. Daily Forex Analysis - EUR/USD, GBP/USD Fall as USD Strengthens.

Daily Forex Analysis – EUR/USD, GBP/USD Fall as USD Strengthens.

Daily Forex Analysis – EUR/USD, GBP/USD Fall as USD Strengthens.

20 Jun 2024

Introduction

The Euro (EUR) weakens against the US Dollar (USD) due to political uncertainty in the Eurozone and a cautious market mood. The USD is also supported by rising US bond yields. Investors await key economic data on Friday, including the Purchasing Managers Index (PMI) for both Eurozone and US. The British Pound (GBP) and Japanese Yen (JPY) are also under pressure against the USD, while the Canadian Dollar (CAD) weakens slightly.

Markets In Focus Today – EUR/USD

EUR/USD weakens below 1.0750 as Eurozone political uncertainty poses downside risks for Euro.

EUR/USD loses traction around 1.0730 as markets turn cautious in Thursday’s early European session. The worries about the Eurozone political uncertainty in the Eurozone continue to undermine the Euro. The Fed’s wait-and-see mode might boost the Greenback despite the recent weaker US Retail Sales data. The EUR/USD pair weakens near 1.0730, snapping the three-day winning streak during the early European session on Thursday. However, the upside for the pair seems limited as investors are worried about the political uncertainty in the Eurozone. Investors will closely watch the preliminary Eurozone and US Purchasing Managers Index (PMI) for June, which are due on Friday. The cautious mood by the calling of a snap election in France after a defeat by the far-right National Rally raised fear of Eurozone political uncertainty and weighed on the Euro (EUR). Furthermore, the divergence in monetary policy between the Eurozone and the US might further drag the shared currency lower.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0758 | Negative Crossover | Bearish
  • MA 20 : 1.0780 | Negative Crossover | Bearish
  • MA 50 : 1.0791 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0751 | Negative Crossover | Bearish
  • MA 20 : 1.0804 | Negative Crossover | Bearish
  • MA 50 : 1.0768 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 42.9870 | Neutral Zone | Neutral

Stochastic   Oscillator : 28.6347 | 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 : 1.0736 | Take Profit : 1.0679 | Stop Loss : 1.0776

GBP/USD

GBP/USD Price Consolidates above 1.2700 mark as traders await BoE policy update.

GBP/USD ticks lower on Thursday and snaps a three-day winning streak to the weekly top.The USD draws support from rebounding US bond yields and exerts pressure on the major.The downtick lacks follow-through as traders look to the BoE before placing directional bets.The GBP/USD pair trades with a mild negative bias during the Asian session on Thursday and moves further away from the weekly low, around the 1.2740 area touched the previous day. Spot prices, however, hold above the 1.2700 mark as traders await the crucial Bank of England (BoE) monetary policy decision before placing fresh directional bets. Heading into the key central bank event risk, the US Dollar (USD) attracts some buyers in the wake of a goodish pickup in the US Treasury bond yields and turns out to be a key factor acting as a heading for the GBP/USD pair. However, expectations that the Federal Reserve (Fed) will cut interest rates twice this year keep a lid on any meaningful gains for the Greenback. Furthermore, reduced bets that the BoE will ease monetary policy in the coming months in the wake of higher-than-expected services sector inflation in May should underpin the British Pound (GBP) and lend support to the currency pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2724 | Negative Crossover | Bearish
  • MA 20 : 1.2718 | Negative Crossover | Bearish
  • MA 50 : 1.2675 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2726 | Negative Crossover | Bearish
  • MA 20 : 1.2743 | Negative Crossover | Bearish
  • MA 50 : 1.2620 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 50.5541 | Buy Zone | Bullish

Stochastic   Oscillator : 27.4510 | 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 : 1.2697 | Take Profit : 1.2608 | Stop Loss : 1.2774

USD/JPY

USD/JPY holds steady near 158.00 mark, just below its highest level since late April.

The USD/JPY pair consolidates around the 158.00 round figure during the Asian session on Thursday and remains well within the striking distance of its highest level since late April touched last week. The mixed fundamental backdrop, meanwhile, warrants some caution before positioning for an extension of the recent appreciating move witnessed over the past two weeks or so. The Japanese Yen (JPY) is undermined by the Bank of Japan’s (BoJ) decision to hold off on any discussions around JGB tapering until the next meeting. Apart from this, the underlying bullish tone across the global equity markets is seen denting demand for the safe-haven JPY and lending support to the USD/JPY pair. However, speculations that Japanese authorities might intervene to prop up the domestic currency, along with persistent geopolitical tensions and political uncertainty in Europe, should limit any meaningful downside for the JPY.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 157.4244 | Positive Crossover | Bullish
  • MA 20 : 156.9534 | Positive Crossover | Bullish
  • MA 50 : 155.5945 | Positive Crossover | Bullish

Simple :

  • MA 10 : 157.3493 | Positive Crossover | Bullish
  • MA 20 : 156.9307 | Positive Crossover | Bullish
  • MA 50 : 155.9417 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 62.2160 | Buy Zone | Neutral

Stochastic   Oscillator : 93.1410 | Neutral 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 Buy : 157.46 | Take Profit : 158.39 | Stop Loss : 156.83

USD/CAD

USD/CAD trades stronger above 1.3700 on the modest rebound of US Dollar.

The USD/CAD pair trades with mild gains around 1.3710, snapping the four-day losing streak during the early Asian trading hours on Thursday. The modest recovery of the US Dollar (USD) might be limited amid reduced bets of the US Federal Reserve (Fed) rate cut this year. Traders will take more cues from the US weekly Initial Jobless Claims, Building Permits, Housing Starts, the Philly Fed Manufacturing Index, and the speech by the Fed’s Barkin, which are due later on Thursday. The US Initial Jobless Claims are expected to drop 235K from the previous week of 242K. The better-than-expected reading could lift the Greenback and cap the downside for the pair. The Bank of Canada’s (BoC) latest Summary of Deliberations on Wednesday stated that the BoC policymaker has worried about downside risks and the possibility of a widening divergence between Canada and the US. The Canadian central bank decided to cut its policy rate to 4.75% from 5% on June 5, the first cut in four years. Investors see at least two more rate cuts before the end of 2023, and priced in nearly 60% odds of a quarter-point rate cut in a July meeting, according to Refinitiv data.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.3714 | Negative Crossover | Bearish
  • MA 20 : 1.3704 | Negative Crossover | Bearish
  • MA 50 : 1.3674 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.3731 | Negative Crossover | Bearish
  • MA 20 : 1.3696 | Negative Crossover | Bearish
  • MA 50 : 1.3696 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 52.3693 | Buy Zone | Bullish

Stochastic   Oscillator : 9.89 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.3740 R2 : 1.3786
  • S1 : 1.3593 S2 : 1.3547

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 1.3725 | Take Profit : 1.3660 | Stop Loss : 1.3770

Elsewhere In The Forex Market

NZD/USD up 0.01% to 0.6131, The USD/CHF up 0.59% to 0.8889. The EUR/GBP down 0.05% at 0.8442. EUR/AUD down 0.08% at 1.6081. AUD/NZD down 0.02% at 1.0879, The USD/CNY up 0.04% at 7.2596, AUD/SEK up 0.09% at 6.9689, at the time of writing.

Key Economic Events & Data Release Today:

(CHF) SNB Interest Rate Decision (Q2) Forecast 1.50%, Previous 1.50% at 03:30. (CHF) SNB Monetary Policy Assessment at 03:30. (GBP) BoE Interest Rate Decision (Jun) Forecast 5.25%, Previous 5.25% at 07:00. (GBP) BoE MPC Meeting Minutes at 07:00. (USD) Building Permits (May) Forecast 1.450M, Previous 1.440M at 08:30. (CAD) New Housing Price Index (MoM) (May) Forecast 0.2%, Previous 0.2% at 08:30. (USD) Initial Jobless Claims Forecast 235K, Previous 242K at 08:30. (USD) Crude Oil Inventories Forecast –2.800M, Previous 3.730M at 11:00.