. Daily Forex Analysis - EUR/USD Stabilizes, GBP/USD Strengthens.

Daily Forex Analysis – EUR/USD Stabilizes, GBP/USD Strengthens.

Daily Forex Analysis – EUR/USD Stabilizes, GBP/USD Strengthens.

05 Jul 2024

Introduction

EUR/USD stabilizes above 1.0800, bolstered by an improved Euro outlook and a weakened US Dollar ahead of French elections and US Nonfarm Payrolls data. Meanwhile, the Pound Sterling strengthens with Labour’s victory in the UK, and USD/JPY faces downward pressure amid intervention fears and Fed rate-cut prospects.

Markets In Focus Today – EUR/USD

EUR/USD stabilizes above 1.0800 with US NFP and French elections in focus.

EUR/USD refreshes a three-week high near 1.0830 due to multiple tailwinds. The Euro strengthens as the far right may fail to gain an outright majority in French elections. The US Dollar weakens due to multiple tailwinds, with US NFP in focus. EUR/USD posts a fresh three-week high near 1.0830 in Friday’s European session. The major currency pair strengthens as the Euro’s outlook improves ahead of the second round of French elections, scheduled for Sunday, and sheer weakness in the US Dollar (USD). The appeal for the Euro improves amid expectations that the Marine Le Pen-led far-right National Rally would fail to convert its victory of the first round into an absolute majority due to the tactical withdrawal of at least 200 candidates from Sunday’s legislative elections by a coalition of French President Emmanuel Macron-led entrist alliance and the left-wing. On Friday, investors await the Eurozone Retail Sales data for May, which will be published at 09:00 GMT.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0765 | Positive Crossover | Bullish
  • MA 20 : 1.0761 | Positive Crossover | Bullish
  • MA 50 : 1.0774 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0745 | Positive Crossover | Bullish
  • MA 20 : 1.0741 | Positive Crossover | Bullish
  • MA 50 : 1.0784 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 59.2697 | Buy Zone | Bullish

Stochastic   Oscillator : 91.8325 | 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 : 1.0795 | Take Profit : 1.0862 | Stop Loss : 1.0755

GBP/USD

Pound Sterling holds ground as Keir Starmer to be Britain’s next PM.

The Pound Sterling remains stronger due to a decisive victory for Keir Starmer’s Labour Party. Labour has secured more than 400 seats, with some still to count. The forecast for US Nonfarm Payrolls suggests an increase of 190,000 new jobs, down from the previous reading of 272,000. The Pound Sterling (GBP) extends its winning streak on Friday as the Labour Party secures 410 out of 650 seats in parliament, according to the BBC. This result would provide Labour with a majority of around 170 seats, ending 14 years of increasingly tumultuous Conservative-led government. United Kingdom’s (UK) Prime Minister Rishi Sunak conceded defeat in the national election on Friday, acknowledging that the opposition Labour Party had emerged victorious. “The Labour Party has won this general election and I have called Sir Keir Starmer to congratulate him on his victory,” Sunak said after winning his parliamentary seat in northern England, per Reuters.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2711 | Positive Crossover | Bullish
  • MA 20 : 1.2703 | Positive Crossover | Bullish
  • MA 50 : 1.2679 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2689 | Positive Crossover | Bullish
  • MA 20 : 1.2701 | Positive Crossover | Bullish
  • MA 50 : 1.2673 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 61.2206 | Buy Zone | Bullish

Stochastic   Oscillator : 89.4309 | Buy Zone | Neutral

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 : 1.2739 | Take Profit : 1.2815 | Stop Loss : 1.2693

USD/JPY

USD/JPY corrects slightly below 161.00 as Japan’s intervention fears intensify, US NFP eyed.

USD/JPY falls slightly below 161.00 as the US Dollar is under pressure due to firm Fed rate-cut prospects. Fears of BoJ’s intervention to support the Japanese Yen have intensified. Investors await the US NFP report for fresh guidance on interest rates The USD/JPY pair extends its correction to near 161.80 in Friday’s European session. The asset comes under pressure as fears of Japan’s intervention in the FX domain due to one-sided excessive moves, which have led to a sharp weakness in the Japanese Yen and a sheer sell-off in the US Dollar (USD) due to firm speculation that the Federal Reserve (Fed) to begin lowering interest rates from the September meeting. The Japanese Yen struggles to gain ground even though Bank of Japan (BoJ) policymakers have advocated tightening monetary policy further. The weak Japanese Yen has prompted consumer inflation expectations as Japan’s exports have become competitive globally, and import costs have increased significantly.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 160.5874 | Positive Crossover | Bullish
  • MA 20 : 159.5764 | Positive Crossover | Bullish
  • MA 50 : 157.4513 | Positive Crossover | Bullish

Simple :

  • MA 10 : 160.7850 | Negative Crossover | Bearish
  • MA 20 : 159.2532 | Positive Crossover | Bullish
  • MA 50 : 157.2226 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 65.3446 | Buy Zone | Bullish

Stochastic   Oscillator : 83.0520 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 161.4606 R2 : 163.0491
  • S1 : 156.3181 S2 : 154.7296

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 159.86 | Take Profit : 161.82 | Stop Loss : 158.69

AUD/USD

Australian Dollar holds gains ahead of the US NFP.

The Australian Dollar extends gains as persistently high inflation prompts the RBA to delay rate cuts. RBA’s Meeting Minutes suggest an upside risk for May’s Consumer Price Index (CPI). The US Dollar struggles as the softer US data raise expectations of the Fed reducing rates in 2024. The Australian Dollar (AUD) extends its gains for the fourth successive day on Friday. This upside could be attributed to persistently high inflation is prompting the Reserve Bank of Australia (RBA) to delay potential rate cuts. RBA’s June Meeting Minutes indicated that the “board judged the case for holding rates steady stronger than hiking.” The board emphasized the need to remain vigilant regarding upside risks to inflation, noting that data suggested an upside risk for May’s Consumer Price Index (CPI).

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6685 | Positive Crossover | Bullish
  • MA 20 : 0.6666 | Positive Crossover | Bullish
  • MA 50 : 0.6633 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6675 | Positive Crossover | Bullish
  • MA 20 : 0.6655 | Positive Crossover | Bullish
  • MA 50 : 0.6635 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 65.6525 | Buy Zone | Bullish

Stochastic   Oscillator : 90.6673 | 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 : 0.6686 | Take Profit : 0.6739 | Stop Loss : 0.6649

Elsewhere In The Forex Market

USD/CAD down 0.06% to 1.3605, The NZD/USD up 0.07% to 0.6120. The EUR/GBP down 0.01% at 0.8473. EUR/AUD up 0.01% at 1.6077. AUD/NZD up 0.07% at 1.005, The USD/CNY up 0.01% at 7.2697, AUD/SEK up 0.05% at 7.0658, at the time of writing.

Key Economic Events & Data Release Today:

(USD) Average Hourly Index (MoM) (Jun) Forecast 0.3%, Previous 0.4% at 08:30. (USD) Nonfarm Payrolls Forecast 191K, Previous 272K at 08:30. (USD) Unemployment Rate (Jun) Forecast 4.0%, Previous 4.0% at 08:30. (CAD) Employment Change (Jun) Forecast 27.3K, Previous 26.7K at 08:30. (USD) Fed Monetary Policy Report at 11:00. (EUR) ECB President Lagarde Speaks at 13:15.