. Daily Forex Analysis - EUR/USD Climbs, GBP/USD Falls.

Daily Forex Analysis – EUR/USD Climbs, GBP/USD Falls.

Daily Forex Analysis – EUR/USD Climbs, GBP/USD Falls.

11 Jun 2024

Introduction

The Euro (EUR) is inching up towards 1.08 against the US Dollar (USD) ahead of comments from European Central Bank (ECB) officials. This rise comes despite lingering worries about the Eurozone economy and politics. The Pound Sterling (GBP) dipped after weak UK jobs data and a strong USD. Investors now await key US inflation figures and the Federal Reserve meeting for further clues on rate cuts. The USD strengthened against other currencies like the NZD and CAD too, as expectations of a US rate cut softened.

Markets In Focus Today – EUR/USD

EUR/USD grinds higher toward 1.0800 ahead of ECB-speak.

EUR/USD is grinding higher toward 1.0800 in the European morning on Tuesday. A pause in the US Dollar upsurge supports the pair, as markets reassess the implications of the Euro area political concerns. The pair’s upside could be limited due to a cautious mood. ECB-speak is in focus. In the short term, the ECB’s recent rate cut widened the policy gap with the Fed, potentially exposing the EUR/USD to further weakness. However, in the longer term, the emerging economic recovery in the Eurozone, coupled with perceived slowdowns in the US economy, should mitigate this disparity, offering support to the pair. Looking ahead, the next big events for the pair will be the release of US inflation figures tracked by the CPI and the FOMC meeting, both due on June 12.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0822 | Negative Crossover | Bearish
  • MA 20 : 1.0823 | Negative Crossover | Bearish
  • MA 50 : 1.0808 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0835 | Negative Crossover | Bearish
  • MA 20 : 1.0844 | Negative Crossover | Bearish
  • MA 50 : 1.0778 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 42.5635 | Neutral Zone | Neutral

Stochastic   Oscillator : 14.7115 | 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 : 1.0785 | Take Profit : 1.0735 | Stop Loss : 1.0826

GBP/USD

Pound Sterling edges down due to weak UK Employment, uncertainty ahead of Fed decision.

The Pound Sterling declines from 1.2740 against the US Dollar due to weak UK employment data and a firm US Dollar.The BoE could struggle to shift toward policy normalization as steady UK wage growth offset the impact of weaker employment levels.Investors see the Fed arguing to maintain a restrictive framework for longer.The Pound Sterling (GBP) falls back after facing selling pressure near 1.2740 in Tuesday’s London session. The GBP/USD pair weakens due to poor United Kingdom (UK) Employment data for three months through April and a firm US Dollar (USD) amid expectations that the Federal Reserve (Fed) will delay interest-rate cuts.The UK Office for National Statistics (ONS) reported that the labor market recorded a drawdown for the fourth time in a row. Employment fell by 140,000 workers in the three months to April, less than the 177,000 decline in employment seen in the January-March period. The ILO Unemployment Rate rose to 4.4%, higher than the expected 4.3%. The labor market data indicates that firms struggle to bear the consequences of the Bank of England’s (BoE) higher interest rates.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2740 | Negative Crossover | Bearish
  • MA 20 : 1.2713 | Positive Crossover | Bullish
  • MA 50 : 1.2658 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2749 | Negative Crossover | Bearish
  • MA 20 : 1.2732 | Negative Crossover | Bearish
  • MA 50 : 1.2605 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 53.2444 | Buy Zone | Bullish

Stochastic   Oscillator : 32.1596 | 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 : 1.2743 | Take Profit : 1.2672 | Stop Loss : 1.2797

NZD/USD

NZD/USD weakens below 0.6150, investors await the US CPI, Fed rate decision.

The NZD/USD pair trades on a softer note around 0.6130 on Tuesday during the early Asian session. The rebound of the USD Index (DXY) above the 105.00 barrier drags the pair lower. Amid the absence of top-tier economic data from New Zealand, the NZD/USD pair will be influenced by the USD. The US Consumer Price Index (CPI) inflation data and the Federal Reserve (Fed) monetary policy meeting will take center stage on Wednesday. Inflation in the United States remained uncomfortably high in the first three months of this year, making it more complicated for the US Federal Reserve (Fed) to cut the interest rate. Even though CPI inflation eased in April, Fed officials prefer to wait for more evidence before cutting their benchmark rate. If the May inflation report on Wednesday shows further signs of improvement, it might trigger the Fed to ease policy in the coming months. Rate cuts would eventually lead to the weakening of the US Dollar (USD), which might create a tailwind for NZD/USD.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6139 | Negative Crossover | Bearish
  • MA 20 : 0.6119 | Positive Crossover | Bullish
  • MA 50 : 0.6078 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6147 | Negative Crossover | Bearish
  • MA 20 : 0.6132 | Negative Crossover | Bearish
  • MA 50 : 0.6034 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 53.3725 | Buy Zone | Bullish

Stochastic   Oscillator : 24.9544 | Sell Zone | Positive

Resistance   And Support Levels :

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

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 0.6151 | Take Profit : 0.6080 | Stop Loss : 0.6200

USD/CAD

USD/CAD gains ground above 1.3750 as traders pare back Fed rate cut expectation.

USD/CAD holds positive ground near 1.3765 amid firmer US Dollar. US Fed is expected to maintain interest rates steady in the range of 5.25%-5.50 in its June meeting on Wednesday. The USD/CAD pair trades in the positive territory around 1.3765 amid the renewed US Dollar (USD) demand on Tuesday during the early Asian trading hours. Meanwhile, the decline in crude oil prices undermines the commodity-linked Loonie and creates a tailwind for USD/CAD. The robust US employment data for May pared back rate cut expectations from the Federal Open Market Commit (FOMC). Traders are now pricing in nearly 47% chances of a rate cut for the September meeting, down from 68% before the NFP data, according to the CME FedWatch tool. At the June monetary meeting on Wednesday, the US Federal Reserve (Fed) is expected to maintain interest rates steady in the range of 5.25%-5.50 to curb inflation towards the Fed’s 2% target.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.3709 | Positive Crossover | Bullish
  • MA 20 : 1.3690 | Positive Crossover | Bullish
  • MA 50 : 1.3660 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.3696 | Positive Crossover | Bullish
  • MA 20 : 1.3671 | Positive Crossover | Bullish
  • MA 50 : 1.3679 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 59.6723 | Buy Zone | Bullish

Stochastic   Oscillator : 91.0589 | 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 : 1.3737 | Take Profit : 1.3801 | Stop Loss : 1.3702

Elsewhere In The Forex Market

AUD/USD down 0.11% to 0.6602, The USD/JPY up 0.19% to 157.32. The EUR/GBP up 0.05% at 0.8459. EUR/AUD up 0.09% at 1.6298. AUD/NZD down 0.07% at 1.0779, The USD/CNY up 0.01% at 7.2541, AUD/SEK down 0.01% at 6.9256, at the time of writing.

Key Economic Events & Data Release Today:

(GBP) Average Earning Index + Bonus (Apr) Forecast 5.7%, Previous –5.7% at 02:00. (CAD) Building Permits (MoM) (Apr) Forecast 4.9% Previous –11.7% at 08:30. (CNY) CPI (MoM) (May) Previous 0.1% at 21:30. (CNY) PPI (YoY) (May) Forecast –1.5%, Previous –2.5% at 21:30.