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

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

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

28 Jun 2024

Introduction

EUR/USD drops below 1.0700 ahead of key US PCE inflation data, reversing a previous rebound amid resurgent USD demand. Markets remain anxious ahead of US inflation data and the upcoming French elections. GBP/USD remains vulnerable near monthly lows, while USD/JPY hits a fresh 38-year high. The Australian Dollar declines as the RBA’s Deputy Governor advises against further rate hikes.

Markets In Focus Today – EUR/USD

EUR/USD drops below 1.0700 ahead of key US PCE inflation.

EUR/USD is back in the red below 1.0700 in the early European morning on Friday. The pair reverses the previous rebound amid resurgent US Dollar demand even as risk sentiment remains in a sweeter spot. Markets turn anxious ahead of US PCE inflation and Sunday’s French elections.The irruption of selling interest in the US Dollar (USD) prompted the USD Index (DXY) to give away part of the recent advance beyond the 106.00 level and refocus on the downside instead, allowing EUR/USD to regain balance and reclaim levels above 1.0700 the figure on Thursday. In fact, the euro (EUR) managed to set aside some of the recent negative sentiment amidst reduced political concerns in France ahead of the June 30 snap elections. The macroeconomic situation on both sides of the Atlantic remained steady, with the European Central Bank (ECB) contemplating further rate cuts beyond summer. Market expectations suggest two more ECB rate cuts later in the year.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0717 | Negative Crossover | Bearish
  • MA 20 : 1.0743 | Negative Crossover | Bearish
  • MA 50 : 1.0771 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0714 | Negative Crossover | Bearish
  • MA 20 : 1.0762 | Negative Crossover | Bearish
  • MA 50 : 1.0775 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 42.0703 | Neutral Zone | Neutral

Stochastic   Oscillator : 14.0886 | 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 : 1.0722 | Take Profit : 1.0669 | Stop Loss : 1.0763

GBP/USD

GBP/USD Price Remains vulnerable near monthly low, US PCE data awaited.

GBP/USD attracts fresh sellers on Friday, though the downside remains cushioned.Traders now seem reluctant to place aggressive directional bets ahead of the US PCE.The technical setup suggests that the path of least resistance remains to the downside.The GBP/USD pair extends the overnight late pullback from the 1.2670 region and trades with a mild negative bias during the Asian session on Friday. Spot prices currently hover around the 1.2635-1.2630 area and remain well within the striking distance of the lowest level since mid-May touched on Thursday. The British Pound (GBP) continues to be undermined by rising bets for a rate cut by the Bank of England (BoE) in August. Apart from this, some repositioning trade ahead of the crucial US inflation data lifts the US Dollar (USD) to a fresh two-month high, which, in turn, is seen as another factor exerting some downward pressure on the GBP/USD pair. That said, the uncertainty about the Federal Reserve’s (Fed) rate-cut path keeps a lid on any further gains for the buck and helps limit the downside for the currency pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2668 | Negative Crossover | Bearish
  • MA 20 : 1.2685 | Negative Crossover | Bearish
  • MA 50 : 1.2668 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2670 | Negative Crossover | Bearish
  • MA 20 : 1.2714 | Negative Crossover | Bearish
  • MA 50 : 1.2645 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 43.8651 | Sell Zone | Bearish

Stochastic   Oscillator : 7.9416 | Sell Zone | Negative

Resistance   And Support Levels :

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

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 1.2646 | Take Profit : 1.2563 | Stop Loss : 1.2706

USD/JPY

USD/JPY moves above 161.00, marks fresh 38-year highs.

USD/JPY marks fresh 38-year high at 161.27.Tokyo CPI rose to 2.3% year-over-year in June, up from the previous period’s 2.2%.The US Dollar (USD) gains ground due to higher yields on US Treasury bonds.USD/JPY trades around 161.00, the highest level since 1986, during the Asian session on Friday. The Consumer Price Index (CPI) inflation in Tokyo rose to 2.3% year-over-year in June, up from the previous period’s 2.2%. Core Tokyo CPI inflation, which excludes volatile food prices, also increased during the same period, reaching 2.1% YoY compared to the previous 1.9%, surpassing the median market forecast of 2.0% YoY. Japanese Finance Minister Shunichi Suzuki stated on Wednesday that he “will take appropriate steps on excessive FX moves.” Suzuki refrained from commenting on specific forex levels or potential interventions but emphasized the importance of currencies moving in a stable manner that reflects fundamentals. Chief Cabinet Secretary Yoshimasa Hayashi echoed similar sentiments as the Finance Minister.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 159.5648 | Positive Crossover | Bullish
  • MA 20 : 158.5178 | Positive Crossover | Bullish
  • MA 50 : 156.6166 | Positive Crossover | Bullish

Simple :

  • MA 10 : 159.3913 | Positive Crossover | Bullish
  • MA 20 : 157.9110 | Positive Crossover | Bullish
  • MA 50 : 156.6730 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 73.3549 | Buy Zone | Bullish

Stochastic   Oscillator : 96.7851 | Buy Zone | Neutral

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 Sell : 159.91 | Take Profit : 161.22 | Stop Loss : 159.14

AUD/USD

Australian Dollar declines as RBA Deputy Governor Hauser opposes further rate hikes.

The Australian Dollar loses ground as RBA Deputy Governor Hauser advises against formulating policy based on a single inflation report.Australia’s high inflation has fueled speculation that the RBA might raise interest rates again in August.The US Dollar appreciates due to higher yields ahead of Friday’s release of Core PCE inflation.The Australian Dollar (AUD) depreciates against the US Dollar (USD) on Friday, which could be attributed to the dovish comments from the Reserve Bank of Australia’s (RBA) Deputy Governor Andrew Hauser. Hauser said it would be a “bad mistake” to formulate policy in response to a single inflation report. He emphasized that there is still a suite of economic data to come that will require detailed analysis, per Bloomberg. The AUD gained ground after releasing May’s higher-than-expected Monthly Consumer Price Index (CPI). The persistently high inflation has fueled speculation that the RBA might raise interest rates again in August.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6642 | Negative Crossover | Bearish
  • MA 20 : 0.6639 | Negative Crossover | Bearish
  • MA 50 : 0.6617 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6645 | Negative Crossover | Bearish
  • MA 20 : 0.6641 | Negative Crossover | Bearish
  • MA 50 : 0.6614 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 49.1456 | Buy Zone | Bullish

Stochastic   Oscillator : 16.68 | Sell Zone | Negative

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 : 0.6645 | Take Profit : 0.6591 | Stop Loss : 0.6685

Elsewhere In The Forex Market

NZD/USD down 0.34% to 0.6062, The USD/CAD up 0.01% to 1.3715. The EUR/GBP down 0.05% at 0.8463. EUR/AUD up 0.21% at 1.6135. AUD/NZD up 0.06% at 1.0935, The USD/CNY up 0.02% at 7.2667, AUD/SEK up 0.01% at 7.0644, at the time of writing.

Key Economic Events & Data Release Today:

(GBP) GDP (QoQ) (Q1) Forecast 0.6%, Previous –0.3% at 02:00. (GBP) GDP (YoY) (Q1) Forecast 0.2%, Previous –0.2% at 02:00. (EUR) German Unemployment Change (Jun) Forecast 14K, Previous 15K at 02:30. (USD) Core PCE Price Index (MoM) (May) Forecast 0.1%, Previous 0.2% at 08:30. (CAD) GDP (MoM) (Apr) Forecast 0.3%, Previous 0.0% at 08:30.