The EUR/USD currency pair
- Prev Open: 1.0720
- Prev Close: 1.0665
- % chg. over the last day: -0.51%
Eurozone inflation remained unchanged at 2.4%y/y in April, meeting expectations, while core inflation, which excludes food and energy prices, fell to 2.7% from 2.9% y/y. Meanwhile, the Eurozone economy grew 0.3% in Q1, beating market expectations of 0.1%. This is the strongest growth since Q3 2022, signaling a recovery from a subdued performance since Q4 2022. The US Employment Cost Index for the first quarter rose more than expected, a sign of wage pressure and hawkishness for Fed policy.
- Support levels: 1.0652, 1.0623, 1.0590
- Resistance levels: 1.0689, 1.0727, 1.0756, 1.0795, 1.0843, 1.0865
The trend on the EUR/USD currency pair on the hourly time frame is bearish. The resistance level at 1.0727 did not allow the price to continue moving up, while the support at 1.0689 did not hold, which led to a decline. The price is now trading below the moving averages, with the indicator indicating bearish pressure. Volatility decreased before the FOMC meeting. The support level of 1.0652 can be considered for buying under the condition of a bullish reaction to the liquidity zone below the level. A consolidation below 1.0652 could trigger selling to 1.0623.
Alternative scenario: if the price breaks the resistance level of 1.0752 and consolidates above it, the uptrend will likely resume.
- – US ADP Nonfarm Employment Change (m/m) at 15:15 (GMT+3);
- – US ISM Manufacturing PMI (m/m) at 17:00 (GMT+3);
- – US JOLTs Job Openings (m/m) at 17:00 (GMT+3);
- – US FOMC Statement at 21:00 (GMT+3);
- – US Fed Interest Rate Decision at 21:00 (GMT+3);
- – US FOMC Press Conference at 21:30 (GMT+3).
The GBP/USD currency pair
- Prev Open: 1.2552
- Prev Close: 1.2491
- % chg. over the last day: -0.48 %
The USD is supported by expectations that the FOMC will keep the rate at the current level today and postpone interest rate cuts until late summer or fall. Higher inflation and strong US activity and employment figures have led to a shift in market expectations regarding the timing of the first interest rate cut. Markets now forecast a rate cut of 3 bps by June, 20 bps by September, and 36 bps by December. This is a striking change, considering that just three months ago, the market was fully discounting 150 bps of rate cuts this year from the March FOMC meeting. So if Jerome Powell says that the rate cuts have been pushed to late summer or fall-winter, it will be a major support for the US dollar and a negative for risk assets, including the British currency.
- Support levels: 1.2473, 1.2440, 1.2423, 1.2423, 1.2381, 1.2312
- Resistance levels: 1.2548, 1.2581, 1.2612, 1.2634, 1.2674, 1.2707
From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bullish. The price is correcting amid the dollar strengthening ahead of the FOMC meeting. Indicators point to the pressure of sellers intraday. Evaluating the price reaction to a particular level is important to decide on entering positions. Buying can be considered from the support levels of 1.2473 or 1.2440 if buyers react to one or the other level. There are no optimal entry points for selling now.
Alternative scenario: if the price breaks through the resistance level of 1.2522 and consolidates above it, the uptrend will likely resume.
- – UK Manufacturing PMI (m/m) at 11:30 (GMT+3).
- Prev Open: 156.32
- Prev Close: 157.79
- % chg. over the last day: +0.94 %
- Support levels: 157.23, 156.56, 154.96, 154.54, 153.95
- Resistance levels: 158.20, 160.00
- Prev Open: 2335
- Prev Close: 2285
- % chg. over the last day: 2.18 %
- Support levels: 2314, 2292, 2267, 2249, 2229, 2206
- Resistance levels: 2337, 2350, 2367, 2400
- – US ADP Nonfarm Employment Change (m/m) at 15:15 (GMT+3);
- – US ISM Manufacturing PMI (m/m) at 17:00 (GMT+3);
- – US JOLTs Job Openings (m/m) at 17:00 (GMT+3);
- – US FOMC Statement at 21:00 (GMT+3);
- – US Fed Interest Rate Decision at 21:00 (GMT+3);
- – US FOMC Press Conference at 21:30 (GMT+3).
The USD/JPY currency pair
The Japanese yen slid to 158 per dollar on Wednesday, reversing almost all the gains made on Monday, when the currency rose sharply on suspicions of government intervention. Money market data indicate the finance ministry has spent about $35 billion to prop up the yen. Japanese authorities have not confirmed whether they are behind the currency's recent rise. However, currency diplomat Masato Kanda said they will release the findings at the end of next month and take appropriate action in the foreign exchange market if necessary.
From a technical point of view, the medium-term trend of the currency pair USD/JPY is bullish. The effect of the intervention is quickly disappearing - the price has risen again to 158 yen per dollar. The question now is whether the government will intervene again to support the price. Now, the price is trying to test the area above 158.20. Selling can be considered here, but with confirmation, as this is an intraday level. Buying can be looked for intraday from the moving averages as the market bias remains bullish.
Alternative scenario: if the price breaks and consolidates below the support level of 154.55, the downtrend will likely resume.
The XAU/USD currency pair (gold)
On Tuesday, a stronger dollar and rising global bond yields put pressure on precious metals prices - gold and silver fell to 3-week lows. In addition, a stronger-than-expected first-quarter US labor cost index may keep the Federal Reserve from cutting interest rates and be negative for precious metals. Fund liquidation also depressed gold prices after long positions in gold ETFs fell to a 4-year low on Monday.
From the technical analysis point of view, the trend on the XAU/USD is bearish. The support level of 2314 could not hold the sellers' pressure, so there is room for the price to fall to 2267. Up to this level, you can look for selling from the moving averages. Buying can be considered only after confirmation in the form of buyers' reactions to the demand zone below 2267.
Alternative scenario: if the price breaks and consolidates above the resistance level of 2400, the uptrend will likely resume.
by , 2024.05.01
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