. Daily Forex Analysis - EUR/USD Holds Firm, GBP/USD Consolidates.

Daily Forex Analysis – EUR/USD Holds Firm, GBP/USD Consolidates.

Daily Forex Analysis – EUR/USD Holds Firm, GBP/USD Consolidates.

06 May 2024

Introduction

EUR/USD maintains its positive position above 1.0750 as investors await significant Eurozone data releases. The upcoming HCOB Purchasing Managers’ Index (PMI) and Eurozone Producer Price Index (PPI) data are highly anticipated, with traders closely monitoring their potential impact on market sentiment. In Monday’s London session, GBP struggles within a narrow range near 1.2550 against USD. The rebound in USD is cited as a contributing factor to the movement in the USD/JPY pair. Following softer US jobs data, the Australian Dollar surged on the back of increased risk appetite, supported by bullish sentiment surrounding the RBA.

Markets In Focus Today – EUR/USD

EUR/USD holds positive ground above 1.0750 ahead of Eurozone PMI, PPI data.

The EUR/USD pair trades in positive territory for the fourth consecutive day near 1.0765 on Monday during the early Asian trading hours. The softer US Dollar (USD) provides some support to the major pair. Traders await the HCOB Purchasing Managers’ Index (PMI) data from Germany and the Eurozone, along with the Eurozone Producer Price Index (PPI), due later in the day. The recent US Employment data from the US Bureau of Labor Statistics (BLS) showed on Friday that US job growth slowed more than expected in April. The Nonfarm Payrolls (NFP) came in weaker than expected, rising by 175K in April from 315K rise (revised from 303K) in March, the smallest gain since October 2023. Meanwhile, wage inflation, as measured by the change in the Average Hourly Earnings, dropped to 3.9% on a yearly basis from 4.1%. The Unemployment Rate ticked up to 3.9% in April from 3.8% in March. The weaker-than-expected US data boosted the odds of a September rate cut from the US central bank. Financial markets have priced in a nearly 90% chance of September rate cuts, up from 55% last week, according to the CME FedWatch tool. This, in turn, weighs on the Greenback and creates a tailwind for the EUR/USD pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0723 | Positive Crossover | Bullish
  • MA 20 : 1.0725 | Positive Crossover | Bullish
  • MA 50 : 1.0766 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0717 | Positive Crossover | Bullish
  • MA 20 : 1.0700 | Positive Crossover | Bullish
  • MA 50 : 1.0793 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 54.2610 | Buy Zone | Bullish

Stochastic   Oscillator : 78.0849 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.0827 R2 : 1.0894
  • S1 : 1.0610 S2 : 1.0543

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.0740 | Take Profit : 1.0809 | Stop Loss : 1.0698

GBP/USD

Pound Sterling consolidates in holiday-shortened week, BoE policy in focus.

The BoE could provide meaningful cues on the timing of rate cuts amid easing price pressures.The Pound Sterling (GBP) is stuck in a tight range around 1.2550 against the US Dollar (USD) in Monday’s London session. The GBP/USD pair is expected to remain less volatile and will be guided by the market sentiment as the United Kingdom markets are closed on account of Early May. The GBP/USD struggles for a direction as the US Dollar consolidates in the aftermath of United States Nonfarm Payrolls (NFP) and the ISM Services Purchasing Managers Index (PMI) data for April. The US Dollar Index (DXY), which tracks the US Dollar’s value against six major currencies, trades sideways above 105.00. Slower US job growth and a contraction in the Services PMI have raised concerns over the economic outlook.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2522 | Positive Crossover | Bullish
  • MA 20 : 1.2523 | Positive Crossover | Bullish
  • MA 50 : 1.2570 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2514 | Positive Crossover | Bullish
  • MA 20 : 1.2492 | Positive Crossover | Bullish
  • MA 50 : 1.2610 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 54.4327 | Buy Zone | Bullish

Stochastic   Oscillator : 80.5823 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.2658 R2 : 1.2754
  • S1 : 1.2345 S2 : 1.2249

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.2536 | Take Profit : 1.2643 | Stop Loss : 1.2478

USD/JPY

USD/JPY inches higher to 153.70 amid a firmer US Dollar.

USD/JPY snaps its three-day losing streak on Monday, trading around 153.70 during the early European hours. This decline in the USD/JPY pair could be attributed to the rebound in the US Dollar (USD). The US Dollar Index (DXY), which gauges the performance of the US Dollar (USD) against six major currencies, hovers around 105.10, by the press time. The lower US Treasury yields could limit the advance of the Greenback. However, the US Dollar struggled due to softer-than-expected US jobs data released on Friday. This development revived expectations for potential interest rate cuts by the US Federal Reserve (Fed) later this year. In Japan, markets are closed on Monday due to a national holiday, with intervention risks lingering. Last week, the Japanese Yen (JPY) appreciated amidst potential government intervention by Japanese authorities. Reuters reported that data from the Bank of Japan (BoJ) indicated that Japanese authorities may have allocated approximately ¥6.0 trillion on April 29 and ¥3.66 trillion on May 1 to reinforce the JPY.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 154.5918 | Negative Crossover | Bearish
  • MA 20 : 154.2236 | Negative Crossover | Bearish
  • MA 50 : 152.4608 | Positive Crossover | Bullish

Simple :

  • MA 10 : 155.2482 | Negative Crossover | Bearish
  • MA 20 : 154.5422 | Negative Crossover | Bearish
  • MA 50 : 151.9392 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 49.6893 | Neutral Zone | Neutral

Stochastic   Oscillator : 15.0283 | Sell Zone | Positive

Resistance   And Support Levels :

  • R1 : 159.8323 R2 : 162.0514
  • S1 : 152.6484 S2 : 150.4293

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 154.46 | Take Profit : 151.89 | Stop Loss : 156.26

AUD/USD

Australian Dollar holds ground amid improved risk appetite, RBA decision awaited.

The Australian Dollar rose due to risk-on sentiment after softer US jobs data released on Friday.The Australian Dollar derived strength from the hawkish sentiment surrounding the RBA.The Nonfarm Payrolls report indicated fewer jobs added than anticipated in April, marking a notable deceleration from March’s reading.The Australian Dollar (AUD) maintained its winning streak for the fourth consecutive session on Monday, buoyed by a hawkish sentiment surrounding the Reserve Bank of Australia (RBA). This optimism bolsters the strength of the Aussie Dollar, providing support to the AUD/USD pair. The Australian central bank is widely anticipated to hold the cash rate steady at a 12-year high of 4.35% in its upcoming Tuesday meeting. However, there are expectations that it may reintroduce a soft tightening bias, particularly after last week’s higher-than-expected inflation data, as reported by The Australian Financial Review.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6549 | Positive Crossover | Bullish
  • MA 20 : 0.6529 | Positive Crossover | Bullish
  • MA 50 : 0.6533 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6540 | Positive Crossover | Bullish
  • MA 20 : 0.6505 | Positive Crossover | Bullish
  • MA 50 : 0.6533 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 61.3695 | Buy Zone | Bullish

Stochastic   Oscillator : 89.2626 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.6602 R2 : 0.6669
  • S1 : 0.6387 S2 : 0.6320

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 0.6586 | Take Profit : 0.6667 | Stop Loss : 0.6541

Elsewhere In The Forex Market

NZD/USD up 0.14% to 0.6018, The USD/CAD down 0.05% to 1.3678. The EUR/GBP down 0.12% at 0.8558. USD/CHF up 0.4% at 0.9048. AUD/NZD up 0.12% at 1.1009, The USD/CNY down 0.39% at 7.2116, AUD/SEK up 0.43% at 7.1799, at the time of writing.

Key Economic Events & Data Release Today:

(EUR) German Service PMI (Apr) Forecast 53.5, Previous 50.1 at 13:25. (USD) FOMC Member Williams Speaks at 22:30 .