. Daily Forex Analysis - EUR/USD Rises and GBP/USD Holds.

Daily Forex Analysis – EUR/USD Rises and GBP/USD Holds.

Daily Forex Analysis – EUR/USD Rises and GBP/USD Holds.

09 Jul 2024

Introduction

The Euro gains ground against the US Dollar after a surprise leftist alliance wins the French election. Investors await Fed Chair Powell’s testimony for clues on future interest rates. The Pound and Aussie Dollar also see movement as traders react to central bank policies and economic data.

Markets In Focus Today – EUR/USD

EUR/USD rises toward 1.0850 as traders digest the initial shock of the French election.

EUR/USD continues to rise despite the initial surprise from France’s election results. A leftist alliance unexpectedly took the lead and kept Marine Le Pen’s far-right party out of the leadership race.Fed Chair Powell will provide a broad overview of the economy and monetary policy to the US Congress on Tuesday.EUR/USD continues its winning streak for the sixth day, trading around 1.0830 during the Asian session on Tuesday. The Euro continues to advance as investors digest the initial shock of France’s election results. A surprise leftist alliance has taken the lead, preventing Marine Le Pen’s far-right party from dominating the leadership race following a significant upset in previous European Parliamentary elections.Federal Reserve Chairman Jerome Powell will deliver his testimony on “The Semi-annual Monetary Policy Report” to the US Congress on Tuesday.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0785 | Positive Crossover | Bullish
  • MA 20 : 1.0773 | Positive Crossover | Bullish
  • MA 50 : 1.0778 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0766 | Positive Crossover | Bullish
  • MA 20 : 1.0748 | Positive Crossover | Bullish
  • MA 50 : 1.0789 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 57.0741 | Buy Zone | Bullish

Stochastic   Oscillator : 90.1769 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.0860 R2 : 1.0919
  • S1 : 1.0669 S2 : 1.0610

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.0802 | Take Profit : 1.0865 | Stop Loss : 1.0767

GBP/USD

Pound Sterling clings to gains near 1.2800 with Fed Powell’s testimony in focus.

The Pound Sterling holds gains against the US Dollar with a focus on Fed Powell’s testimony.BoE’s Haskel argued in favor of holding interest rates steady at their current levels.This week, investors will pay close attention to the US CPI and UK factory data.The Pound Sterling (GBP) ranges above 1.2800 against the US Dollar (USD) in Tuesday’s London session. The GBP/USD pair turns quiet as investors await the Federal Reserve (Fed) Chair Jerome Powell’s semi-annual Congressional testimony, which is scheduled at 14:00 GMT. Fed Powell is expected to acknowledge some progress made on inflation and will remain data-dependent for rate cuts. Powell could continue to refrain from providing any timeframe for rate cuts and emphasize the need to keep interest rates higher until policymakers see inflation declining for months. However, he could also show some concerns over moderating United States (US) labor market strength.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2746 | Positive Crossover | Bullish
  • MA 20 : 1.2723 | Positive Crossover | Bullish
  • MA 50 : 1.2689 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2716 | Positive Crossover | Bullish
  • MA 20 : 1.2710 | Positive Crossover | Bullish
  • MA 50 : 1.2684 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 62.5689 | Buy Zone | Bullish

Stochastic   Oscillator : 87.3089 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.2800 R2 : 1.2859
  • S1 : 1.2611 S2 : 1.2552

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.2774 | Take Profit : 1.2857 | Stop Loss : 1.2733

AUD/USD

Australian Dollar improves as strong inflation prompts RBA to maintain a hawkish stance.

The Australian Dollar gains ground due to expectations that the RBA might lag in the global rate-cutting cycle.Australia’s 10-year government bond yield rises to near 4.4% as foreign investors seek protection from political uncertainties.Fed Chair Powell will deliver “The Semiannual Monetary Policy Report” to the US Congress on Tuesday.The Australian Dollar (AUD) recovers its recent losses, trading near its six-month high of 0.6761 on Tuesday. This upside of the AUD is attributed to the rising expectations that the Reserve Bank of Australia (RBA) might lag in the global rate-cutting cycle or raise interest rates again due to strong inflation data for May. Australia’s 10-year government bond yield remained steady at around 4.4%, as high yields attract foreign capital from investors seeking protection from political uncertainties in the US and Europe. The RBA’s June Meeting Minutes highlighted policymakers’ emphasis on the need to stay vigilant regarding inflation risks. They noted that a significant rise in prices could necessitate substantially higher interest rates.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6704 | Positive Crossover | Bullish
  • MA 20 : 0.6680 | Positive Crossover | Bullish
  • MA 50 : 0.6642 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6694 | Positive Crossover | Bullish
  • MA 20 : 0.6669 | Positive Crossover | Bullish
  • MA 50 : 0.6644 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 64.7721 | Buy Zone | Bullish

Stochastic   Oscillator : 88.4182 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.6698 R2 : 0.6728
  • S1 : 0.6600 S2 : 0.6570

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 0.6706 | Take Profit : 0.6760 | Stop Loss : 0.6675

USD/CHF

USD/CHF holds positive ground above 0.8950, Fed Powell’s testimony eyed.

USD/CHF trades on a stronger note near 0.8980 in Tuesday’s early European session. The US Dollar edges lower due to a potential September rate cut from the Fed. Political uncertainties both within Europe and globally, might support the CHF. The USD/CHF pair trades in positive territory for the second consecutive day around 0.8980 on Tuesday during the early European session. Meanwhile, the USD Index (DXY) consolidates near the 105.00 level ahead of Federal Reserve (Fed) Chair Jerome Powell’s semi-annual monetary policy testimony on Tuesday. The rising expectation that the US Fed will start cutting the interest rate earlier than previously expected has dragged the Greenback lower. Fed Powell’s testimony might offer some hints about whether the possibility of a September rate cut has improved with the latest data. If Powell delivers hawkish comments, this might provide some support for the US Dollar (USD). Financial markets are now pricing in a nearly 76% chance of a Fed rate cut in September, up from 71% last Friday, according to the CME FedWatch tool.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.8979 | Positive Crossover | Bullish
  • MA 20 : 0.8974 | Positive Crossover | Bullish
  • MA 50 : 0.8986 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.8992 | Negative Crossover | Bearish
  • MA 20 : 0.8949 | Positive Crossover | Bullish
  • MA 50 : 0.9011 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 51.3963 | Buy Zone | Bullish

Stochastic   Oscillator : 63.4966 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 0.9028 R2 : 0.9078
  • S1 : 0.8869 S2 : 0.8820

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 0.8995 | Take Profit : 0.8906 | Stop Loss : 0.9063

Elsewhere In The Forex Market

USD/CAD up 0.05% to 1.3640, The NZD/USD down 0.11% to 0.6118. The EUR/GBP down 0.01% at 0.8451. EUR/AUD down 0.06% at 1.6057. AUD/NZD up 0.15% at 1.1015, The USD/CNY up 0.01% at 7.2697, AUD/SEK down 0.11% at 7.1218, at the time of writing.

Key Economic Events & Data Release Today:

(USD) Fed Chair Powell Testifies at 10:00. (NZD) RBNZ Interest Rate Decision Forecast 5.50%, Previous 5.50% at 22:00. (NZD) RBNZ Rate Statement at 22:00.