. Daily Forex Analysis - AUD/USD hold steady ahead of US labor data.

Daily Forex Analysis – AUD/USD hold steady ahead of US labor data.

Daily Forex Analysis – AUD/USD hold steady ahead of US labor data.

07 Jun 2024

Introduction

The Euro and Pound Sterling hold steady near 1.0900 and 1.2800 respectively, ahead of key US labor data. The ECB raised rates as expected, but comments from policymakers dampen Euro gains. Investors await US Nonfarm Payrolls (NFP) for May, to gauge the health of the US economy and future Fed rate cuts. The Japanese Yen and Australian Dollar consolidate before NFP, with the AUD finding support from China’s trade data.

Markets In Focus Today – EUR/USD

EUR/USD holds ground near 1.0900, focus shifts to US NFP data.

EUR/USD is trading close to 1.0900, slightly on the front foot early Friday. The pair capitalizes on a risk-on market environment, as markets cheer Thursday’s rate cut decision by the ECB, which ramped up expectations of a Sept Fed rate cut. All eyes remain on the US NFP data. EUR/USD registered small gains on Thursday and stabilized at around 1.0900 in the early European session on Friday. May labor market data from the US could ramp up the market volatility heading into the weekend. The European Central Bank (ECB) announced on Thursday that it raised its key rates by 25 basis points following the June policy meeting, as expected. In the post-meeting press conference, ECB President Christine Lagarde refrained from confirming additional rate cuts and reiterated the data-dependent approach moving forward. Early Friday, several ECB policymakers adopted a cautious tone on further easing but voiced their optimism about the inflation outlook, making it difficult for the Euro to find direction.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0867 | Positive Crossover | Bullish
  • MA 20 : 1.0844 | Positive Crossover | Bullish
  • MA 50 : 1.0815 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0863 | Positive Crossover | Bullish
  • MA 20 : 1.0852 | Positive Crossover | Bullish
  • MA 50 : 1.0780 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 60.2388 | Buy Zone | Bullish

Stochastic   Oscillator : 50.00 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.0890 R2 : 1.0948
  • S1 : 1.0703 S2 : 1.0645

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.0881 | Take Profit : 1.0952 | Stop Loss : 1.0842

GBP/USD

Pound Sterling trades stuck in tight range as US NFP data looms.

The Pound Sterling trades sideways near 1.2800 against the US Dollar ahead of the US NFP data for May.US NFP will significantly influence expectations for Fed interest-rate cuts in September.The UK’s strong wage growth remains a major driver of stubborn service inflation.The Pound Sterling (GBP) consolidates in a tight range near 1.2800 against the US Dollar (USD) in Friday’s European session. The GBP/USD pair struggles for a direction as investors await the United States (US) Nonfarm Payrolls (NFP) report for May, which will provide new clues about the health of the country’s labor market. Investors will also focus on the UK Average Earnings data, a measure of wage growth. UK’s strong wage growth momentum has remained a major driver to high service inflation, which has been a barrier for price pressures in returning towards the 2% target.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2762 | Positive Crossover | Bullish
  • MA 20 : 1.2717 | Positive Crossover | Bullish
  • MA 50 : 1.2655 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2765 | Positive Crossover | Bullish
  • MA 20 : 1.2721 | Positive Crossover | Bullish
  • MA 50 : 1.2600 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 64.5435 | Buy Zone | Bullish

Stochastic   Oscillator : 81.8625 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.2798 R2 : 1.2882
  • S1 : 1.2527 S2 : 1.2443

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Stop Buy : 1.2803 | Take Profit : 1.2882 | Stop Loss : 1.2755

USD/JPY

Japanese Yen consolidates, while US Dollar remains steady before NFP.

The Japanese Yen moves sideways as investors turn cautious ahead of the US NFP.Japan’s Foreign-exchange reserves fell to $1,231 billion in May, marking the lowest level since February 2023.The US Dollar struggles due to rising hopes for two interest rate cuts by the Fed in 2024.The Japanese Yen (JPY) consolidates on Friday following the Japanese Foreign Reserves released by the Ministry of Finance for May, dropping significantly to $1,231 billion in May from $1,279 billion. This has marked the lowest level since February 2023, as the government conducted foreign exchange intervention operations to defend the JPY. Japanese Finance Minister Shunichi Suzuki stated on Friday that he will take action against excessive currency volatility when necessary and will assess the effectiveness of intervention. Suzuki emphasized the importance of maintaining market trust in public finances, mentioning that there is no fund limit for FX intervention, according to Reuters.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 156.0345 | Negative Crossover | Bearish
  • MA 20 : 155.9830 | Negative Crossover | Bearish
  • MA 50 : 154.7356 | Positive Crossover | Bullish

Simple :

  • MA 10 : 156.3686 | Negative Crossover | Bearish
  • MA 20 : 156.2470 | Negative Crossover | Bearish
  • MA 50 : 154.9317 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 48.1562 | Neutral Zone | Neutral

Stochastic   Oscillator : 36.4471 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 158.0528 R2 : 159.4982
  • S1 : 153.3732 S2 : 151.9278

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 155.88 | Take Profit : 153.95 | Stop Loss : 157.32

AUD/USD

Australian Dollar holds gains after China’s Trade Surplus, awaits NFP.

The Australian Dollar gained ground as trade partner China’s Trade Surplus widened to $82.62 billion in May.The Australian equity market appreciates with higher mining and energy stocks due to stronger commodity prices.The US Dollar struggles as the lower US labor data sparks hopes for two interest rate cuts by the Fed in 2024.The Australian Dollar (AUD) edges higher following China’s Trade Balance data release on Friday. The National Bureau of Statistics of China reported that Trade Surplus widened to $82.62 billion year-over-year in May, surpassing the expected balance of $73.00 billion and the previous balance of $65.55 billion. Any change in China’s economy could impact the Australian market as both countries are close trade partners. AUD traders are likely to await the speech by Andrew Hauser, Deputy Governor of the Reserve Bank of Australia (RBA), on Australia’s economic outlook later in the day. Attention will also turn toward US employment data releases, including Average Hourly Earnings and Nonfarm Payrolls.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6654 | Positive Crossover | Bullish
  • MA 20 : 0.6638 | Positive Crossover | Bullish
  • MA 50 : 0.6602 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6652 | Positive Crossover | Bullish
  • MA 20 : 0.6649 | Positive Crossover | Bullish
  • MA 50 : 0.6576 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 57.1189 | Buy Zone | Bullish

Stochastic   Oscillator : 61.9930 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 0.6706 R2 : 0.6764
  • S1 : 0.6515 S2 : 0.6457

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Stop Buy : 0.6688 | Take Profit : 0.6755 | Stop Loss : 0.6648

Elsewhere In The Forex Market

NZD/USD down 0.15% to 0.6189, The USD/CAD up 0.05% to 1.3676. The EUR/GBP down 0.01% at 0.8511. EUR/AUD down 0.01% at 1.6333. AUD/NZD up 0.19% at 1.0773, The USD/CNY down 0.02% at 7.2429, AUD/SEK down 0.19% at 6.9133, at the time of writing.

Key Economic Events & Data Release Today:

(EUR) GDP (QoQ) (Q1) Forecast 0.3%, Previous 0.0% at 14:30. (USD) Average Hourly Earnings (MoM) (May) Forecast 0.3% Previous 0.2% at 18:00. (USD) Nonfarm Payrolls (May) Forecast 182K, Previous 175K at 18:00. (USD) Unemployment Rate (May) Forecast 3.9%, Previous 3.9% at 18:00. (CAD) Employment Change (May) Forecast 24.8K, Previous 90.4K at 18:00. (EUR) ECB President Lagarde Speaks at 19:45.