. Daily Forex Analysis - GBP/USD and USD/CHF consolidate.

Daily Forex Analysis – GBP/USD and USD/CHF consolidate.

Daily Forex Analysis – GBP/USD and USD/CHF consolidate.

03 Jul 2024

Introduction

EUR/USD consolidates gains below 1.0750, with limited upside potential amid cooling Eurozone inflation. GBP/USD clings to gains despite Powell’s dovish comments. USD/CHF trades near a one-month high, awaiting FOMC minutes. The Australian Dollar strengthens on solid economic data.

Markets In Focus Today – EUR/USD

EUR/USD Price Consolidates gains below 1.0750, upside potential seems limited.

EUR/USD trades with mild losses near 1.0745 in Wednesday’s early European session.The EUR/USD pair consolidates gains around 1.0745 during the early European session on Wednesday. Data released on Tuesday showed that the annual inflation rate in the Eurozone cooled down in June, in line with the market consensus. This figure has triggered hopes for potential interest rate cuts by the European Central Bank (ECB), which might cap the upside of the Euro (EUR) for the time being. EUR/USD is retreating toward 1.0700 in the early European session on Wednesday. The pair struggles, as the US Dollar finds its feet in the aftermath of the dovish Fed Chair Powell’s comments. Cooling EU inflation keeps the Euro undermined. Eyes turn to US ADP report, Fed Minutes. On the political front, the next risk event for the single currency comes from the upcoming second round of the French snap elections due on July 7.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0733 | Positive Crossover | Bullish
  • MA 20 : 1.0746 | Positive Crossover | Bullish
  • MA 50 : 1.0769 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0718 | Positive Crossover | Bullish
  • MA 20 : 1.0742 | Positive Crossover | Bullish
  • MA 50 : 1.0779 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 51.2362 | Buy Zone | Bullish

Stochastic   Oscillator : 59.0664 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.0860 R2 : 1.0919
  • S1 : 1.0669 S2 : 1.0610

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 1.0772 | Take Profit : 1.0722 | Stop Loss : 1.0809

GBP/USD

Pound Sterling clings to gains ahead of US data, UK elections outcome.

The Pound Sterling holds gains against the US Dollar as Fed’s Powell seems confident that disinflation has resumed.UK elections outcome will be the major trigger for the Pound Sterling.The US Dollar will dance to the tunes of US ISM Servies PMI, the ADP Employment Change for June, and the FOMC minutes.The Pound Sterling (GBP) consolidates below the round-level resistance of 1.2700 in Wednesday’s London session after a sharp recovery from the three-day low of 1.2615 on Tuesday. The GBP/USD pair exhibits strength as the near-term outlook of the US Dollar (USD) has become uncertain after the speech from Federal Reserve (Fed) Chair Jerome Powell at the European Central Bank (ECB) Forum on Central banking on Tuesday prompted optimism on rate cuts. Powell said recent data suggests that the disinflation process has resumed, though we need more good inflation data before reducing interest rates. Powell added that risks to inflation are more balanced. He also said that an unexpected weakness in the labor market could force them to react on interest rates.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2674 | Positive Crossover | Bullish
  • MA 20 : 1.2683 | Positive Crossover | Bullish
  • MA 50 : 1.2669 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2661 | Positive Crossover | Bullish
  • MA 20 : 1.2697 | Positive Crossover | Bullish
  • MA 50 : 1.2661 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 52.1873 | Buy Zone | Bullish

Stochastic   Oscillator : 100 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.2800 R2 : 1.2859
  • S1 : 1.2611 S2 : 1.2552

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Stop Buy : 1.2701 | Take Profit : 1.2788 | Stop Loss : 1.2650

USD/CHF

USD/CHF holds steady around 0.9040 area, just below over one-month top set on Tuesday.

USD/CHF stands tall near its highest level in over a month, albeit lacks bullish conviction.The SNB’s position as a front-runner in the global policy easing cycle undermines the CHF.Traders await the release of US economic data and FOMC minutes later this Wednesday.The USD/CHF pair trades with a mild positive bias for the seventh successive day on Wednesday and is currently placed just below its highest level in over a month touched the previous day. Spot prices, however, remain below mid-0.9000s as investors await more cues about the Federal Reserve’s (Fed) rate-cut path before placing fresh directional bets. Hence, the market focus will remain glued to the release of the FOMC meeting minutes, due later during the US session. Apart from this, traders will take cues from the US economic docket – featuring the ADP report on private-sector employment and the ISM Services PMI. The attention will then shift to the closely-watched US monthly jobs data, popularly known as the Nonfarm Payrolls (NFP) report on Friday. This will play a key role in influencing the near-term US Dollar (USD) price dynamics and help in determining the next leg of a directional move for the USD/CHF pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.8985 | Positive Crossover | Bullish
  • MA 20 : 0.8975 | Positive Crossover | Bullish
  • MA 50 : 0.8989 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.8974 | Positive Crossover | Bullish
  • MA 20 : 0.8943 | Positive Crossover | Bullish
  • MA 50 : 0.9024 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 59.1063 | Buy Zone | Bullish

Stochastic   Oscillator : 92.5618 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.9028 R2 : 0.9078
  • S1 : 0.8869 S2 : 0.8820

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 0.9004 | Take Profit : 0.9103 | Stop Loss : 0.8947

AUD/USD

Australian Dollar remains stronger despite the improved US Dollar, FOMC Minutes awaited.

The Australian Dollar gains ground due to the release of solid economic data on Wednesday.Australia’s Retail Sales rose by 0.6% MoM in May, surpassing both the anticipated 0.2% rise and the prior 0.1% gain.Fed Chair Jerome Powell wants to see further evidence before cutting interest rates.The Australian Dollar (AUD) appreciates for the second successive day on Wednesday. This upside is attributed to the Judo Bank’s Australia Purchasing Managers Index (PMI) figures, which showed a slight improvement in June.The AUD/USD pair may limit its upside as the US Dollar (USD) halts its four-day losing streak due to a recovery in yield on a 2-year Treasury bond, which stands at 4.75% at the time of writing. Traders will be looking for further direction from the US ADP Employment Change, ISM Services PMI for June, and the FOMC Minutes, all of which are scheduled for release later on Wednesday.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6658 | Positive Crossover | Bullish
  • MA 20 : 0.6649 | Positive Crossover | Bullish
  • MA 50 : 0.6624 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6656 | Positive Crossover | Bullish
  • MA 20 : 0.6643 | Positive Crossover | Bullish
  • MA 50 : 0.6626 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 57.3671 | Buy Zone | Bullish

Stochastic   Oscillator : 75.6710 | Buy Zone | Positive

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 : 0.6691 | Take Profit : 0.6787 | Stop Loss : 0.6638

Elsewhere In The Forex Market

NZD/USD down 0.03% to 0.6076, The USD/JPY up 0.24% to 161.85. The EUR/GBP up 0.03% at 0.8473. EUR/AUD down 0.00% at 1.6115. AUD/NZD up 0.15% at 1.0985, The USD/CNY up 0.02% at 7.2679, AUD/SEK down 0.01% at 7.0528, at the time of writing.

Key Economic Events & Data Release Today:

(GBP) Service PMI (Jun) Forecast 51.2, Previous 53.0 at 04:00. (USD) ADP Nonfarm Employment Change (Jun) Forecast 163K, Previous 152K at 08:15. (USD) Initial Jobless Claims Forecast 234K, Previous 233K at 08:30. (USD) ISM Non-Manufacturing PMI (Jun) Forecast 52.6, Previous 53.8 at10:00. (EUR) ECB President Lagarde Speaks at 10:15. (USD) FOMC Meeting Minutes at 14:00.