. Daily Forex Analysis - EUR/USD Drops, GBP/USD Slips.

Daily Forex Analysis – EUR/USD Drops, GBP/USD Slips.

Daily Forex Analysis – EUR/USD Drops, GBP/USD Slips.

24 Jun 2024

Introduction

EUR/USD hovers near its lowest level since early May, pressured by political uncertainty in Europe and weak Eurozone PMIs. The Fed’s hawkish stance boosts the USD. GBP/USD remains subdued near mid-May lows, undermined by BoE rate cut bets. The JPY stays stable on verbal intervention. The AUD edges lower despite a hawkish RBA.

Markets In Focus Today – EUR/USD

EUR/USD hangs near its lowest level since early May, seems vulnerable below 1.0700 mark.

EUR/USD struggles to attract any meaningful buyers and is undermined by a combination of factors.Political uncertainty in Europe, along with Friday’s dismal Eurozone PMIs, seems to weigh on the Euro.The Fed’s relatively hawkish stance lifts the USD to a multi-week top and further acts as a headwind.The EUR/USD pair remains depressed for the third straight day on Monday and trades around the 1.0690-1.0685 region during the Asian session, just above its lowest level since early May. The shared currency continues to be undermined by uncertainties about the outcome of a snap election in France, which has been fueling concerns that a new government will worsen the fiscal situation in the Eurozone’s second-largest economy. Furthermore, the flash PMIs released on Friday indicated that the growth of business activity in the Eurozone slowed sharply in June. This, along with some follow-through US Dollar (USD) buying, turns out to be key factors exerting downward pressure on the EUR/USD pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0735 | Negative Crossover | Bearish
  • MA 20 : 1.0763 | Negative Crossover | Bearish
  • MA 50 : 1.0783 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0731 | Negative Crossover | Bearish
  • MA 20 : 1.0788 | Negative Crossover | Bearish
  • MA 50 : 1.0770 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 41.2328 | Neutral Zone | Neutral

Stochastic   Oscillator : 13.2680 | 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 : 1.0718 | Take Profit : 1.0666 | Stop Loss : 1.0759

GBP/USD

GBP/USD bears flirt with 100-day SMA, retain control near the lowest level since mid-May.

GBP/USD struggles near its lowest level since mid-May touched on Friday.Bets for a rate cut by the BoE in August continue to undermine the GBP.The USD climbs to its highest level since May 9 and also exerts pressure.The GBP/USD pair kicks off the new week on a subdued note and remains well within the striking distance of its lowest level since mid-May touched on Friday. Spot prices currently trade around the 1.2635 area, with bears awaiting a sustained break and acceptance below the 100-day Simple Moving Average (SMA) before positioning for an extension of the recent pullback from a multi-month peak. The British Pound (GBP) continues to be undermined by the Bank of England’s (BoE) dovish pause last week, which lifted bets for an interest rate cut at the August monetary policy meeting. Adding to this, the flash UK PMIs released on Friday showed that private sector business activity expanded in June at its slowest rate since last November. This, along with some follow-through US Dollar (USD) buying, turns out to be another factor weighing on the GBP/USD pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2692 | Negative Crossover | Bearish
  • MA 20 : 1.2701 | Negative Crossover | Bearish
  • MA 50 : 1.2671 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2706 | Negative Crossover | Bearish
  • MA 20 : 1.2730 | Negative Crossover | Bearish
  • MA 50 : 1.2627 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 43.8713 | Neutral Zone | Neutral

Stochastic   Oscillator : 7.1577 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.2798 R2 : 1.2882
  • S1 : 1.2527 S2 : 1.2443

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 1.2654 | Take Profit : 1.2583 | Stop Loss : 1.2708

USD/JPY

Japanese Yen remains stable due to verbal intervention.

The Japanese Yen holds ground, possibly due to verbal intervention by Japanese authorities.Japan’s Masato Kanda said he would intervene around the clock if necessary.The US Dollar edges higher as Fed officials keep delaying the timing of the first interest rate cut in 2024.The Japanese Yen (JPY) holds its position, possibly due to verbal intervention by the Japanese authorities. Japan’s top currency diplomat, Masato Kanda, stated on Monday that he would take appropriate measures if there were excessive movements in the foreign exchange market. Kanda cautioned against the negative economic effects of such movements and emphasized his readiness to intervene around the clock if necessary, per Reuters. The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, edges higher due to the Federal Reserve (Fed) officials delaying the timing of the first interest rate cut this year. According to the CME FedWatch Tool, investors are pricing in nearly 65.9% odds of a Fed rate cut in September, compared to 70.2% a week earlier.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 158.2680 | Positive Crossover | Bullish
  • MA 20 : 157.5102 | Positive Crossover | Bullish
  • MA 50 : 155.9374 | Positive Crossover | Bullish

Simple :

  • MA 10 : 157.9882 | Positive Crossover | Bullish
  • MA 20 : 157.2483 | Positive Crossover | Bullish
  • MA 50 : 156.1955 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 68.6593 | Buy Zone | Bullish

Stochastic   Oscillator : 97.6259 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 158.0528 R2 : 159.4982
  • S1 : 153.3732 S2 : 151.9278

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 158.52 | Take Profit : 159.88 | Stop Loss : 157.66

AUD/USD

Australian Dollar edges lower despite RBA’s hawkish stance.

The Australian Dollar declines as the US Dollar remains stronger on the hawkish Fed.The Aussie Dollar may limit its downside due to the RBA’s hawkish stance on rates trajectory.The US Dollar remains stable as Fed officials delay the timing of the first interest rate cut in 2024.The Australian Dollar (AUD) extends its losses for the third successive session on Monday. However, the AUD/USD pair may limit its downside due to the hawkish stance of the Reserve Bank of Australia (RBA). The RBA Governor Michele Bullock said during her latest press conference that the Board discussed potential rate hikes, dismissing considerations of rate cuts in the near term, as per ABC News. The US Dollar (USD) remains stable as Federal Reserve (Fed) officials delay the timing of the first interest rate cut this year. According to the CME FedWatch Tool, investors are now pricing in nearly 65.9% odds of a Fed rate cut in September, down from 70.2% a week earlier.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6642 | Positive Crossover | Bullish
  • MA 20 : 0.6637 | Positive Crossover | Bullish
  • MA 50 : 0.6612 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6639 | Positive Crossover | Bullish
  • MA 20 : 0.6639 | Positive Crossover | Bullish
  • MA 50 : 0.6596 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 52.5599 | Buy Zone | Bullish

Stochastic   Oscillator : 55.0442 | Neutral Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.6706 R2 : 0.6764
  • S1 : 0.6515 S2 : 0.6457

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 0.6618 | Take Profit : 0.6664 | Stop Loss : 0.6590

Elsewhere In The Forex Market

NZD/USD 0.04% to 0.6115, The USD/CHF down 0.02% to 0.8937. The EUR/GBP up 0.07% at 0.8463. EUR/AUD up 0.06% at 1.6105. AUD/NZD up 0.12% at 1.0867, The USD/CNY up 0.00% at 7.2612, AUD/SEK up 0.16% at 6.9891, at the time of writing.

Key Economic Events & Data Release Today:

(EUR) German Ifo Business Climate Index (Jun) Forecast 89.4, Previous 89.3 at 13:30. (EUR) Eurogroup Meetings at 20:30.