. Daily Forex Analysis - EUR/USD Drops Amid Euro Turmoil.

Daily Forex Analysis – EUR/USD Drops Amid Euro Turmoil.

Daily Forex Analysis – EUR/USD Drops Amid Euro Turmoil.

10 Jun 2024

Introduction

EUR/USD dropped to 1.0750 amid Eurozone political turmoil following French President Emmanuel Macron’s snap election call, while strong US labor market data diminished Fed rate-cut expectations. The GBP/USD and USD/JPY pairs showed resilience, and the Australian Dollar gained due to hawkish RBA sentiment, despite the strong US Dollar.

Markets In Focus Today – EUR/USD

EUR/USD falls inside the woods amid Eurozone political uncertainty.

EUR/USD weakens to 1.0750 on Monday amid multiple headwinds.Euro tumbles as French President Emmanuel Macron calls for a snap election, which triggers political uncertainty.Strong US labor market data diminishes Fed rate-cut bets, which boosts the US Dollar’s appeal.EUR/USD extends its decline to 1.0750 on Monday. The major currency pair weakens as political uncertainty in the Eurozone after French President Emmanuel Macron call for a snap election weighed heavily on the Euro. Macron’s unexpected move on Sunday evening came after exit polls indicated that Marine Le Pen’s far-right National Rally (RN) scored 32%-33% seats in European parliamentary elections under the leadership of the party’s president, Jordan Bardella, which was more than double from Macron’s centrist’s list.On the monetary policy front, European Central Bank (ECB) policymaker and President of the Deutsche Bundesbank Joachim Nagel warned about a stubborn inflation outlook, especially in the service sector, due to strong wage growth. Worries about inflation becoming sticky suggest that the policy-easing campaign would be slow.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0833 | Negative Crossover | Bearish
  • MA 20 : 1.0828 | Negative Crossover | Bearish
  • MA 50 : 1.0809 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0843 | Negative Crossover | Bearish
  • MA 20 : 1.0846 | Negative Crossover | Bearish
  • MA 50 : 1.0778 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 41.3160 | Neutral Zone | Neutral

Stochastic   Oscillator : 30.5524 | Sell Zone | Negative

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 : 1.0781 | Take Profit : 1.0722 | Stop Loss : 1.0821

GBP/USD

GBP/USD remains on the defensive below 1.2750 amid firmer US Dollar.

GBP/USD trades with mild gains near 1.2725 despite the firmer US Dollar on Monday. The US economy created more jobs than expected in May, which dampened the expectation of Fed rate cuts in September. The stronger US employment report pared back Fed rate cut expectation, weighing on the Greenback. The GBP/USD pair recovers some lost ground around 1.2725 during the early Asian trading hours on Monday. The upside of GBP/USD might be limited amid the lower bets of the US Federal Reserve (Fed) rate cuts this year after the stronger-than-expected US Nonfarm Payrolls (NFP) data. Investors will closely watch the UK employment data for May, which is due on Tuesday. On the US docket, the Consumer Price Index (CPI) and Federal Reserve (Fed) interesting that decision this week will be in the spotlight. On the other hand, the UK Employment data on Tuesday, including Claimant Count Change, Employment Change, and Average Earnings data. Any signs of more layoffs could trigger the expectation of early rate cuts by the Bank of England (BoE) and undermine the Pound Sterling (GBP).

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2742 | Negative Crossover | Bearish
  • MA 20 : 1.2711 | Positive Crossover | Bullish
  • MA 50 : 1.2655 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2752 | Negative Crossover | Bearish
  • MA 20 : 1.2725 | Negative Crossover | Bearish
  • MA 50 : 1.2601 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 52.9645 | Buy Zone | Bullish

Stochastic   Oscillator : 46.2441 | 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 : 1.2730 | Take Profit : 1.2643 | Stop Loss : 1.2795

USD/JPY

Japanese Yen remains tepid, while US Dollar advances on hawkish sentiment surrounding Fed.

The Japanese Yen lost ground as US Dollar advanced on robust jobs data.The mixed Japanese data may limit the downside of the JPY.Japan’s 10-year government bond yield moves above 1.01% ahead of the BoJ policy meeting on Friday.The Japanese Yen (JPY) edges lower for the successive second trading day on Monday. The USD/JPY pair experienced support as the US Dollar (USD) regained its strength following the better-than-expected US employment data released on Friday. Japan released mixed data on Monday, which could limit the downside of the Japanese Yen. Gross Domestic Product Annualized showed that Japan’s economy contracted less than expected in the first quarter. Meanwhile, GDP (QoQ) shrank in Q1, matching flash data.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 156.4115 | Positive Crossover | Bullish
  • MA 20 : 156.1960 | Positive Crossover | Bullish
  • MA 50 : 154.8751 | Positive Crossover | Bullish

Simple :

  • MA 10 : 156.5173 | Positive Crossover | Bullish
  • MA 20 : 156.3556 | Positive Crossover | Bullish
  • MA 50 : 155.0662 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 56.4902 | Buy Zone | Bullish

Stochastic   Oscillator : 60.7663 | Buy Zone | Positive

Resistance   And Support Levels :

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

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 156.43 | Take Profit : 157.96 | Stop Loss : 155.50

AUD/USD

Australian Dollar inches higher due to the hawkish sentiment surrounding the RBA.

The Australian Dollar retraces its recent losses due to the hawkish sentiment surrounding the RBA.The Australian Dollar may remain calm on a thin trading day resulting from the Queen’s Birthday holiday.The US Dollar (USD) extends its gains as US Treasury yields advance on hawkish sentiment surrounding the Fed.The Australian Dollar (AUD) gains ground on Monday following the decline in the previous session. The US Dollar (USD) regained its strength from the better-than-expected US employment data released on Friday, causing traders to delay their expectations of Federal Reserve’s (Fed) rate cuts. This has put pressure on the AUD/USD pair. The Australian Dollar may limit its downside due to the hawkish sentiment surrounding the Reserve Bank of Australia (RBA). 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%.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6629 | Negative Crossover | Bearish
  • MA 20 : 0.6626 | Negative Crossover | Bearish
  • MA 50 : 0.6598 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6637 | Negative Crossover | Bearish
  • MA 20 : 0.6644 | Negative Crossover | Bearish
  • MA 50 : 0.6576 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 45.8798 | Neutral Zone | Neutral

Stochastic   Oscillator : 25.9136 | Sell Zone | Negative

Resistance   And Support Levels :

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

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Buy : 0.6607 | Take Profit : 0.6543 | Stop Loss : 0.6656

Elsewhere In The Forex Market

NZD/USD up 0.06% to 0.6106, The USD/CAD up 0.01% to 1.3768. The EUR/GBP down 0.31% at 0.8463. EUR/AUD down 0.53% at 1.6323. AUD/NZD up 0.15% at 1.0791, The USD/CNY up 0.01% at 7.2475, AUD/SEK up 0.51% at 6.9696, at the time of writing.

Key Economic Events & Data Release Today:

(JPY) GDP (QoQ) (Q1) Forecast -0.5%, Previous -0.5% at 05:20. (JPY) GDP (YoY) (Q1) Forecast –2.0% Previous 0.4% at 05:20.