. Daily Forex Analysis - GBP/USD Gains, USD/JPY Steady.

Daily Forex Analysis – GBP/USD Gains, USD/JPY Steady.

Daily Forex Analysis – GBP/USD Gains, USD/JPY Steady.

01 Jul 2024

Introduction

The Euro (EUR) surges against the US Dollar (USD) after the first round of French elections and bets on a Federal Reserve rate cut. The USD weakens as inflation cools and expectations shift towards a potential rate decrease. Investors also eye key data releases from Germany and the US.

Markets In Focus Today – EUR/USD

EUR/USD surges on France’s first-round elections outcome and firms Fed rate cut prospects.

EUR/USD rises to near 1.0770 as the first round of France’s legislative elections showed the far-right dominance, but by a small margin.The US Dollar declines as the expected fall in the US core PCE boosts Fed rate cut bets.Investors await the preliminary German HICP and US ISM Manufacturing PMI for June.EUR/USD gains 0.50% and jumps to more than a two-week high near 1.0770 in Monday’s European session. The major currency pair strengthens as exit polls of the first round of France’s parliamentary elections on Sunday showed that Marine Le Pen’s far-right National Rally (RN) is in a comfortable position but with a smaller margin than projected and a significant correction in the US Dollar (USD). On the monetary policy front, investors look for cues about whether the European Central Bank (ECB) will deliver subsequent rate cuts. The ECB started reducing interest rates in early June after maintaining a restrictive interest rate stance for two years to tame price pressures prompted by pandemic-led stimulus.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0727 | Positive Crossover | Bullish
  • MA 20 : 1.0746 | Positive Crossover | Bullish
  • MA 50 : 1.0771 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0718 | Positive Crossover | Bullish
  • MA 20 : 1.0755 | Positive Crossover | Bullish
  • MA 50 : 1.0777 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 50.3415 | Buy Zone | Bullish

Stochastic   Oscillator : 31.4189 | Sell Zone | Negative

Resistance   And Support Levels :

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

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Buy : 1.0785 | Take Profit : 1.0730 | Stop Loss : 1.0830

GBP/USD

GBP/USD gains traction above 1.2650, eyes on US PMI data.

GBP/USD edges higher to 1.2655 in Monday’s early Asian session. The softer US PCE inflation data prompted speculation that the Fed will cut the rate this year.The Opposition Labor Party is expected to win over the UK Prime Minister Rishi Sunak-led Conservative Party.The GBP/USD pair trades on a stronger note around 1.2655 during the early Asian session on Monday. The US Dollar (USD) edges lower as the US Personal Consumption Expenditures (PCE) Price Index for May eased to its lowest annual rate in more than three years, which provides some support to the major pair. Traders await the US June ISM Purchasing Managers Index (PMI) for fresh impetus, which is due on Monday. The US core PCE, the Federal Reserve’s (Fed) preferred inflation measure, continued to cool in May, prompting speculation that the Fed will cut the interest rate this year. The core PCE figure climbed 2.6% from 2.8% in April, matching the forecast. The headline PCE increased 2.6% YoY in May from 2.7% prior, in line with the estimation.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2670 | Positive Crossover | Bullish
  • MA 20 : 1.2684 | Negative Crossover | Bearish
  • MA 50 : 1.2669 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2668 | Positive Crossover | Bullish
  • MA 20 : 1.2708 | Negative Crossover | Bearish
  • MA 50 : 1.2652 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 48.7659 | Neutral Zone | Neutral

Stochastic   Oscillator : 15.8602 | Sell Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment : Neutral  Market Direction : Sell

Trade Suggestion : Limit Buy : 1.2693 | Take Profit : 1.2610 | Stop Loss : 1.2757

USD/JPY

Japanese Yen stays calm due to the possibility of intervention from authorities.

The Japanese Yen holds ground around its 38-year low of 161.28.The JPY may limit its downside as the Tankan Large Manufacturing Index rose to 13 in Q2, hitting the highest level in two years.The US Dollar struggles as recent inflation data raise expectations of Fed rate cuts in 2024.The Japanese Yen (JPY) holds ground on Monday near its lowest level of 161.28 since 1986. The JPY may appreciate as an upbeat Japan’s business confidence data lifts market sentiment. Additionally, the expected speculations about an imminent intervention by Japanese authorities support the JPY and limit the upside of the USD/JPY pair. Japan’s Tankan Large Manufacturing Index rose to 13 in the second quarter from the previous reading of 11. The index hit the highest level in two years amid an improving economic outlook. Meanwhile, Japan’s Jibun Bank Manufacturing PMI for June was revised slightly lower to 50 from a preliminary reading of 50.1 but remained expansionary for the second straight month.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 159.7992 | Positive Crossover | Bullish
  • MA 20 : 158.7383 | Positive Crossover | Bullish
  • MA 50 : 156.7815 | Positive Crossover | Bullish

Simple :

  • MA 10 : 159.6992 | Positive Crossover | Bullish
  • MA 20 : 158.1462 | Positive Crossover | Bullish
  • MA 50 : 156.7931 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 73.4025 | Buy Zone | Bullish

Stochastic   Oscillator : 94.6782 | Buy Zone | Neutral

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 : 159.85 | Take Profit : 161.30 | Stop Loss : 158.91

AUD/USD

Australian Dollar steadies as US Dollar struggles ahead of ISM Manufacturing PMI.

The Australian Dollar lost ground as Manufacturing PMI dropped for the fifth consecutive month to 47.2 in June.The AUD may limit its downside due to the higher-than-expected Manufacturing PMI from trade partner China.US ISM Manufacturing PMI is forecasted to increase to 49.0 in June, from the previous reading of 48.7.The Australian Dollar (AUD) struggles as investors’ sentiment soured following data indicating that Australia’s June manufacturing PMI contracted at its fastest rate since May 2020. Market focus now turns to the Reserve Bank of Australia’s (RBA) upcoming policy meeting minutes on Tuesday for insights into the monetary policy direction. The AUD may limit its downside as the Caixin Manufacturing PMI from China increased to 51.8 in June, defying the expectations of a decline to 51.2 from May’s 51.7. Any change in the Chinese economy could impact the Australian market as both nations are close trade partners.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6655 | Positive Crossover | Bullish
  • MA 20 : 0.6646 | Positive Crossover | Bullish
  • MA 50 : 0.6621 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6656 | Positive Crossover | Bullish
  • MA 20 : 0.6642 | Positive Crossover | Bullish
  • MA 50 : 0.6620 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 58.0660 | Buy Zone | Bullish

Stochastic   Oscillator : 67.7429 | Buy Zone | Neutral

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 : 0.6665 | Take Profit : 0.6758 | Stop Loss : 0.6612

Elsewhere In The Forex Market

NZD/USD up 0.19% to 0.61031, The USD/CAD down 0.04% to 1.36736. The EUR/GBP up 0.05% at 0.8489. EUR/AUD up 0.21% at 1.6135. AUD/NZD down 0.01% at 1.0948, The USD/CNY up 0.02% at 7.2679, AUD/SEK down 0.23% at 7.0535, at the time of writing.

Key Economic Events & Data Release Today:

(EUR) German Manufacturing PMI (Jun) Forecast 43.4, Previous 45.4 at 03:55. (GBP) Manufacturing PMI (Jun) Forecast 51.4, Previous 51.2 at 14:00. (EUR) German CPI (MoM) (Jun) Forecast 0.2%, Previous 0.1% at 08:00. (USD) ISM Manufacturing PMI (Jun) Forecast 49.2, Previous 48.7 at 10:00. (EUR) ECB President Lagarde Speaks at 15:00. (AUD) Retail Sales (MoM) (May) Previous 0.1% at 21:30. (AUD) RBA Meeting Minutes