. Daily Forex Analysis - EUR/USD Steady, USD/JPY Soft.

Daily Forex Analysis – EUR/USD Steady, USD/JPY Soft.

Daily Forex Analysis – EUR/USD Steady, USD/JPY Soft.

10 Jul 2024

Introduction

EUR/USD remains steady above 1.0800, supported by Fed Powell’s caution on the US labor market and easing concerns over a French financial crisis. Investors await US CPI data for June. Meanwhile, GBP/USD shows resilience, USD/CAD holds ground due to lower oil prices, and JPY remains soft ahead of Powell’s testimony.

Markets In Focus Today – EUR/USD

EUR/USD clings to gains in countdown to US Inflation.

EUR/USD holds gains tight range above 1.0800 due to multiple tailwinds.Fed Powell’s caution on the US labor market pushes the US Dollar on the backfoot.The Euro gains as the far right’s defeat eases upside risks to widening French financial crisis.EUR/USD turns sideways around 1.0800 in Wednesday’s European session after a modest corrective move from an almost four-week high of 1.0850. The major currency pair shifts to the sidelines as investors await the United States (US) Consumer Price Index (CPI) data for June, which will be published on Thursday. Economists expect that core inflation, which excludes volatile food and energy items, grew steadily by 0.2% and 3.4% on a monthly and annual basis, respectively, in June. Annual headline inflation is estimated to have decelerated to 3.1% from May’s reading of 3.3%, while the monthly figure is expected to have grown by 0.1% after remaining unchanged previously.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0789 | Positive Crossover | Bullish
  • MA 20 : 1.0776 | Positive Crossover | Bullish
  • MA 50 : 1.0779 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0779 | Positive Crossover | Bullish
  • MA 20 : 1.0748 | Positive Crossover | Bullish
  • MA 50 : 1.0791 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 56.3513 | Buy Zone | Bullish

Stochastic   Oscillator : 84.5524 | Buy Zone | Negative

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 : 1.0792 | Take Profit : 1.0845 | Stop Loss : 1.0761

GBP/USD

Pound Sterling steadies as Fed Powell admits risks to US labor market strength.

The Pound Sterling exhibits strength against the US Dollar as Fed’s Powell sees softness in the US labor market strength.The Fed chief did not guide any specific rate-cut path.UK GDP for May and US Inflation for June have come under the spotlight.The Pound Sterling (GBP) edges higher against the US Dollar (USD) in Wednesday’s early London session after a mild correction from almost a four-week high of 1.2850 this week. The broader appeal of the GBP/USD pair remains firm amid strong speculation that the Federal Reserve (Fed) will start reducing interest rates during the September meeting. The odds for the Fed pivoting to policy normalization remain firm even though Fed Chair Jerome Powell reiterated in his semi-annual Congressional testimony on Tuesday, refrained from providing any specific rate-cut path for this year. Powell argued in favor of maintaining interest rates at their current levels for long until they get evidence that inflation will return to the desired rate of 2%.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2753 | Positive Crossover | Bullish
  • MA 20 : 1.2729 | Positive Crossover | Bullish
  • MA 50 : 1.2693 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2732 | Positive Crossover | Bullish
  • MA 20 : 1.2709 | Positive Crossover | Bullish
  • MA 50 : 1.2689 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 61.0448 | Buy Zone | Bullish

Stochastic   Oscillator : 78.8269 | 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 : 1.2772 | Take Profit : 1.2857 | Stop Loss : 1.2724

USD/CAD

USD/CAD holds ground around 1.3650 due to lower Oil prices, hawkish Fed.

The commodity-linked CAD struggles as Crude Oil price continues its losing streak for the fourth successive day.WTI price extends its losses due to the diminished impact of Hurricane Beryl.Fed Chair Powell stated, “First-quarter data did not support the greater confidence in the inflation path.”USD/CAD holds its gains, trading around 1.3640 during the early European hours on Wednesday. The weakening of the commodity-linked Canadian Dollar (CAD) could be attributed to lower crude Oil prices, given the fact that Canada is the biggest Oil exporter to the United States (US). West Texas Intermediate (WTI) Oil price trades around $80.30 per barrel at the time of writing. This drop in Oil prices is attributed to the diminished impact of Hurricane Beryl. The storm affected a major Oil-producing region in Texas but caused less damage than initially expected by the markets. Traders anticipate the second semi-annual testimony by Fed Chair Jerome Powell and speeches by the Fed’s Michelle Bowman and Austan Goolsbee on Wednesday. Additionally, attention will be on the US Consumer Price Index (CPI) data, set to be released on Thursday.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.3651 | Negative Crossover | Bearish
  • MA 20 : 1.3666 | Negative Crossover | Bearish
  • MA 50 : 1.3667 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.3658 | Negative Crossover | Bearish
  • MA 20 : 1.3679 | Negative Crossover | Bearish
  • MA 50 : 1.3677 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 44.7557 | Neutral Zone | Neutral

Stochastic   Oscillator : 20.8170 | Sell Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.3763 R2 : 1.3807
  • S1 : 1.3618 S2 : 1.3574

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 1.3644 | Take Profit : 1.3586 | Stop Loss : 1.3683

USD/JPY

Japanese Yen remains soft ahead of Fed Powell’s second testimony.

The Japanese Yen declines as the US Dollar holds ground ahead of Fed Chair Powell’s second testimony.Powell stated that a rate cut is not appropriate until the Fed gains confidence that inflation is moving toward 2%.The Bank of Japan is poised to assess a viable strategy for scaling back its government bond purchases.The Japanese Yen (JPY) holds mild losses against the US Dollar early Wednesday, in the face of the latest Reuters report on potential economic revisions by the Bank of Japan (BoJ) at its July meeting. Reuters reported on Wednesday, citing unnamed sources, the Bank of Japan will likely trim this year’s economic growth forecast and project inflation will stay around its 2% target in coming years at its meeting this month. USD/JPY may limit its upside, driven by a firmer US Dollar (USD), following Federal Reserve Chairman Jerome Powell’s testimony before the US Senate. Powell noted improved inflation figures but maintained the Fed’s cautious approach.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 160.8752 | Positive Crossover | Bullish
  • MA 20 : 159.9975 | Positive Crossover | Bullish
  • MA 50 : 157.8736 | Positive Crossover | Bullish

Simple :

  • MA 10 : 161.1425 | Positive Crossover | Bullish
  • MA 20 : 159.8952 | Positive Crossover | Bullish
  • MA 50 : 157.5302 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 70.02 | Buy Zone | Bullish

Stochastic   Oscillator : 80.6269 | Buy Zone | Positive

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 : 160.36 | Take Profit : 161.85 | Stop Loss : 159.39

Elsewhere In The Forex Market

AUD/USD down 0.02% to 0.6739, The NZD/USD down 0.89% to 0.6070. The EUR/GBP down 0.01% at 0.8451. EUR/AUD up 0.04% at 1.6047. AUD/NZD up 0.87% at 1.1101, The USD/CNY up 0.05% at 7.2759, AUD/SEK up 0.07% at 7.1182, at the time of writing.

Key Economic Events & Data Release Today:

(USD) Fed Chair Powell Testifies at 10:00. (USD) Crude Oil Inventories Forecast 0.700M, Previous –12.157M at 10:30. (GBP) BoE MPC Member Pill Speaks at 09:30.