. Daily Forex Analysis - AUD/USD Hold Gains and USD/CHF Weakens

Daily Forex Analysis – AUD/USD Hold Gains, USD/CHF Weakens

Daily Forex Analysis – AUD/USD Hold Gains, USD/CHF Weakens

15 May 2024

Introduction

Financial markets hold their breath ahead of key US inflation data. The Pound Sterling (GBP) treads water near 1.2590, while the Euro (EUR) eyes gains above 1.08. Investors await the US CPI report, with a hotter-than-expected reading potentially boosting the Dollar (USD) and derailing hopes of a Fed rate cut. The Australian Dollar (AUD) finds support amid improved risk appetite, and USD/CHF weakens on a softer USD.

Markets In Focus Today – GBP/USD

GBP/USD consolidates its gains above 1.2580, all eyes on US CPI data.

GBP/USD takes a breather near 1.2590 in Wednesday’s early Asian session. The US PPI came in line with expectations, rising by 2.2% YoY in April, compared to the 1.8% increase in March. The UK Unemployment Rate rose to 4.3%, and private-sector wage growth slowed. The GBP/USD pair consolidates its gains around 1.2590 during the early Asian session on Wednesday. The major pair holds above the key 100-day Exponential Moving Average (EMA) but remains capped under the 1.2600 hurdle. The US Consumer Price Index and Retail Sales report for April will be in the spotlight. Also, the Fed’s Kashkari and Bowman are due to speak.Investors await the US CPI inflation data on Wednesday for fresh impetus. The hotter-than-expected inflation reading could dampen hope for a Fed rate cut this year and boost the Greenback against the Pound Sterling (GBP). On the other hand, the UK employment reports showed signs of cooling, which prompted the expectation that the Bank of England (BoE) might cut interest rates in the coming months.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2545 | Positive Crossover | Bullish
  • MA 20 : 1.2535 | Positive Crossover | Bullish
  • MA 50 : 1.2563 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2542 | Positive Crossover | Bullish
  • MA 20 : 1.2503 | Positive Crossover | Bullish
  • MA 50 : 1.2590 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 56.9210 | Buy Zone | Bullish

Stochastic   Oscillator : 100.00 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.2657 R2 : 1.2754
  • S1 : 1.2345 S2 : 1.2248

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Stop Buy : 1.2606 | Take Profit : 1.2674 | Stop Loss : 1.2562

EUR/USD

EUR/USD holds above 1.0800 ahead of Eurozone GDP, according to US CPI data.

EUR/USD gains momentum 1.0815 on Wednesday. Fed’s Schmid said inflation remains too high and the US central bank has more work to do.The Eurozone ZEW Economic Sentiment Survey came in better than expected, improving to 47.0 in May, compared to 43.9 prior. The EUR/USD pair trades with a bullish bias around 1.0815 during the early Asian trading hours on Wednesday. Markets might turn to a cautious mood later in the day ahead of key economic data from the Eurozone and the US. The first reading of the Eurozone Gross Domestic Product (GDP) for the first quarter and the US April Consumer Price Index (CPI) will be the highlights on Wednesday. However, the US CPI data is due later in the day, and it might influence the Fed interest rate decision in the next meeting. The annual headline CPI inflation is expected to ease to 3.4% in April from 3.5% in the previous reading. The Core CPI inflation is projected to drop to 3.6% in April from 3.8% prior. If the forthcoming CPI data meets expectations, it could trigger the prospect of rate cuts. This, in turn, might drag the Greenback lower and act as a tailwind for EUR/USD.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0777 | Positive Crossover | Bullish
  • MA 20 : 1.0758 | Positive Crossover | Bullish
  • MA 50 : 1.0771 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0774 | Positive Crossover | Bullish
  • MA 20 : 1.0730 | Positive Crossover | Bullish
  • MA 50 : 1.0784 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 61.4801 | Buy Zone | Bullish

Stochastic   Oscillator : 100 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.0826 R2 : 1.0893
  • S1 : 1.0609 S2 : 1.0542

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.0800 | Take Profit : 1.0864 | Stop Loss : 1.0767

AUD/USD

Australian Dollar remains firmer on improved risk appetite, US CPI eyed.

The Australian Dollar appreciates due to the improved risk sentiment on Wednesday.The Australian government is targeting headline inflation and seeking to ease cost-of-living pressures by earmarking billions in funding.The US Dollar lost ground as investors digested higher-than-expected US PPI data.The Australian Dollar (AUD) remains steady with a positive sentiment despite the lower-than-expected Wage Price Index (Q1) released on Wednesday by the Australian Bureau of Statistics. This index serves as an indicator of labor cost inflation. The appreciation of the Aussie Dollar could be attributed to the improved risk appetite. The Australian Budget for 2024-25 has returned to a deficit after recording a surplus of $9.3 billion in 2023-24. The Australian government aims to tackle headline inflation and alleviate the cost of living pressures by allocating billions to reduce energy bills and rent, alongside initiatives to lower income taxes.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6600 | Positive Crossover | Bullish
  • MA 20 : 0.6571 | Positive Crossover | Bullish
  • MA 50 : 0.6552 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6607 | Positive Crossover | Bullish
  • MA 20 : 0.6547 | Positive Crossover | Bullish
  • MA 50 : 0.6546 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 61.4225 | Buy Zone | Bullish

Stochastic   Oscillator : 95.89 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.6602 R2 : 0.6668
  • S1 : 0.6386 S2 : 0.6320

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Stop Buy : 0.6648 | Take Profit : 0.6721 | Stop Loss : 0.6600

USD/CHF

USD/CHF extends losses to near 0.9050 ahead of US inflation data.

USD/CHF edges lower due to a decline in the US Dollar and lower US yields.Fed Chair Jerome Powell has anticipated a sustained decrease in inflation, indicating diminished confidence in the disinflation outlook.Swiss Producer and Import Prices dropped 1.8% in April, marking the twelfth consecutive period of decrease.USD/CHF edges lower for the second successive session, trading around 0.9060 during the Asian hours on Wednesday. The decline of the USD/CHF pair could be attributed to the weaker US Dollar (USD) as investors shrugged off the higher-than-expected US Producer Price Index data for April. Investors will likely await the Consumer Price Index report scheduled for Wednesday. Furthermore, traders are expected to closely monitor Industrial Production (YoY) for the first quarter, scheduled for release on Friday. This report will provide insights into the volume of production across industries such as factories and manufacturing in Switzerland.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.9074 | Negative Crossover | Bearish
  • MA 20 : 0.9078 | Negative Crossover | Bearish
  • MA 50 : 0.9019 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.9067 | Negative Crossover | Bearish
  • MA 20 : 0.9099 | Negative Crossover | Bearish
  • MA 50 : 0.9022 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 46.7537 | Neutral Zone | Neutral

Stochastic   Oscillator : 21.67 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.9201 R2 : 0.9248
  • S1 : 0.9051 S2 : 0.9004

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Stop Sell : 0.9038 | Take Profit : 0.8948 | Stop Loss : 0.9112

Elsewhere In The Forex Market

USD/CAD down 0.12% to 1.3635, The NZD/USD up 0.31% to 0.6060. The EUR/GBP up 0.7% at 0.8599. EUR/AUD down 0.15% at 0.6300. AUD/NZD down 0.06% at 1.0963, The USD/CNY down 0.15% at 7.2217, AUD/SEK up 0.05% at 7.1649, at the time of writing.

Key Economic Events & Data Release Today:

(EUR) GDP (YoY) (Q1) Forecast 0.4%, Previous 0.1% at 14:30. (EUR) Industrial Production (MoM) (Mar) Forecast 0.5%, Previous 0.8% at 14:30. (USD) Core Retail Sales (MoM) (Apr) Forecast 0.2%, Previous 1.1% at 18:00. (USD) Retail Sales (MoM) (Apr) Forecast –0.4%, Previous 0.7% at 18:00. (USD) CPI (MoM) (Apr) Forecast 0.4%, Previous 0.4% at 18:00. (USD) Core CPI (MoM) (Apr) Forecast 0.3%, Previous 0.4% at 18:00. (USD) CPI (YoY) (Apr) Forecast 3.4%, Previous 3.5% at 18:00.