. Daily Forex Analysis – EURUSD, GBPUSD, USDCAD AND AUDUSD In Focus.

Daily Forex Analysis – EURUSD, GBPUSD, USDCAD AND AUDUSD In Focus.

Daily Forex Analysis – EURUSD, GBPUSD, USDCAD AND AUDUSD In Focus.

22 May 2024

Introduction

EUR/USD stabilizes near 1.0850 ahead of the FOMC Minutes release, halting recent losses. Fed’s cautious stance, highlighted by Susan Collins, tempers expectations of imminent rate adjustments, while the ECB’s potential rate-cut extension offers support for the Euro. Meanwhile, Pound Sterling strengthens on higher UK inflation, impacting BoE rate cut speculations. USD/CAD weakens below 1.3650 as Canadian CPI eases, with a focus on BoC’s potential June rate cut. The Australian Dollar fluctuates amid RBNZ’s steady rates and anticipation of FOMC Minutes. Traders await insights into the Fed’s policy stance.

Markets In Focus Today – EUR/USD

EUR/USD remains calm around 1.0850 ahead of FOMC Minutes.

EUR/USD halts its two days of losses ahead of FOMC Minutes on Wednesday. Fed’s Susan Collins stated that progress toward interest rate adjustment will take longer. The likelihood of surrounding the ECB extending the rate-cut cycle is providing support for the Euro.EUR/USD remains stable ahead of the release of the Minutes from the Federal Open Market Committee (FOMC) meeting held on May 1, scheduled for Wednesday. The pair hovers around 1.0850 during the Asian trading session. The Federal Reserve (Fed) maintains a cautious stance regarding inflation and the possibility of rate cuts in 2024. Federal Reserve Bank of Boston President Susan Collins, speaking at the event “Central Banking in the Post-Pandemic Financial System” on Wednesday, emphasized that progress toward interest rate adjustment will take longer and stressed the importance of patience as the right policy for the Fed.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0831 | Positive Crossover | Bullish
  • MA 20 : 1.0800 | Positive Crossover | Bullish
  • MA 50 : 1.0788 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0833 | Positive Crossover | Bullish
  • MA 20 : 1.0781 | Positive Crossover | Bullish
  • MA 50 : 1.0778 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 59.9926 | Buy Zone | Bullish

Stochastic   Oscillator : 0 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.0826 R2 : 1.0893
  • S1 : 1.0609 S2 : 1.0542

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 1.0832 | Take Profit: 1.0900 | Stop Loss: 1.0799

GBP/USD

Pound Sterling strengthens as hotter-than-expected UK inflation pares back BoE rate cut bets.

The Pound Sterling jumps to 1.2750 as UK inflation for April remains hotter than expected.UK annual core inflation rose by 3.9%, likely impacting BoE rate-cut hopes for August. The next move in the US Dollar will be guided by the FOMC minutes. The Pound Sterling (GBP) rallied to 1.2750 in Wednesday’s European session as the United Kingdom (UK) Office for National Statistics (ONS) has reported a slower-than-expected decline in the Consumer Price Index (CPI) data for April. UK inflationary pressures remained hotter than estimates but have softened significantly from March figures, suggesting that higher interest rates by the Bank of England (BoE) are maintaining downward pressure on inflation. A slower decline in UK inflation is expected to negatively impact expectations for BoE rate cuts, which financial markets expect the central bank will begin from the August meeting.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2653 | Positive Crossover | Bullish
  • MA 20 : 1.2607 | Positive Crossover | Bullish
  • MA 50 : 1.2591 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2638 | Positive Crossover | Bullish
  • MA 20 : 1.2580 | Positive Crossover | Bullish
  • MA 50 : 1.2581 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 67.0352 | Buy Zone | Bullish

Stochastic   Oscillator : 53.2 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.2657 R2 : 1.2754
  • S1 : 1.2345 S2 : 1.2248

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 1.2697 | Take Profit: 1.2791 | Stop Loss: 1.2652

USD/CAD

USD/CAD weakens below 1.3650, eyes on FOMC Minutes.

USD/CAD drifts lower to 1.3640 in Wednesday’s early European session. The annual Canadian CPI inflation rate slowed to 2.7% in April from 2.9% prior, boosting the odds of the BoC June rate cut. The Fed remains cautious and will wait for more encouraging data to ensure inflation is on course towards its target. The USD/CAD pair weakens to 1.3640 amid Wednesday’s US Dollar (USD) consolidation during the early European session. The pair edges lower despite the recent softer Canadian CPI inflation data, which boosts the bets of a rate cut from the Bank of Canada (BoC) in June. Investors await the FOMC Minutes and the Federal Reserve’s (Fed) Goolsbee speech later today. Inflation in Canada cooled to 2.7% in April as food price growth slowed, Statistics Canada reported on Tuesday. The Canadian Consumer Price Index (CPI) inflation dropped to 2.7% YoY in April from 2.9% in March, in line with the market estimation. Every month, headline CPI inflation eased to 0.5% MoM in April from 0.6% in the previous reading. Additionally, the BoC’s core CPI rose 1.6% YoY in April, compared to a 2% increase recorded in March.

Technical   Overview With Chart :

USDCAD CHART

Moving Averages :

Exponential :

  • MA 10 : 1.3646 | Positive Crossover | Bullish
  • MA 20 : 1.3657 | Positive Crossover | Bullish
  • MA 50 : 1.3634 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.3641 | Positive Crossover | Bullish
  • MA 20 : 1.3668 | Negative Crossover | Bearish
  • MA 50 : 1.3640 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 50.7214 | Buy Zone | Bullish

Stochastic   Oscillator : 90.75 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.3840 R2 : 1.3927
  • S1 : 1.3559 S2 : 1.3472

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Stop Buy: 1.3674 | Take Profit: 1.3729 | Stop Loss: 1.3642

AUD/USD

Australian Dollar depreciates, while US Dollar remains steady ahead of FOMC Minutes.

The Australian Dollar moves back and forth ahead of FOMC Minutes on Wednesday.The RBNZ maintained its rates at 5.5% for the seventh consecutive meeting as inflation remains above the 1-3% target band.FOMC Minutes are awaited on Wednesday, with traders seeking clues about the Fed policy stance.The Australian Dollar (AUD) experienced a volatile Asian session on Wednesday. The AUD/USD pair gained ground following the appreciation of the New Zealand Dollar (NZD) after the Reserve Bank of New Zealand (RBNZ) announced its decision to maintain its Official Cash Rate (OCR) at 5.5%. Both currencies share a close relationship due to their geographical proximity and strong trade ties between Australia and New Zealand. Investors continue to assess the outlook for the Reserve Bank of Australia (RBA) monetary policy. On Tuesday, the RBA Meeting Minutes they were suggested that the board had considered raising rates in May but ultimately decided to maintain a steady policy. Policymakers noted the difficulty in definitively ruling in or out future changes in the cash rate.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6646 | Positive Crossover | Bullish
  • MA 20 : 0.6613 | Positive Crossover | Bullish
  • MA 50 : 0.6575 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6649 | Positive Crossover | Bullish
  • MA 20 : 0.6604 | Positive Crossover | Bullish
  • MA 50 : 0.6552 | Positive Crossover | Bullish

RSI (Relative Strength Index): 58.9343 | Buy Zone | Bullish

Stochastic   Oscillator : 6.62 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.6602 R2 : 0.6668
  • S1 : 0.6386 S2 : 0.6320

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 0.6646 | Take Profit: 0.6716 | Stop Loss: 0.6606

Elsewhere In The Forex Market

NZD/USD up 0.37% to 0.6114, The USD/JPY up 0.21% to 156.45. The EUR/GBP down 0.21% at 0.8521. EUR/AUD up 0.08% at 1.6294. AUD/NZD is down 0.46% at 1.0891, The USD/CNY is up 0.02% at 7.2392, AUD/SEK is up 0.02% at 7.1314, at the time of writing.

Key Economic Events & Data Release Today:

(NZD) RBNZ Interest Rate Decision Forecast 5.50%, Previous 5.50% at 07:30. (NZD) RBNZ Rate Statement at 07:30. (NZD) RBNZ Press Conference at 08:30. (GBP) CPI (YoY) (Apr) Forecast 2.1%, Previous 3.2% at 11:30. (EUR) ECB President Lagarde Speaks at 18:00. (GBP) Gov Bailey Speaks at 13:35. (USD) Existing Home Sales (Apr) Forecast 4.21M, Previous 4.19M at 19:30. (USD) FOMC Meeting Minutes at 23:30.