. Daily Forex Analysis - EUR/USD and GBP/USD Steady.

Daily Forex Analysis – EUR/USD and GBP/USD Steady.

Daily Forex Analysis – EUR/USD and GBP/USD Steady.

02 Jul 2024

Introduction

EUR/USD corrects to 1.0720 as the US Dollar recovers despite weak US Manufacturing PMI data. The pair is poised for volatility with Eurozone inflation data and Powell’s speech in focus. GBP/USD remains range-bound around mid-1.2600s ahead of UK elections. NZD/USD and USD/CAD show movement amid USD strength and economic data.

Markets In Focus Today – EUR/USD

EUR/USD falls slightly with Eurozone inflation and Powell’s speech in focus.

EUR/USD corrects to near 1.0720 as the US Dollar recovers despite weak US Manufacturing PMI data.The Euro remains on tenterhooks ahead of the preliminary Eurozone HICP report for June.Investors await Fed Powell’s speech for fresh guidance on interest rates.EUR/USD edges lower but holds the crucial support of 1.0700 in Tuesday’s European session, correcting down from a more than two-week high near 1.0770 recorded on Monday. The major currency pair is expected to remain volatile as investors shift focus to the preliminary Eurozone Harmonized Index of Consumer Prices (HICP) data for June, which will be published at 09:00 GMT. Apart from the Eurozone’s inflation data, France’s second-round runoffs scheduled on July 7 will also keep the Euro on its toes.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0721 | Negative Crossover | Bearish
  • MA 20 : 1.0741 | Negative Crossover | Bearish
  • MA 50 : 1.0768 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0713 | Positive Crossover | Bullish
  • MA 20 : 1.0746 | Negative Crossover | Bearish
  • MA 50 : 1.0777 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 44.9147 | Neutral Zone | Neutral

Stochastic   Oscillator : 31.6465 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.0860 R2 : 1.0919
  • S1 : 1.0669 S2 : 1.0610

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 1.0732 | Take Profit : 1.0687 | Stop Loss : 1.0768

GBP/USD

GBP/USD lacks firm near-term direction, remains confined in a range around mid-1.2600s.

The GBP/USD pair extends its sideways consolidation price move during the Asian session on Tuesday and remains confined in a familiar range held over the past two weeks or so. Spot prices currently trade around the 1.2655-1.2645 confluence region – comprising 50-day and 100-day Simple Moving Averages (SMAs) – amid the anxiety surrounding the upcoming UK general elections on Thursday. In the meantime, the Bank of England’s (BoE) dovish pause in June, which lifted bets for a rate cut at the August monetary policy meeting, continues to undermine the British Pound (GBP). The US Dollar (USD), on the other hand, builds on the overnight solid bounce from a multi-day low and further seems to act as a headwind for the GBP/USD pair. The yield on the benchmark 10-year government bond shot to its highest level in a month on Monday amid concerns that the imposition of aggressive tariffs by the Trump administration could fuel inflation and trigger higher interest rates.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2658 | Negative Crossover | Bearish
  • MA 20 : 1.2676 | Negative Crossover | Bearish
  • MA 50 : 1.2666 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2657 | Negative Crossover | Bearish
  • MA 20 : 1.2699 | Negative Crossover | Bearish
  • MA 50 : 1.2655 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 42.4042 | Neutral Zone | Neutral

Stochastic   Oscillator : 10.6169 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.2800 R2 : 1.2859
  • S1 : 1.2611 S2 : 1.2552

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 1.2646 | Take Profit : 1.2567 | Stop Loss : 1.2708

NZD/USD

NZD/USD seems vulnerable near mid-0.6000s, lowest since May 15 amid stronger USD.

NZD/USD meets with a fresh supply on Tuesday amid some follow-through USD buying.Bets for an early RBNZ rate cut and China’s economic woes contribute to the downfall.Traders now look forward to Fed Chair Jerome Powell’s speech for short-term impetus.The NZD/USD pair comes under some renewed selling pressure during the Asian session on Tuesday and momentarily slides below mid-0.6000s for the first time since mid-May. Spot prices now seem to have confirmed a breakdown through the 50-day Simple Moving Average (SMA) and seem vulnerable to prolong a three-week-old downtrend amid some follow-through US Dollar (USD) buying. Concerns that a Trump presidency would be more inflationary than a Biden administration pushed the yield on the benchmark 10-year government bond to its highest level in a month on Monday. This, in turn, assists the USD to build on the overnight solid rebound from a multi-day low. The New Zealand Dollar (NZD), on the other hand, is weighed down by expectations that the Reserve Bank of New Zealand (RBNZ) will cut rates earlier than projected.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6094 | Negative Crossover | Bearish
  • MA 20 : 0.6107 | Negative Crossover | Bearish
  • MA 50 : 0.6093 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6099 | Negative Crossover | Bearish
  • MA 20 : 0.6126 | Negative Crossover | Bearish
  • MA 50 : 0.6082 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 38.3253 | Sell Zone | Bearish

Stochastic   Oscillator : 11.4083 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.6186 R2 : 0.6225
  • S1 : 0.6061 S2 : 0.6022

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 0.6074 | Take Profit : 0.6016 | Stop Loss : 0.6119

USD/CAD

USD/CAD gains traction above 1.3700 as US Dollar rebounds ahead of Fed’s Powell speech.

The USD/CAD pair trades on a stronger note near 1.3745 during the early European session on Tuesday. The uptick of the pair is supported by the firmer Greenback and higher US Treasury bond yields. Later in the day, the Canadian S&P Global Manufacturing Purchasing Managers Index (PMI) for June is due, which is estimated to improve to 50.2 from 49.3 in May. Also, Federal Reserve (Fed) Chairman Jerome Powell’s speech will be closely watched. The weaker-than-expected US ISM Manufacturing PMI for June supported the case that the Fed will cut interest rates in September. Traders are now pricing in nearly 68% odds that the Fed will cut rate in September, up more than 20 percentage points from a month ago, according to the CME FedWatch tool. San Francisco Fed President Mary Daly stated that the US central bank remains data-dependent and didn’t give an estimation of a policy path forward. The cautious tone of the Fed officials continues to underpin the US Dollar (USD) in the near term despite a series of weaker US economic data.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.3705 | Positive Crossover | Bullish
  • MA 20 : 1.3700 | Positive Crossover | Bullish
  • MA 50 : 1.3679 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.3694 | Positive Crossover | Bullish
  • MA 20 : 1.3710 | Positive Crossover | Bullish
  • MA 50 : 1.3686 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 56.5958 | Buy Zone | Bullish

Stochastic   Oscillator : 58.8259 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.3763 R2 : 1.3807
  • S1 : 1.3618 S2 : 1.3574

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.3723 | Take Profit : 1.3790 | Stop Loss : 1.3686

Elsewhere In The Forex Market

AUD/USD down 0.22% to 0.6645, The USD/JPY up 0.13% to 161.69. The EUR/GBP down 0.03% at 0.8488. EUR/AUD up 0.00% at 1.6124. AUD/NZD up 0.16% at 1.0978, The USD/CNY up 0.02% at 7.2679, AUD/SEK down 0.14% at 7.0786, at the time of writing.

Key Economic Events & Data Release Today:

(EUR) CPI (YoY) (Jun) Forecast 2.5%, Previous 2.6% at 14:30. (USD) Fed Chair Powell Speaks at 09:30. (EUR) ECB President Lagarde Speaks at 09:30. (USD) JOLTs Job Openings (May) Forecast 7.960M, Previous 8.059M at 10:00. (AUD) Retail Sales (MoM) (May) Previous 0.1% at 21:30.