. Daily Forex Analysis - EUR/USD pressured, GBP/USD steady.

Daily Forex Analysis – EUR/USD pressured, GBP/USD steady.

Daily Forex Analysis – EUR/USD pressured, GBP/USD steady.

27 Jun 2024

Introduction

The Euro (EUR) struggled against the US Dollar (USD) this week, falling below 1.0700 due to a stronger Greenback and dovish ECB expectations. The USD rose on hawkish Fed bets, but retreated slightly on Thursday. US core PCE data on Friday will be key for the USD’s direction. Sterling (GBP) and NZD also found support against the USD. USD/CAD remained flat ahead of US data releases.

Markets In Focus Today – EUR/USD

EUR/USD pinned into low end below 1.0700 once again.

EUR/USD flubs the 1.0700 handle as bearish flows keep the Fiber pinned.Broad-market sentiment favored the Greenback on Wednesday as rate cut hopes dry up.Late-week key data prints to drive market momentum after an easy start to the week.EUR/USD recovers to test 1.0700 in the European session on Thursday. The renewed US Dollar selling in tandem with the USD/JPY retreat lends support to the pair. The pair’s upside, however, appears capped amid EU political jitters. US data is next in focus. The intense buying interest in the US Dollar (USD) led the USD Index (DXY) to build on Tuesday’s gains and advance to multi-week highs past the 106.00 barrier on Wednesday, exerting notable pressure on risk-sensitive assets and sending EUR/USD to fresh monthly lows near 1.0660. Furthermore, the macroeconomic scenario remained unchanged on both sides of the Atlantic, with the European Central Bank (ECB) still considering further rate cuts beyond the summer, while market bets suggested two more rate cuts later in the year.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0720 | Negative Crossover | Bearish
  • MA 20 : 1.0748 | Negative Crossover | Bearish
  • MA 50 : 1.0774 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0713 | Negative Crossover | Bearish
  • MA 20 : 1.0769 | Negative Crossover | Bearish
  • MA 50 : 1.0774 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 41.7210 | Sell Zone | Bearish

Stochastic   Oscillator : 13.3224 | Sell Zone | Negative

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 : 1.0707 | Take Profit : 1.0665 | Stop Loss : 1.0739

GBP/USD

Pound Sterling broadly steadies as traders turn focus towards US core PCE inflation.

The Pound Sterling rises slightly against the US Dollar but the overall direction remains uncertain.Economists expect that the US core PCE inflation softened in May.The uncertainty over the UK elections outcome keeps the Pound Sterling on its toes.The Pound Sterling (GBP) finds a cushion above the round-level support of 1.2600 against the US Dollar (USD) in Thursday’s London session. The GBP/USD pair gauges ground as the US Dollar registers a modest correction. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, edges down after posting a fresh eight-week high near 106.10. However, the near-term outlook of the US Dollar remains firm as investors are expected to trade cautiously ahead of the United States (US) core Personal Consumption Expenditure price index (PCE) data for May, which will be published on Friday. Core PCE inflation, the Federal Reserve’s (Fed) preferred inflation measure, is estimated to grow at a slower pace of 0.1% against 0.2% in April month-on-month. Annually, the underlying inflation is projected to decelerate to 2.6% from 2.8% in April.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2675 | Negative Crossover | Bearish
  • MA 20 : 1.2689 | Negative Crossover | Bearish
  • MA 50 : 1.2669 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2674 | Negative Crossover | Bearish
  • MA 20 : 1.2719 | Negative Crossover | Bearish
  • MA 50 : 1.2640 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 43.6919 | Neutral Zone | Neutral

Stochastic   Oscillator : 12.9648 | 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 : 1.2662 | Take Profit : 1.2590 | Stop Loss : 1.2716

NZD/USD

NZD/USD bounces off its lowest level since mid-May, remains below 0.6100 ahead of US data.

NZD/USD attracts some buyers near the 0.6070-65 area amid a modest USD downtick.The Fed’s hawkish outlook should limit the USD losses and cap the upside for the pair. Traders now look to Thursday’s US economic docket ahead of the key US PCE on Friday.The NZD/USD pair shows some resilience below the 50-day Simple Moving Average (SMA) and stages a modest recovery from the 0.6070-0.6065 area, or the lowest level since mid-May touched during the Asian session on Wednesday. The momentum lifts spot prices to a fresh daily top, around the 0.6085 zone in the last hour and is sponsored by a modest US Dollar (USD) weakness. In fact, the USD Index (DXY), which tracks the Greenback against a basket of currencies, reverses a part of the overnight strong move up to a nearly two-month peak amid bets that the Federal Reserve (Fed) will cut interest rates in September. Apart from this, the USD intraday slide lacks any obvious fundamental catalyst and is more likely to remain limited in the wake of the Fed’s hawkish outlook, forecasting only one interest rate cut in 2024.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6116 | Negative Crossover | Bearish
  • MA 20 : 0.6121 | Negative Crossover | Bearish
  • MA 50 : 0.6096 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6119 | Negative Crossover | Bearish
  • MA 20 : 0.6141 | Negative Crossover | Bearish
  • MA 50 : 0.6073 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 44.8491 | Neutral Zone | Neutral

Stochastic   Oscillator : 12.2123 | Sell Zone | Positive

Resistance   And Support Levels :

  • R1 : 0.6175 R2 : 0.6245
  • S1 : 0.5949 S2 : 0.5880

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 0.6102 | Take Profit : 0.6039 | Stop Loss : 0.6150

USD/CAD

USD/CAD flat lines around 1.3700, looks to US macro data for fresh impetus.

USD/CAD struggles to capitalize on a two-day-old recovery trend from a three-week through.The Fed rate-cut uncertainty caps the upside for the USD and acts as a headwind for the pair. Down tick in Crude Oil prices undermines the Loonie and lends some support to the major.The USD/CAD pair seesaws between tepid gains/minor losses during the Asian session on Thursday and for now, seems to have stalled its goodish rebound from the 1.3620-1.3615 region, or a three-week low touched on Tuesday. Spot prices currently trade near the 1.3700 mark, nearly unchanged for the day as traders now await the release of US macro data before placing fresh directional bets. The market focus will remain squarely on the US Personal Consumption Expenditures (PCE) Price Index on Friday, which is seen as the Federal Reserve’s (Fed) preferred inflation gauge. This will play a key role in influencing market expectations about the Fed’s future policy decisions, which, in turn, will drive the US Dollar (USD) demand and provide some meaningful impetus to the USD/CAD pair. In the meantime, Thursday’s US economic docket – featuring the final Q1 GDP print, Durable Goods Orders, the usual Initial Weekly Jobless Claims and Pending Home Sales – will be looked upon for short-term trading opportunities.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.3692 | Negative Crossover | Bearish
  • MA 20 : 1.3693 | Negative Crossover | Bearish
  • MA 50 : 1.3674 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.3695 | Negative Crossover | Bearish
  • MA 20 : 1.3698 | Negative Crossover | Bearish
  • MA 50 : 1.3685 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 50.0611 | Neutral Zone | Neutral

Stochastic   Oscillator : 35.2071 | Neutral 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 : 1.3698 | Take Profit : 1.3628 | Stop Loss : 1.3746

Elsewhere In The Forex Market

AUD/USD up 0.24% to 0.6663, The USD/CHF up 0.02% to 0.8976. The EUR/GBP down 0.00% at 0.8461. EUR/AUD down 0.01% at 1.6047. AUD/NZD up 0.04% at 1.0934, The USD/CNY up 0.06% at 7.2666, AUD/SEK up 0.46% at 7.0601, at the time of writing.

Key Economic Events & Data Release Today:

(GBP) BoE Gov Bailey Speaks at 05:30. (USD) GDP (QoQ) (Q1) Forecast 1.3%, Previous 3.4% at 08:30. (USD) Initial Jobless Claims Forecast 236K, Previous 238K at 08:30. (USD) Pending Home Sales (MoM) (May) Forecast 0.6%, Previous –7.7% at 10:00. (JPY) Industrial Production (MoM) (May) Forecast 2.0%, Previous –0.9% at 19:15.