. Daily Forex Analysis - EUR/USD Nears 1.0900, GBP/USD Holds Firm

Daily Forex Analysis – EUR/USD Nears 1.0900, GBP/USD Holds Firm

Daily Forex Analysis – EUR/USD Nears 1.0900, GBP/USD Holds Firm

28 May 2024

Introduction

EUR/USD nears 1.0900 as the US Dollar continues to weaken, driven by upbeat sentiment and Fed speculation. Meanwhile, GBP/USD remains firm above 1.2750, supported by a stable BoE outlook. NZD/USD rises above 0.6150 amid Chinese market support, and USD/CAD dips to 1.3600 due to softer US Dollar and weak Canadian spending data.

Markets In Focus Today – EUR/USD

EUR/USD rises toward 1.0900 as US Dollar weakness persists.

EUR/USD is advancing toward 1.0900, closing in on two-week highs in early Europe on Tuesday. Extended US Dollar weakness and an upbeat mood contribute to the pair’s latest uptick. The focus now remains on more Fedspeak. The US Dollar (USD) extended its recent decline, lending further legs to the risk complex and sponsoring another test of the 1.0870 region by EUR/USD on Monday.In fact, the second consecutive daily advance in the pair came amidst further weakness in the Greenback in response to the inactivity on Memorial Day, although always against the backdrop of renewed speculation that the Federal Reserve (Fed) might maintain its restrictive stance longer than expected.Looking ahead, the relatively subdued economic fundamentals in the Eurozone, coupled with the resilience of the US economy, support the ongoing narrative of Fed-ECB policy divergence and lean towards a stronger Dollar in the long run. Considering the rising probability of the ECB reducing rates before the Fed, the potential for further weakness in EUR/USD should be considered in the medium term.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0841 | Positive Crossover | Bullish
  • MA 20 : 1.0815 | Positive Crossover | Bullish
  • MA 50 : 1.0796 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0854 | Positive Crossover | Bullish
  • MA 20 : 1.0808 | Positive Crossover | Bullish
  • MA 50 : 1.0775 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 62.1753 | Buy Zone | Bullish

Stochastic   Oscillator : 94.43 | Buy Zone | Positive

Resistance   And Support Levels :

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

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Stop Buy : 1.0881 | Take Profit : 1.0943 | Stop Loss : 1.0843

GBP/USD

GBP/USD consolidates its upside above 1.2750, investors await fresh catalysts.

GBP/USD trades with mild positive bias near 1.2770 in Tuesday’s early Asian session. Traders lower their bets on interest rate cuts by the Fed amid strong US data and the Fed’s hawkish comments. The BoE might stay on hold on the rate, boosting the GBP. The GBP/USD pair consolidates its upside around 1.2770 after reaching two-month highs during the early Asian session on Tuesday. The USD Index (DXY) remains under some selling pressure at around 104.60, which provides some support to the major pair. Traders await the US Conference Board’s Consumer Confidence, FHFA’s House Price Index, along with the Fed’s Neel Kashkari, Mary Daly, and Lisa Cook speeches later on Tuesday. The markets lower their bets on interest rate cuts by the US Federal Reserve (Fed) and see a 49% chance of rate cuts in September, down from 63% recorded a week ago, according to the CME FedWatch tool. The US key data this week might offer some hints about the economic outlook and inflation trajectory. The first reading of US GDP economic growth in the first quarter will be due on Thursday ahead of the US Core Personal Consumption Expenditures Price Index (Core CPE), the Fed’s preferred inflation gauge. The hotter-than-expected US inflation data might lift the Greenback and weigh on the GBP/USD in the near term.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2706 | Positive Crossover | Bullish
  • MA 20 : 1.2652 | Positive Crossover | Bullish
  • MA 50 : 1.2614 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2716 | Positive Crossover | Bullish
  • MA 20 : 1.2626 | Positive Crossover | Bullish
  • MA 50 : 1.2581 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 69.6615 | Buy Zone | Bullish

Stochastic   Oscillator : 94.24 | Buy Zone | Positive

Resistance   And Support Levels :

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

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Stop Buy : 1.2786 | Take Profit : 1.2865 | Stop Loss : 1.2743

NZD/USD

NZD/USD extends its upside above 0.6150, China’s property support measures boost Kiwi.

NZD/USD trades in positive territory for the fifth consecutive day around 0.6165 on Tuesday. Investors will closely watch the US PCE, which is expected to show an increase of 2.8% YoY in April.China’s Shanghai has announced support measures to boost the housing market. The NZD/USD pair extends the rally near 0.6165 on Tuesday during the early Asian session. The pair edges higher to the highest level since March amid the softer US Dollar (USD). Investors await the fresh catalysts, with the US Gross Domestic Product Annualized (GDP) and Core Personal Consumption Expenditures Price Index due later this week. Also, the Reserve Bank of New Zealand’s (RBNX) Governor Orr’s speech will be closely watched on Friday. The markets lower their bets on interest rate cuts by the US Federal Reserve (Fed) following the hawkish stance from Fed officials and stronger-than-expected US economic data. Investors will keep an eye on the key US PCE inflation data on Friday. The US Core PCE is projected to show an increase of 0.3% MoM and 2.8% YoY in April. The hotter inflation might dampen expectations of Fed rate cuts and boost the Greenback.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6110 | Positive Crossover | Bullish
  • MA 20 : 0.6073 | Positive Crossover | Bullish
  • MA 50 : 0.6044 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6119 | Positive Crossover | Bullish
  • MA 20 : 0.6060 | Positive Crossover | Bullish
  • MA 50 : 0.6005 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 68.8818 | Buy Zone | Bullish

Stochastic   Oscillator : 100.00 | Buy Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 0.6139 | Take Profit : 0.6209 | Stop Loss : 0.6102

USD/CAD

USD/CAD extends downside to 1.3600 amid soft US Dollar.

USD/CAD edges down to 1.3600 as the US Dollar’s appeal is uncertain.US core PCE Price Index is projected to have grown steadily in April.Canada’s weak household spending and consistently easing price pressures prompt BoC rate-cut prospects.The USD/CAD pair drops further to near the round-level support of 1.3600 in Tuesday’s Asian session. The Loonie asset is under pressure as the US Dollar (USD) weakens even though traders seethe Federal Reserve (Fed) keeping interest rates steady in the September meeting. The market sentiment is upbeat despite the fact that rate-cuts from the Fed has been delayed. S&P 500 futures have posted some decent gains in the Tokyo session. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, has extended its losing spell for the third trading session on Tuesday and has dropped to near 104.40. Risks of Canada’s inflation remaining persistent have eased due to weak consumer spending and dismal economic outlook, prompting bets favoring rate cuts in June. This week, investors will focus on the Q1 Gross Domestic Product (GDP) data, which will indicate the economic health of Canada.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.3653 | Negative Crossover | Bearish
  • MA 20 : 1.3659 | Negative Crossover | Bearish
  • MA 50 : 1.3639 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.3642 | Negative Crossover | Bearish
  • MA 20 : 1.3664 | Negative Crossover | Bearish
  • MA 50 : 1.3650 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 45.6147 | Neutral Zone | Neutral

Stochastic   Oscillator : 1.12 | Sell Zone | Negative

Resistance   And Support Levels :

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

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 1.3632 | Take Profit : 1.3555 | Stop Loss : 1.3683

Elsewhere In The Forex Market

USD/CHF down 0.16% to 0.9117, The AUD/USD up 0.16% to 0.6662. The EUR/GBP up 0.19% at 0.8515. EUR/AUD up 0.05% at 1.6326. AUD/NZD down 0.11% at 1.0808, The USD/CNY up 0.04% at 7.2463, AUD/SEK down 0.42% at 7.0341, at the time of writing.

Key Economic Events & Data Release Today:

(AUD) Retail Sales (MoM) (Apr) Forecast –0.3%, Previous –0.4% at 07:00. (USD) CB Consumer Confidence (May) Forecast 96.0, Previous 97.0 at 19:30.