. Daily Forex Analysis - GBP/USD Rises, USD/CHF Steady.

Daily Forex Analysis – GBP/USD Rises, USD/CHF Steady.

Daily Forex Analysis – GBP/USD Rises, USD/CHF Steady.

19 Jun 2024

Introduction

The Euro is on shaky ground as it trades below a key support level. The US Dollar weakens on expectations of a Federal Reserve rate cut, but political uncertainty in Europe weighs on the Euro. Meanwhile, the Pound strengthens after UK inflation cools, and the Swiss Franc and Australian Dollar see modest moves ahead of central bank meetings.

Markets In Focus Today – EUR/USD

EUR/USD Price Seems vulnerable while below 1.0800 confluence support breakpoint.

EUR/USD trades with a mild negative bias, though the downside remains cushioned.September Fed rate cut bets keep the USD bulls on the defensive and lend support.The technical setup favors bearish traders and supports prospects for further losses.The EUR/USD pair ticks lower during the Asian session on Wednesday and moves further away from the weekly high touched the previous day. Spot prices remain on the defensive below mid-1.0700s, though the downside seems cushioned in the wake of subdued US Dollar (USD) price action. Political uncertainty in France – the Eurozone’s second-largest economy – continues to undermine the shared currency and turns out to be a key factor acting as a headwind for the EUR/USD pair. The USD, on the other hand, languishes near the weekly low touched on Tuesday in reaction to weaker US Retail Sales data, which lifted bets for a rate cut by the Federal Reserve (Fed) in September. This, in turn, could act as a tailwind for the currency pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0763 | Negative Crossover | Bearish
  • MA 20 : 1.0785 | Negative Crossover | Bearish
  • MA 50 : 1.0793 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0766 | Negative Crossover | Bearish
  • MA 20 : 1.0808 | Negative Crossover | Bearish
  • MA 50 : 1.0767 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 43.3969 | Neutral Zone | Neutral

Stochastic   Oscillator : 27.3460 | Sell Zone | Positive

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 : 1.0743 | Take Profit : 1.0678 | Stop Loss : 1.0788

GBP/USD

Pound Sterling rises after UK Inflation declines expectedly.

The Pound Sterling moves higher above 1.2700 as the UK inflation cools down further in line with expectations.UK service inflation remains sticky, which could restrict the BoE from committing rate cuts in the near term.Slower-than-expected US Retail Sales growth has limited the US Dollar upside.The Pound Sterling (GBP) edges higher above the round-level resistance of 1.2700 on Wednesday after the United Kingdom (UK) Office for National Statistics (ONS) showed that price pressures declined as expected in May. UK’s annual headline inflation returned to the central bank’s target of 2% for the first time in more than three years from April’s reading of 2.3%. In the same period, the core Consumer Price Index (CPI), which excludes volatile food and energy prices, declined to 3.5% from the former reading of 3.9%. The next trigger for the Pound Sterling will be the BoE’s monetary policy decision, which will be announced on Thursday. The BoE is widely anticipated to keep the interest rate unchanged at 5.25%. Therefore, investors will focus on vote split and fresh cues about when the BoE will start reducing interest rates.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2729 | Negative Crossover | Bearish
  • MA 20 : 1.2720 | Positive Crossover | Bullish
  • MA 50 : 1.2674 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2735 | Negative Crossover | Bearish
  • MA 20 : 1.2743 | Negative Crossover | Bearish
  • MA 50 : 1.2617 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 52.7502 | Buy Zone | Bullish

Stochastic   Oscillator : 26.9608 | Sell Zone | Positive

Resistance   And Support Levels :

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

Overall Sentiment : Neutral Market Direction : Buy

Trade Suggestion : Limit Buy : 1.2706 | Take Profit : 1.2786 | Stop Loss : 1.2660

USD/CHF

USD/CHF remains on the defensive below 0.8850 as weaker US Retail Sales data boosts Fed rate cuts bet.

USD/CHF posts modest gains near 0.8840 in Wednesday’s early European session. The Swiss National Bank (SNB) is expected to keep its interest rate steady at 1.5% in the June meeting on Thursday. The US Retail Sales were weaker than expected, rising 0.1% MoM in May.The USD/CHF pair trades with mild gains near three-month lows around 0.8840 during the early European session on Wednesday. The modest rebound of the pair might be limited as traders raised their bets on the US Federal Reserve (Fed) rate cut this year. US markets will be closed on Wednesday due to Juneteenth National Independence Day. Investors await the Swiss National Bank (SNB) Interest Rate Decision on Thursday, with no change in rate expected. The Swiss central bank is anticipated to keep its interest rate on hold at 1.5% as the nation’s inflation remains elevated for the second consecutive month in May. Ahead of the policy meeting, investors have priced in nearly 60% odds of an SNB rate cut, down from 97% in April. On the other hand, the weaker-than-expected US Retail Sales report on Tuesday has triggered speculation that the Fed will start to cut interest rates in a few months, which drag the Greenback lower against its rivals.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.8908 | Negative Crossover | Bearish
  • MA 20 : 0.8956 | Negative Crossover | Bearish
  • MA 50 : 0.8994 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.8912 | Negative Crossover | Bearish
  • MA 20 : 0.8981 | Negative Crossover | Bearish
  • MA 50 : 0.9053 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 31.1150 | Sell Zone | Bearish

Stochastic   Oscillator : 5.0967 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.9167 R2 : 0.9223
  • S1 : 0.8987 S2 : 0.8931

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 0.8883 | Take Profit : 0.8784 | Stop Loss : 0.8958

AUD/USD

Australian Dollar gathers strength on hawkish RBA, weaker US Retail Sales data.

Australian Dollar (AUD) trades on a stronger note on Wednesday amid the weaker US Dollar. The hawkish messages from the RBA and weaker-than-expected US Retail Sales data support the pair. US markets are closed for Juneteenth; US S&P Global PMI reports will be in the spotlight on Friday. The Australian Dollar (AUD) gains momentum on Wednesday, backed by the hawkish hold by the Reserve Bank of Australia (RBA) at its June meeting. The markets have pushed back RBA rate cut expectations and see the start of the easing cycle in 2025, which continues to boost the Aussie. Furthermore, weaker-than-expected Retail Sales prompted the case for US Federal Reserve (Fed) rate cuts later this year, which undermine the Greenback across the board. The US markets will be closed on Wednesday due to Juneteenth National Independence Day. Investors will focus on the US S&P Global Manufacturing and Services PMI reports at the end of the week. Any signs of expanding US business activity could lift the US Dollar (USD) and cap the upside for the pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6639 | Positive Crossover | Bullish
  • MA 20 : 0.6633 | Positive Crossover | Bullish
  • MA 50 : 0.6608 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6631 | Positive Crossover | Bullish
  • MA 20 : 0.6636 | Positive Crossover | Bullish
  • MA 50 : 0.6586 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 56.3241 | Buy Zone | Bullish

Stochastic   Oscillator : 54.3162 | Buy Zone | Positive

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 : 0.6646 | Take Profit : 0.6704 | Stop Loss : 0.6611

Elsewhere In The Forex Market

USD/JPY down 0.06% to 157.76, The USD/CAD down 0.01% to 1.3716. The EUR/GBP down 0.19% at 0.8434. EUR/AUD down 0.28% at 1.6087. AUD/NZD up 0.32% at 1.0868, The USD/CNY up 0.04% at 7.2564, AUD/SEK down 0.16% at 6.9596, at the time of writing.

Key Economic Events & Data Release Today:

(GBP) CPI (YoY) (May) Forecast 2.0%, Previous 2.3% at 02:00. (CHF) SNB Monetary Policy Statement at 03:30. (NZD) GDP (QoQ) (Q1) Forecast 0.1%, Previous –0.1% at 18:45. (CNY) PBoC Loan Prime Rate Forecast 3.45%, Previous 3.45% at 21:15.