The EUR/USD currency pair
- Prev Open: 1.0777
- Prev Close: 1.0806
- % chg. over the last day: +0.26 %
On Tuesday, the dollar index hit a 2-week low because of declining T-note yields. In addition, the strengthening euro had a negative impact on the dollar on Tuesday as strong economic news from the eurozone pushed EUR/USD to a 2-week high. The dollar extended its losses after Tuesday's economic news showed that US leading indicators for January fell more than expected. Today, the US will release the minutes of the January FOMC meeting. At the January 30-31 meeting, policymakers left borrowing costs unchanged, indicating that a rate cut at the upcoming March meeting is unlikely. Therefore, the minutes will likely reference strong US GDP data and a robust labor market. In such a scenario, the dollar index may get temporary support.
- Support levels: 1.0793, 1.0761, 1.0704, 1.0684
- Resistance levels: 1.0816, 1.0860
The trend on the EUR/USD currency pair on the hourly time frame has changed upward. The price trades above the moving averages and has consolidated above the priority change level. The MACD indicator is in the positive zone with no signs of reversal. Given that the FOMC minutes will be released today, a spike in volatility is expected. It is best to buy after testing liquidity below 1.0793. There are no optimal entry points for selling right now.
Alternative scenario: if the price breaks the support level of 1.0761 and consolidates below, the downtrend will likely resume.
- – US FOMC Member Bostic Speaks at 15:00 (GMT+2);
- – US FOMC Member Bowman Speaks at 20:00 (GMT+2);
- – US FOMC Meeting Minutes at 21:00 (GMT+2).
The GBP/USD currency pair
- Prev Open: 1.2587
- Prev Close: 1.2621
- % chg. over the last day: +0.27 %
March is the end of the 4th fiscal quarter for the UK. This is when the government plans for upcoming spending and often creates cyclical currency price movements. Currently, selling pressure on the British pound is usually in the forex market. In addition, the crisis in the Red Sea, involving attacks on cargo ships and forcing shippers to take longer routes in the area, has already slowed imports to parts of Europe. Given that the UK is an island, it relies heavily on imports.
- Support levels: 1.2582, 1.2560, 1.2538, 1.2499
- Resistance levels: 1.2660, 1.2683, 1.2750, 1.2827
From the point of view of technical analysis, the trend on the GBP/USD currency pair on the hourly time frame is bearish. Yesterday, the price tested the resistance level at 1.2660, where sellers showed a reaction. With the price not reacting to the buyers' hollow zone, there is a high probability of a decline to 1.2582, where we need to observe the reaction of the buyers. Hence, selling can be sought intraday with a target of 1.2582. Buying is best considered after a liquidity test below 1.2582, subject to buyers' reactions.
Alternative scenario: if the price breaks the resistance level at 1.2683 and consolidates above it, the uptrend will likely resume.
- Prev Open: 150.13
- Prev Close: 149.99
- % chg. over the last day: -0.09 %
- Support levels: 149.68, 148.92, 148.25, 147.67, 148.81
- Resistance levels: 150.43, 150.91, 151.90
- – Japan Trade Balance (m/m) at 01:50 (GMT+2).
- Prev Open: 2017
- Prev Close: 2042
- % chg. over the last day: +1.24 %
- Support levels: 2025, 2007, 1995, 1989
- Resistance levels: 2044, 2062, 2069, 2084, 2090
- – US FOMC Member Bostic Speaks at 15:00 (GMT+2);
- – US FOMC Member Bowman Speaks at 20:00 (GMT+2);
- – US FOMC Meeting Minutes at 21:00 (GMT+2).
The USD/JPY currency pair
On Tuesday, the yen rose against the dollar thanks to the decline in T-note yields. The yen also found support in ideas that the Japanese government may intervene to support the yen after Finance Minister Suzuki said the government will continue to keep a close eye on the currency market.
From the technical point of view, the medium-term trend on the currency pair USD/JPY is bullish. The price retested the support level at 149.68 without updating the previous price high. These are signs of buyers' weakness. Given that the FOMC minutes will be released today, the yen may correct even lower amid the temporary strengthening of the US dollar. Therefore, it is best to look for intraday buying with confirmation from buyers' reactions. There are no optimal entry points for selling right now.
Alternative scenario: If the price consolidates below the support level at 149.27, the downtrend will likely resume.
The XAU/USD currency pair (gold)
The decline in the dollar index to a 2-week low on Tuesday was a favorable factor for metal prices. In addition, Tuesday's decline in global bond yields supported precious metals. On the negative side, precious metals lost some of last week's impact after stronger-than-expected reports on the producer and consumer prices for January in the US dampened expectations of a Fed rate cut. Therefore, today, on the FOMC minutes, the dollar may get temporary support, putting short-term pressure on gold and silver.
From the point of view of technical analysis, the trend on the XAU/USD has changed to an upward one. The price is trading above the moving averages, breaking through the priority change level. Now, the way is open to 2044, but the price might make a false breakdown to grab more liquidity for the rally. Therefore, buying is best considered from the support level 2025 if buyers react. There are no optimal entry points for selling right now.
If the price breaks below the support level in 1995, the downtrend will likely resume.
by , 2024.02.21
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