FOREX Technical Analysis as of May 10, 2024


Read in today’s overview:

EUR/USD Technical Analysis as of May 10, 2024

The EUR/USD pair bounced back from its losses by the week's end, prompted by a weakened US dollar.

Possible technical scenarios:

The daily chart of the EUR/USD reveals a rebound from the support level at 1.0723, marked with a dotted line, with the next upward target being the resistance at 1.0812, toward which the pair still has some room for movement.


Fundamental drivers of volatility:

The US dollar's decline towards the week's end facilitated EUR/USD's recovery. With limited news from the euro area, the US currency's dynamics served as the primary catalyst for the pair's volatility throughout the week.
Following a previously weak labor market report, Thursday's data revealed higher-than-expected jobless claims. These developments heighten expectations of a Fed interest rate cut in September, consequently weakening the dollar.

Intraday technical picture:

According to the 4H chart of the EUR/USD, a bullish flag pattern emerged within the range between 1.0723 and 1.0812. This pattern suggests a potential breakout above the 1.0812 level, paving the way for consolidation.


GBP/USD Technical Analysis as of May 10, 2024

The GBP/USD pair experienced an uptick towards the week's end, buoyed by a combination of a weakening dollar and positive economic indicators from the UK.

Potential technical scenarios:

As evidenced by the daily chart, the GBP/USD pair recovered from losses, surpassing the 1.2500 level once again. Consequently, the immediate target for further growth is the resistance level at 1.2608.


Fundamental drivers of volatility:

Towards the week's end, UK data favored the pound. Friday's first-quarter GDP report surpassed expectations, indicating the economy's recovery from recession.
Additionally, the Bank of England kept interest rates unchanged at 5.25% on Thursday, with two members of the Monetary Policy Committee voting for a rate cut. Andrew Bailey, Governor of the Bank of England, also hinted at potential monetary policy easing in the next meeting if economic indicators remain positive.
Despite dovish signals from the UK, the pound found support in a weaker US dollar, prompted by increasing unemployment claims, which raised speculation of a Fed rate cut.

Intraday technical picture:

Judging by the unfolding situation on the 4H chart, the GBP/USD pair consolidates above the 1.2500 level amidst a favorable fundamental backdrop. A growth scenario towards the 1.2608 resistance level appears likely, with considerable room for price movement.


USD/JPY Technical Analysis as of May 10, 2024

The Japanese yen remains subdued, contributing to the ascent of USD/JPY amid a robust US dollar performance this week.

Possible technical scenarios:

Analyzing the daily chart, USD/JPY has transitioned into consolidation above the 154.83 level that was broken out. Aside from that, the price has solidified its position above the psychological threshold of 155 yen per dollar, paving the way for resistance at 157.10.


Fundamental drivers of volatility:

USD/JPY has been under market players’ spotlight for weeks due to the pronounced depreciation of the Japanese currency. Japanese authorities and monetary officials have issued frequent warnings regarding their readiness for currency interventions, with reports indicating intervention twice last week.
However, the substantial interest rate differential between the US and Japan continues to exert downward pressure on the yen. Despite intervention efforts, the impact remains short-lived against the backdrop of interest rate divergence, sustaining the strength of the US dollar against the yen.

Intraday technical picture:

As we can see on the 4H chart, the USD/JPY pair is consolidating above the 155 yen per dollar mark. From a technical perspective, there is still ample room for the price to approach the nearest resistance level at 157.10.


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