for the buyers. Under these market conditions, intraday buying from the moving averages or from the 154.25 support level can be sought. There are no optimal entry points for selling now.

Alternative scenario:

if the price breaks and consolidates below the 151.00 support, the downtrend will likely resume.

The XAU/USD currency pair (gold)

Technical indicators of the currency pair:

• Prev. Open: 2680
• Prev. Close: 2648
• % chg. over the last day: -1.21 %

Gold fell to below $2650 per ounce, pulling back from earlier gains amid uncertainty over the extent of Fed rate cuts next year. Bullion prices fell after US factory spending rose much faster than expected in November, adding to fears of intractable inflation. Nevertheless, the dovish performance of major central banks gave gold prices enough support to set themselves up for a small weekly rise. Traders are still of the opinion that the Fed will cut the rate by 25 bps at its December meeting.

Trading recommendations

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

From the point of view of technical analysis, the trend on the XAU/USD is bullish. However, the intraday trend is behind the sellers. On Friday, the price declined to the support level of 2645, where buyers showed a reaction. This initiative, though, may not be enough to resume the upward movement. Therefore, there is a high probability that the price is about to form a flat accumulation here. For buying, we can use the level of 2645 but with confirmation. For selling, there are no optimal entry points 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.