. Daily Forex Analysis - EUR/USD Steady, GBP/USD Falls.

Daily Forex Analysis – EUR/USD Steady, GBP/USD Falls.

Daily Forex Analysis – EUR/USD Steady, GBP/USD Falls.

14 Jun 2024

Introduction

EUR/USD trades flat near 1.0735 as a stronger US Dollar and European political uncertainty weigh on the Euro. The Fed’s hawkish outlook and the ECB’s rate cuts impact the pair, with key insights expected from the ECB’s Lagarde and US economic reports. Concurrently, the Pound and Yen weaken against the resilient US Dollar.

Markets In Focus Today – EUR/USD

EUR/USD holds steady below 1.0750 amid stronger US Dollar, political uncertainty in France.

EUR/USD trades flat near 1.0735 amid the firmer US Dollar in Friday’s early Asian session. The political uncertainty in Europe and the ECB’s rate cuts weigh on the Euro. The US Fed signaled that it will cut its key interest rate just once by 25 bps this year.The EUR/USD pair trades on a flat note around 1.0735 on Friday during the early Asian trading hours. The upside of the pair might be limited amid the uncertainty surrounding European parliamentary elections. Investors will take more cues from the ECB’s Christine Lagarde speech and the preliminary US Michigan Consumer Sentiment report for June. The combination of political uncertainty in Europe and rate cuts from the European Central Bank (ECB) might exert some selling pressure on the Euro (EUR) against the Greenback for the time being. The ECB cut interest rates by 25 basis points (bps) during its June meeting last week, a move widely expected by market participants. It takes the ECB’s key rate to 3.75% from a record 4% since September 2023. Financial markets have fully priced one further reduction this year, but economists polled by Reuters last week forecast two more cuts taking place towards the end of 2024.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0785 | Negative Crossover | Bearish
  • MA 20 : 1.0802 | Negative Crossover | Bearish
  • MA 50 : 1.0801 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0810 | Negative Crossover | Bearish
  • MA 20 : 1.0825 | Negative Crossover | Bearish
  • MA 50 : 1.0773 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 39.0261 | Sell Zone | Bearish

Stochastic   Oscillator : 19.0500 | 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 : 1.0720 | Take Profit : 1.0675 | Stop Loss : 1.0759

GBP/USD

Pound Sterling falls further against US Dollar on Fed’s hawkish outlook.

The Pound Sterling declines to 1.2740 against the USD as the Fed signals only one rate cut this year.Fed policymakers said they want to see inflation declining for months before considering rate cuts.UK’s steady wage growth has raised concerns of persistent inflation in the services sector.The Pound Sterling (GBP) weakens further to 1.2740 against the US Dollar (USD) in Friday’s trading session as the latter remains firm. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, extends its upside to 105.40. The USD Index rises for a second consecutive day, as the hawkish stance of the Federal Reserve (Fed) on the interest rate outlook has outweighed the impact of the soft United States (US) Consumer Price Index (CPI) and Producer Price Index (PPI) reports for May. The US PPI report, released on Thursday, showed that the monthly headline PPI declined by 0.2% due to weak gasoline prices, and the core producer inflation, which excludes volatile food and energy prices, was flat.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2750 | Negative Crossover | Bearish
  • MA 20 : 1.2726 | Positive Crossover | Bullish
  • MA 50 : 1.2670 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2762 | Negative Crossover | Bearish
  • MA 20 : 1.2745 | Negative Crossover | Bearish
  • MA 50 : 1.2612 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 52.4662 | Buy Zone | Bullish

Stochastic   Oscillator : 45.6757 | Neutral 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 : 1.2737 | Take Profit : 1.2677 | Stop Loss : 1.2784

USD/JPY

Japanese Yen loses ground as BoJ leaves policy rate unchanged.

The Japanese Yen edges lower as BoJ left interest rates unchanged at 0% on Friday.Policymakers intended to finalize a plan for decreasing bond buying at the next meeting.The US Dollar maintains its stability despite weaker-than-expected economic data released on Thursday.The Japanese Yen (JPY) edges lower as the Bank of Japan (BoJ) maintains its interest rate at 0% at Friday’s meeting. The BoJ held rates for the second straight meeting in June after hiking for the first time since 2007 in the March meeting. The central bank chose to reduce bond purchases, aiming to give long-term interest rates greater flexibility. Policymakers intend to finalize a plan for decreasing bond buying over the next 1-2 years at their upcoming policy meeting. The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, edges higher despite the release of weaker-than-expected economic data on Thursday. The US Producer Price Index (PPI) came in softer, and Initial Jobless Claims were higher than anticipated. Nevertheless, the USD’s strength can be attributed to the hawkish stance of the US Federal Reserve (Fed).

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 156.7945 | Positive Crossover | Bullish
  • MA 20 : 156.4850 | Positive Crossover | Bullish
  • MA 50 : 155.1969 | Positive Crossover | Bullish

Simple :

  • MA 10 : 156.4549 | Positive Crossover | Bullish
  • MA 20 : 156.6550 | Positive Crossover | Bullish
  • MA 50 : 155.5069 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 58.7517 | Buy Zone | Bullish

Stochastic   Oscillator : 74.2465 | 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 : 156.80 | Take Profit : 158.30 | Stop Loss : 155.92

AUD/USD

Australian Dollar declines, while US Dollar extends gains due to the hawkish Fed.

The Australian Dollar (AUD) edges lower as the US Dollar remains stronger due to higher US Treasury yields on Friday. However, the AUD/USD pair attempted to recover its daily losses earlier in the day following a Reuters poll of 43 economists. The poll predicts that the Reserve Bank of Australia (RBA) could maintain its current interest rates in June. A significant 90% of economists anticipate stable interest rates in the next quarter, with a potential 25 basis-point reduction to 4.10% projected by the end of 2024. Furthermore, 63% of economists foresee interest rates declining to 4.10% or below by year-end, while a minority (35%) expect no change. The US Dollar (USD) has maintained stability following gains from the previous session despite the release of economic data showing a softer US Producer Price Index (PPI) and higher-than-expected Initial Jobless Claims. Federal Open Market Committee (FOMC) policymakers have revised their outlook, now anticipating only one rate cut for the year, down from the three cuts forecasted in March. This adjustment is bolstering the US Dollar’s (USD) resilience and exerting pressure on the AUD/USD pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6631 | Negative Crossover | Bearish
  • MA 20 : 0.6628 | Negative Crossover | Bearish
  • MA 50 : 0.6603 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6636 | Negative Crossover | Bearish
  • MA 20 : 0.6637 | Negative Crossover | Bearish
  • MA 50 : 0.6582 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 49.1876 | Buy Zone | Neutral

Stochastic   Oscillator : 47.8679 | Neutral Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 0.6632 | Take Profit : 0.6585 | Stop Loss : 0.6664

Elsewhere In The Forex Market

NZD/USD down 0.49% to 0.6138, The USD/CAD up 0.01% to 1.3752. The EUR/GBP down 0.04% at 0.8409. EUR/AUD up 0.01% at 1.6178. AUD/NZD up 0.18% at 1.0779, The USD/CNY up 0.05% at 7.2556, AUD/SEK up 0.01% at 6.9520, at the time of writing.

Key Economic Events & Data Release Today:

(JPY) Industrial Production (MoM) (Apr) Forecast –0.1%, Previous 4.4% at 00:30. (JPY) BoJ Press Conference at 02:30. (EUR) Eurogroup Meetings at 06:00. (CAD) Manufacturing Sales (MoM) (Apr) Forecast 1.3%, Previous –2.1% at 08:30. (USD) Fed Monetary Policy Report at 18:00. (EUR) ECB President Lagarde Speaks at 13:30.