. Daily Forex Analysis - EUR/USD Below 1.0750 GBP/USD Falls.

Daily Forex Analysis – EUR/USD Below 1.0750 GBP/USD Falls.

Daily Forex Analysis – EUR/USD Below 1.0750 GBP/USD Falls.

18 Jun 2024

Introduction

Currency markets eye key data releases. The Euro (EUR) dips against the US Dollar (USD) ahead of US Retail Sales figures. Investors await clues on the Federal Reserve’s rate cut plans. The Pound (GBP) and New Zealand Dollar (NZD) also fall as the USD strengthens. Oil prices climb, supporting the Canadian Dollar (CAD).

Markets In Focus Today – EUR/USD

EUR/USD Price Holds below 1.0750 ahead of US Retail Sales data.

EUR/USD weakens around 1.0730 in Tuesday’s early European session. The EUR/USD pair trades on a softer note near 1.0730 on Tuesday during the early European trading hours. The modest recovery of the Greenback drags the major pair lower. Traders prefer to wait on the sidelines ahead of the Eurozone Harmonized Index of Consumer Prices (HICP) inflation data and the US Retail Sales data. Retail Sales in the US are expected to rise 0.2% MoM in May. EUR/USD recovered to 1.0740 on Monday as market sentiment shifts back into rate cut hopes to kick off the new trading week, with investors shrugging off cautionary statements from Federal Reserve (Fed) officials that warned rate cuts may not materialize at a pace investors are happy with. US data will dominate financial headlines with Retail Sales slated for Tuesday, leaving markets shuffling in place until Friday’s global Purchasing Managers Index (PMI) figures update.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0766 | Negative Crossover | Bearish
  • MA 20 : 1.0788 | Negative Crossover | Bearish
  • MA 50 : 1.0795 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0778 | Negative Crossover | Bearish
  • MA 20 : 1.0812 | Negative Crossover | Bearish
  • MA 50 : 1.0767 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 42.2268 | Neutral Zone | Neutral

Stochastic   Oscillator : 21.0632 | Sell Zone | Positive

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 : 1.0742 | Take Profit : 1.0679 | Stop Loss : 1.0785

GBP/USD

Pound Sterling retreats from 1.2700 with focus on UK inflation and BoE policy outcome.

The Pound Sterling struggles near 1.2700 against the US Dollar amid uncertainty ahead of the UK inflation and the BoE interest rate policy.The UK headline CPI is expected to have decelerated to the bank’s target of 2% in May.Fed’s Harker sees only one rate cut this year if his economic forecast plays out.The Pound Sterling (GBP) faces selling pressure in an attempt to extend recovery above the round-level resistance of 1.2700 against the US Dollar (USD) in Tuesday’s London session. The GBP/USD pair edges down as the US Dollar rebounds after a modest correction from a six-week high. The US Dollar Index (DXY), which tracks the greenback’s value against six major currencies, holds gains above 105.00 as Federal Reserve (Fed) officials continue to argue in favor of cutting interest rates only once this year. Fed policymakers want to see inflation decline for months to gain confidence in lowering interest rates. They remain concerned over a reacceleration in price pressures due to premature rate cuts even though the progress in the disinflation process has resumed after stalling in the first quarter of the year.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2724 | Negative Crossover | Bearish
  • MA 20 : 1.2716 | Negative Crossover | Bearish
  • MA 50 : 1.2670 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2738 | Negative Crossover | Bearish
  • MA 20 : 1.2741 | Negative Crossover | Bearish
  • MA 50 : 1.2612 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 47.4552 | Buy Zone | Bullish

Stochastic   Oscillator : 15.0327 | Sell Zone | Positive

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 : 1.2699 | Take Profit : 1.2608 | Stop Loss : 1.2762

NZD/USD

NZD/USD drifts lower amid the emergence of some USD buying, holds above 0.6100 mark.

NZD/USD remains under some selling pressure for the fourth straight day on Tuesday.The USD regains positive traction amid the Fed’s hawkish stance and weighs on the pair.Concerns about China’s economic recovery further contribute to the modest decline.The NZD/USD pair struggles to capitalize on the previous day’s modest rebound from the 0.6100 mark, or a one-week low and trades with a mild negative bias during the Asian session on Tuesday. Spot prices remain confined in a familiar range held over the past month or so and currently hover around the 0.6120 region, down nearly 0.20% for the day amid the emergence of fresh US Dollar (USD) buying. Against the backdrop of the Federal Reserve’s (Fed) hawkish outlook, policymakers continue to argue in favor of only one interest rate cut this year. In fact, Philadelphia Fed President Patrick Harker said on Monday that keeping rates where they are for a bit longer will help get inflation down and mitigate upside risks. This remains supportive of elevated US Treasury bond yields and assists the USD to regain some positive traction, which, in turn, is seen weighing on the NZD/USD pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6139 | Negative Crossover | Bearish
  • MA 20 : 0.6129 | Negative Crossover | Bearish
  • MA 50 : 0.6090 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6149 | Negative Crossover | Bearish
  • MA 20 : 0.6141 | Negative Crossover | Bearish
  • MA 50 : 0.6047 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 48.1754 | Buy Zone | Bullish

Stochastic   Oscillator : 27.3138 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.6175 R2 : 0.6245
  • S1 : 0.5949 S2 : 0.5880

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Stop Sell : 0.6092 | Take Profit : 0.6033 | Stop Loss : 0.6140

USD/CAD

USD/CAD extends decline below 1.3750 ahead of US Retail Sales.

USD/CAD trades in negative territory near 1.3720 on the softer US Dollar on Tuesday. Fed’s Harker said it is appropriate to keep rates on hold and wait for more data. Higher crude oil prices lift the commodity-linked Loonie and weigh on the pair. The USD/CAD pair extends downside around 1.3720 during the early Asian session on Tuesday. The decline of the USD Index (DXY) and the rebound of crude oil prices weigh on the pair. The US Retail Sales and Industrial Production are due later in the day. Also, the Fed Lisa Cook, Thomas Barkin, Adriana Kugler, Lorie Logan, Alberto Musalem, and Austan Goolsbee are set to speak. On the Loonie front, crude oil prices edge higher as investors expect an increase in summer fuel demand due to a hotter-than-average season. This, in turn, boosts the commodity-linked Canadian Dollar (CAD) as Canada is the largest Oil exporter to the United States (US).

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.3722 | Positive Crossover | Bullish
  • MA 20 : 1.3705 | Positive Crossover | Bullish
  • MA 50 : 1.3672 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.3728 | Positive Crossover | Bullish
  • MA 20 : 1.3698 | Positive Crossover | Bullish
  • MA 50 : 1.3696 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 56.2782 | Neutral Zone | Neutral

Stochastic   Oscillator : 67.4973 | Neutral Zone | Neutral

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 : 1.3733 | Take Profit : 1.3790 | Stop Loss : 1.3700

Elsewhere In The Forex Market

USD/JPY up 0.25% to 158.12, The AUD/USD up 0.05% to 0.6615. The EUR/GBP up 0.12% at 0.8458. EUR/AUD down 0.13% at 1.6209. AUD/NZD up 0.51% at 1.0840, The USD/CNY up 0.00% at 7.2557, AUD/SEK up 0.11% at 6.9593, at the time of writing.

Key Economic Events & Data Release Today:

(AUD) RBA Rate Statement at 00:30. (AUD) RBA Interest Rate Decision (Jun) Forecast 4.35%, Previous 4.35% at 00:30. (EUR) CPI (YoY) (May) Forecast 2.6%, Previous 2.4% at 05:00. (USD) Core Retail Sales (MoM) (May) Forecast 0.2%, Previous 0.2% at 08:30. (USD) Retail Sales (MoM) (May) Forecast 0.3%, Previous 0.0% at 08:30. (USD) Industrial Production (MoM) (May) Forecast 0.3%, Previous 0.0% at 09:15.