. Daily Forex Analysis - EUR/USD, GBP/USD Retreat.

Daily Forex Analysis – EUR/USD, GBP/USD Retreat.

Daily Forex Analysis – EUR/USD, GBP/USD Retreat.

08 May 2024

Introduction

In the currency markets, EUR/USD retreats to near 1.0750 following hawkish signals from a Fed official, while GBP/USD faces pressure amidst the US Dollar’s rebound and anticipation of the BoE’s decision. Meanwhile, USD/CAD climbs to around 1.3750, buoyed by the Fed’s hawkish sentiment. In addition, NZD/USD slips below 0.6000 amid similar remarks from the Fed, compounded by unsettled Kiwi markets awaiting key Chinese data.

Markets In Focus Today – EUR/USD

EUR/USD edges lower to near 1.0750 after hawkish remarks from a Fed official.

EUR/USD continues to lose ground due to the hawkish sentiment of the Fed prolonging elevated policy rates.Fed’s Kashkari said that the most likely scenario is for interest rates to stay unchanged for an extended period.Eurozone Retail Sales marked the most significant increase in March since September 2022, indicating strength in the consumer sector.EUR/USD extends its losses for the second successive session, trading around 1.0750 during the Asian session on Wednesday. The US Dollar (USD) gains ground due to the expectations of the Federal Reserve’s (Fed) prolonging higher interest rates. However, the softer US labor data from the last week has reignited hopes for potential interest rate cuts by the Federal Reserve (Fed) in 2024.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0732 | Positive Crossover | Bullish
  • MA 20 : 1.0730 | Positive Crossover | Bullish
  • MA 50 : 1.0764 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0727 | Positive Crossover | Bullish
  • MA 20 : 1.0695 | Positive Crossover | Bullish
  • MA 50 : 1.0790 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 51.0342 | Buy Zone | Bullish

Stochastic   Oscillator : 18.89 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.0826 R2 : 1.0893
  • S1 : 1.0609 S2 : 1.0542

Overall Sentiment : Neutral Market Direction : Buy

Trade Suggestion : Limit Buy : 1.0733 | Take Profit : 1.0810 | Stop Loss : 1.0690

GBP/USD

Pound Sterling falls due to US Dollar’s recovery, uncertainty ahead of BoE’s policy decision.

The Pound Sterling dips slightly below 1.2500 due to multiple headwinds.Investors expect UK interest rates to remain steady at 5.25% with less-hawkish BoE’s guidance on interest rates.The Pound Sterling (GBP) slips below the psychological support of 1.2500 against the US Dollar (USD) in Wednesday’s London session. The GBP/USD pair faces a sell-off due to multiple headwinds, such a sharp recovery in the US Dollar and uncertainty ahead of the Bank of England’s (BoE) interest rate decision, which will be announced on Thursday. Interest rates in the United Kingdom are expected to remain steady at 5.25% for the sixth time in a row. However, the BoE could turn slightly dovish on the interest rate outlook as policymakers are confident that the headline inflation could have returned to the desired rate of 2% in April, according to comments from BoE Governor Andrew Bailey in the annual Spring Meeting hosted by the International Monetary Fund (IMF) last month.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2509 | Negative Crossover | Bearish
  • MA 20 : 1.2516 | Negative Crossover | Bearish
  • MA 50 : 1.2563 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2520 | Negative Crossover | Bearish
  • MA 20 : 1.2480 | Negative Crossover | Bearish
  • MA 50 : 1.2602 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 44.4512 | Neutral Zone | Neutral

Stochastic   Oscillator : 0 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.2657 R2 : 1.2754
  • S1 : 1.2345 S2 : 1.2248

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 1.2498 | Take Profit : 1.2418 | Stop Loss : 1.2563

USD/CAD

USD/CAD rises to near 1.3750 due to the hawkish sentiment surrounding Fed.

USD/CAD appreciates due to the prevalent hawkish sentiment surrounding the Fed to prolong its higher interest rate.Fed’s Kashkari believes interest rates to stay unchanged for an extended period.The lower WTI price weakens the Canadian Dollar as Canada is the largest Oil exporter to the US.The USD/CAD pair continues to advance for the second consecutive session, hovering around 1.3750 during the Asian trading hours on Wednesday. This upward movement is attributed to the stronger US Dollar (USD), fueled by the prevailing hawkish sentiment surrounding the Federal Reserve (Fed) and expectations of sustained higher interest rates. Additionally, comments from Minneapolis Fed President Neel Kashkari on Tuesday contributed to the strength of the USD by suggesting a potential for rate hikes.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.3708 | Positive Crossover | Bullish
  • MA 20 : 1.3692 | Positive Crossover | Bullish
  • MA 50 : 1.3633 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.3699 | Positive Crossover | Bullish
  • MA 20 : 1.3721 | Positive Crossover | Bullish
  • MA 50 : 1.3616 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 58.2966 | Buy Zone | Bullish

Stochastic   Oscillator : 93.34 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.3840 R2 : 1.3927
  • S1 : 1.3559 S2 : 1.3472

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.3728 | Take Profit : 1.3785 | Stop Loss : 1.3692

NZD/USD

NZD/USD moves below 0.6000 due to hawkish remarks from Fed’s Kashkari.

NZD/USD continues to lose ground due to the sentiment of the Fed prolonging higher interest rates.The higher US Treasury yields contribute support for the US Dollar.The Kiwi market seems unsettled in anticipation of critical data releases from its primary trading partner, China.NZD/USD trades around 0.5990 during the Asian session on Wednesday, marking a second consecutive day of losses. This decline is likely influenced by the Federal Reserve’s (Fed) sentiment of maintaining higher interest rates for an extended period. Furthermore, hawkish remarks from Minneapolis Fed President Neel Kashkari have strengthened the US Dollar, thereby exerting downward pressure on the NZD/USD pair. President Kashkari’s comments suggest an expectation for rates to remain unchanged for a significant duration, as reported by Reuters. Although the probability of rate hikes is low, it’s not entirely ruled out.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.5970 | Positive Crossover | Bullish
  • MA 20 : 0.5966 | Positive Crossover | Bullish
  • MA 50 : 0.6003 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.5963 | Positive Crossover | Bullish
  • MA 20 : 0.5942 | Positive Crossover | Bullish
  • MA 50 : 0.6012 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 51.1323 | Buy Zone | Bullish

Stochastic   Oscillator : 34.71 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.6030 R2 : 0.6084
  • S1 : 0.5854 S2 : 0.5799

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Stop Sell : 0.5979 | Take Profit : 0.5904 | Stop Loss : 0.6043

Elsewhere In The Forex Market

USD/JPY up 0.05% to 155.40, The AUD/USD down 0.47% to 0.6566. The EUR/GBP up 0.18% at 0.8612. USD/CHF up 0.1% at 0.9084. AUD/NZD down 0.16% at 1.0975, The USD/CNY was up 0.11% at 7.2259, AUD/SEK down 0.12% at 7.1595, at the time of writing.

Key Economic Events & Data Release Today:

(EUR) German Industrial Production (MoM) (Mar) Forecast –0.6%, Previous 2.1% at 11:30. (USD) Crude Oil Inventories Forecast 1.430M, Previous 7.265M at 20:00.