. Daily Forex Analysis- AUD/USD, USD/CAD await US CPI, Fed decision.

Daily Forex Analysis- AUD/USD, USD/CAD await US CPI, Fed decision.

Daily Forex Analysis- AUD/USD, USD/CAD await US CPI, Fed decision.

12 Jun 2024

Introduction

Markets await key US CPI data and the Federal Reserve’s policy decision, impacting various currency pairs. EUR/USD consolidates around mid-1.0700s after recent losses, while GBP/USD hovers near 1.2750. The Australian Dollar shows modest gains, supported by RBA’s hawkish stance. USD/CAD trades slightly lower, with traders anticipating more cues from upcoming US inflation figures and the Fed’s rate path.

Markets In Focus Today – EUR/USD

EUR/USD bears await US CPI and Fed decision before placing fresh bets.

The EUR/USD pair oscillates in a narrow range during the Asian session on Wednesday and consolidates its losses registered over the past three days, to the 1.0720 area, or the lowest level since early May touched the previous day. Spot prices currently trade just below mid-1.0700s, nearly unchanged for the day, as traders await the release of the US consumer inflation figures and the crucial FOMC decision before placing fresh directional bets. Heading into the key data/event risks, diminishing odds for an imminent rate cut by the Federal Reserve (Fed) in September assist the US Dollar (USD) to stand tall near a one-month peak touched on Tuesday. The shared currency, on the other hand, is undermined by the fact that Eurosceptic nationalists registered the biggest gains in European Parliament elections in the Sunday vote. Adding to this, French President Emmanuel Macron’s decision to call snap elections later this month increases political uncertainty in the Eurozone’s second-largest economy and contributes to capping the EUR/USD pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0804 | Negative Crossover | Bearish
  • MA 20 : 1.0813 | Negative Crossover | Bearish
  • MA 50 : 1.0805 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0827 | Negative Crossover | Bearish
  • MA 20 : 1.0836 | Negative Crossover | Bearish
  • MA 50 : 1.0776 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 40.0253 | Neutral Zone | Neutral

Stochastic   Oscillator : 13.2632 | Sell Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 1.0768 | Take Profit : 1.0722 | Stop Loss : 1.0804

GBP/USD

GBP/USD Hovers around 1.2750 ahead of UK GDP.

GBP/USD keeps its range near 1.2750 early Wednesday, paying little heed to the mixed UK GDP and Industrial Output data. Markets turn cautious ahead of the key US inflation data and the Fed policy announcements, leaving the pair on the edge. The stronger US employment report last week dampened the expectation that the US Federal Reserve (Fed) will start cutting interest rates in September. Nonetheless, a softer-than-expected inflation report might influence Fed Chair Jerome Powell to maintain his stance of three interest rate cuts by the end of the year. This, in turn, might exert selling pressure on the Greenback. The US CPI figure is expected to show an increase of 3.4% YoY in May, while the core CPI is estimated to rise 3.5% YoY in the same report period. The Pound Sterling (GBP) has edged lower after the weaker reports, as the Unemployment Rate and May Claimant data showed a worrying picture of the UK labour market condition.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2743 | Negative Crossover | Bearish
  • MA 20 : 1.2717 | Positive Crossover | Bullish
  • MA 50 : 1.2662 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2755 | Negative Crossover | Bearish
  • MA 20 : 1.2736 | Positive Crossover | Bullish
  • MA 50 : 1.2607 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 56.4618 | Buy Zone | Bullish

Stochastic   Oscillator : 42.4883 | Neutral Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 1.2766 | Take Profit : 1.2693 | Stop Loss : 1.2815

AUD/USD

Australian Dollar trades with modest gains, awaits Fed rate decision.

The Australian Dollar gains ground as the RBA is expected to keep higher rates for longer.The Australian Dollar may see limited upside due to softer-than-expected inflation data from its trade partner, China.The US Dollar remains strong as the Fed is expected to keep rates steady in the range of 5.25%-5.50% on Wednesday.The Australian Dollar (AUD) edges higher on Wednesday, possibly supported by the hawkish sentiment surrounding the Reserve Bank of Australia (RBA) to maintain higher rates this year. Last week, RBA Governor Michele Bullock indicated that the central bank is prepared to increase interest rates if the Consumer Price Index (CPI) does not return to the target range of 1%-3%, according to NCA NewsWire. The Australian Dollar may struggle due to softer-than-expected Chinese consumer inflation data released on Wednesday. China’s CPI increased by 0.3% year-over-year in May, missing expectations for a 0.4% rise. Chinese CPI inflation decreased by 0.1% MoM versus April’s 0.1% increase.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6625 | Negative Crossover | Bearish
  • MA 20 : 0.6624 | Negative Crossover | Bearish
  • MA 50 : 0.6599 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6634 | Negative Crossover | Bearish
  • MA 20 : 0.6640 | Negative Crossover | Bearish
  • MA 50 : 0.6580 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 48.8699 | Buy Zone | Bullish

Stochastic   Oscillator : 26.3072 | Sell Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 0.6629 | Take Profit : 0.6574 | Stop Loss : 0.6676

USD/CAD

USD/CAD trades with modest losses around mid-1.3700s, focus remains on US CPI and Fed.

The USD/CAD pair edges lower during the Asian session on Wednesday and currently trades around mid-1.3700s, though the downtick lacks bearish conviction. Spot prices remain well within the striking distance of the highest level since April 19, around the 1.3790 area set on Tuesday, as traders await more cues about the timing of when the Federal Reserve (Fed) will start cutting rates before placing directional bets. Hence, the focus remains on the release of the latest consumer inflation figures from the United States (US) and the outcome of a two-day Federal Open Market Committee (FOMC) meeting later today. The Fed decision will be accompanied by updated economic projections, along with the so-called “dot plot”, which should offer fresh insight into the US central bank’s rate-cut path. This will play a key role in influencing the near-term US Dollar (USD) price dynamics and provide some meaningful impetus to the USD/CAD pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.3715 | Positive Crossover | Bullish
  • MA 20 : 1.3695 | Positive Crossover | Bullish
  • MA 50 : 1.3663 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.3699 | Positive Crossover | Bullish
  • MA 20 : 1.3678 | Positive Crossover | Bullish
  • MA 50 : 1.3683 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 58.2153 | Buy Zone | Bullish

Stochastic   Oscillator : 81.0131 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.3740 R2 : 1.3786
  • S1 : 1.3593 S2 : 1.3547

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.3723 | Take Profit : 1.3788 | Stop Loss : 1.3688

Elsewhere In The Forex Market

NZD/USD down 0.06% to 0.6139, The USD/JPY up 0.13% to 157.33. The EUR/GBP down 0.02% at 0.8428. EUR/AUD down 0.06% at 1.6245. AUD/NZD up 0.13% at 1.0765, The USD/CNY down 0.01% at 7.2537, AUD/SEK up 0.11% at 6.9337, at the time of writing.

Key Economic Events & Data Release Today:

(GBP) GDP (YoY) (Apr) Forecast 0.6%, Previous 0.7%% at 11:30. (GBP) Monthly GDP 3M/3M Change (Apr) Forecast 0.7%, Previous 0.6% at 11:30. (GBP) GDP (MoM) (Apr) Forecast 0.0% Previous 0.4% at 11:30. (GBP) Manufacturing Production (MoM) (Apr) Forecast –0.2%, Previous 0.3% at 11:30. (USD) Core CPI (MoM) (May) Forecast 0.3%, Previous 0.3% at 18:00. (USD) CPI (YoY) (May) Forecast 3.4%, Previous 3.4% at 18:00. (USD) CPI (MoM) (May) Forecast 0.1%, Previous 0.3% at 18:00. (USD) Fed Interest Rate Decision Forecast 5.50%, Previous 5.50% at 23:30. (USD) FOMC Statement at 23:30.