The Analytical Overview of the Main Currency Pairs on 2023.07.27

The EUR/USD currency pair

• Prev Open: 1.1048
• Prev Close: 1.1085
• % chg. over the last day: +0.33

The US Fed expectedly raised the rate yesterday by 0.25% to 5.25%, leaving the door open for further hikes. The US Central Bank also signaled that it needs to see new signs of slowing price pressures in order to declare victory over inflation. The European Central Bank (ECB) meets today, where a 0.25% rate hike is also expected. But the focus is on the Central Bank's plans for September, and markets are divided on whether there will be another rate hike, or the ECB will hit the pause button. Given the strong labor market, there is room for the ECB to raise rates further, but ECB chief Christine Lagarde is likely to reiterate that future decisions will be based on incoming economic data.

• Support levels: 1.1072, 1.1001, 1.0958, 1.0925, 1.0866
• Resistance levels: 1.1110, 1.1147, 1.1198, 1.1240, 1.1272, 1.1334

The trend on the EUR/USD currency pair on the hourly time frame is bearish. But yesterday showed the initiative of buyers, after which the price began to trade above the moving averages. The MACD indicator became positive. Under such market conditions, buy trades can be considered from the support level of 1.1072 but with confirmation on the lower time frames. Sell trades can be considered from the resistance level of 1.1110 or 1.1147 but with confirmation in the form of sellers' initiative.

Alternative scenario: if the price breaks through the resistance level of 1.1147 and fixes above it, the uptrend will likely resume.

• – Eurozone ECB Interest Rate Decision at 15:15 (GMT+3);
• – Eurozone ECB Monetary Policy Statement at 15:15 (GMT+3);
• – US Core Durable Goods Orders (m/m) at 15:30 (GMT+3);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+3);
• – US GDP (q/q) at 15:30 (GMT+3);
• – Eurozone ECB Press Conference at 15:45 (GMT+3);
• – US Pending Home Sales (m/m) at 17:00 (GMT+3).

The GBP/USD currency pair

• Prev Open: 1.2900
• Prev Close: 1.2747 1.2941
• % chg. over the last day: +0.32 %

Falling UK consumer prices reduced the pressure on the Bank of England to aggressively raise rates further. Services inflation, a key indicator for the Bank of England, fell last month, which should allow the Bank to return to a slower pace of 0.25% hikes. Unfortunately, the Bank of England has largely shied away from giving clear hints about future policy, but economic models indicate that the country's inflation will continue to fall and the economy will slowly slip into recession, so the Bank of England doesn't have much room to maneuver. The final rate is expected this year in the range of 5.5%-5.75% (2-3 rate hikes of 0.25% from now), so the pound sterling still has more room to grow, unlike the US dollar and the euro.

• Support levels: 1.2862, 1.2802, 1.2762, 1.2646
• Resistance levels: 1.2963, 1.3011, 1.3072, 1.3140, 1.3308

From the technical point of view, the trend on the GBP/USD currency pair on the hourly time frame is bearish but close to change. The price is trading above the levels of moving averages, and the initiative of buyers is present. The MACD indicator is in the positive zone with no signs of reversal. The most optimal level for buying is 1.2862 but with confirmation on the lower time frames. Sell trades are best considered after a false breakout of 1.2963 level but with confirmation in the form of sellers' initiative on the lower time frames.

Alternative scenario: if the price breaks through the resistance level 1.2963 and fixes above it, the uptrend will most likely resume.