. Daily Forex Analysis - USD/CAD Shift Amid Market Sentiment, Inflation Data.

Daily Forex Analysis – USD/CAD Shift Amid Market Sentiment, Inflation Data.

Daily Forex Analysis – USD/CAD Shift Amid Market Sentiment, Inflation Data.

25 Jun 2024

Introduction

EUR/USD gains ground above 1.0700 amid a cheerful market mood, reaching 1.0740 despite Germany’s bleak outlook. Investors await US core PCE inflation data, while the ECB considers rate cuts. The US Dollar Index drops as risk appetite improves, and GBP/USD recovers to 1.2700 with extended US Dollar weakness. NZD/USD remains cautious around 0.6100 ahead of key inflation data, while USD/CAD depreciates to 1.3650 ahead of Canada’s CPI release.

Markets In Focus Today – EUR/USD

EUR/USD gains firm footing above 1.0700 amid cheerful market mood.

EUR/USD rises to 1.0740 even though Germany’s outlook appears to be dull.The ECB could deliver subsequent rate cuts to uplift poor demand prospects.The US Dollar will dance to the tunes of the US core PCE inflation data for May.EUR/USD extends its recovery to 1.0740 in Tuesday’s European session. The major currency pair raises as growing optimism for the Federal Reserve (Fed) to reduce interest rates twice this year has increased investors’ risk appetite. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, has dropped to 105.40 as demand for safe-haven assets has eased. The DXY Index corrects even though the preliminary United States (US) S&P Global Purchasing Managers Index (PMI) unexpectedly beats the consensus and its prior numbers in June.This week, investors will focus on the US core Personal Consumption Expenditure price index (PCE) for May, which will be published on Friday. The core PCE price index data is the Fed’s preferred inflation measure, and it will provide fresh cues on when and how much the central bank will reduce interest rates this year.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0739 | Negative Crossover | Bearish
  • MA 20 : 1.0763 | Negative Crossover | Bearish
  • MA 50 : 1.0782 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0733 | Positive Crossover | Bullish
  • MA 20 : 1.0783 | Negative Crossover | Bearish
  • MA 50 : 1.0773 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 44.9841 | Neutral Zone | Neutral

Stochastic   Oscillator : 21.6277 | Sell Zone | Neutral

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 : 1.0744 | Take Profit : 1.0690 | Stop Loss : 1.0785

GBP/USD

GBP/USD recovers to 1.2700 as US Dollar weakness extends.

GBP/USD is recovering to test 1.2700 in the European morning on Tuesday. Extended US Dollar weakness due to improved market mood, aids the pair’s latest uptick. Traders look to the US sentiment data and Fed speeches for further impetus, as the UK calendar remains data-quiet. GBP/USD extends gains to test 14-day EMA at 1.2704 level.A broadening bottom pattern on a daily chart suggests a potential correction before moving lower.The lower boundary of the broadening bottom pattern around the level of 1.2640 could act as a key support. GBP/USD extends gains for the second successive session, trading around 1.2700 during Asian hours on Tuesday. Analysis of the daily chart shows a broadening bottom pattern in price action, representing increasing volatility. This chart pattern suggests a potential correction before moving lower.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2699 | Positive Crossover | Bullish
  • MA 20 : 1.2704 | Negative Crossover | Bearish
  • MA 50 : 1.2673 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2706 | Negative Crossover | Bearish
  • MA 20 : 1.2729 | Negative Crossover | Bearish
  • MA 50 : 1.2633 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 50.4538 | Buy Zone | Bullish

Stochastic   Oscillator : 23.0126 | Sell Zone | Positive

Resistance   And Support Levels :

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

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.2693 | Take Profit : 1.2774 | Stop Loss : 1.2652

NZD/USD

NZD/USD remains timid around 0.6100 due to investors’ caution.

NZD/USD stays calm as traders adopt caution ahead of key inflation data from both nations.The Kiwi Dollar may appreciate as close trade partner China expressed confidence in achieving its annual growth target of 5%.CME FedWatch Tool suggests 67.7% odds of a Fed rate cut in September, rising from 61.5% a week earlier.NZD/USD hovers around 0.6120 during the European session on Tuesday. The pair barely moves due to the investors’ caution ahead of ANZ – Roy Morgan Consumer Confidence for June due and US Gross Domestic Product (GDP) for the first quarter (Q1) are set to be released on Thursday. The US Personal Consumption Expenditure (PCE) Price Index will be eyed on Friday. The Reserve Bank of New Zealand (RBNZ) forecasted during its last policy meeting in May that the central bank wouldn’t start cutting its Official Cash Rate from 5.5% until the third quarter of next year as inflation remains elevated.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6132 | Negative Crossover | Bearish
  • MA 20 : 0.6129 | Negative Crossover | Bearish
  • MA 50 : 0.6098 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6138 | Negative Crossover | Bearish
  • MA 20 : 0.6144 | Negative Crossover | Bearish
  • MA 50 : 0.6066 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 51.1247 | Buy Zone | Bullish

Stochastic   Oscillator : 19.8234 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.6175 R2 : 0.6245
  • S1 : 0.5949 S2 : 0.5880

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 0.6140 | Take Profit : 0.6197 | Stop Loss : 0.6105

USD/CAD

USD/CAD depreciates to near 1.3650 ahead of Canada’s CPI.

USD/CAD extends its losing streak ahead of Canada’s inflation data release on Tuesday.Lower WTI price may limit the upside of the commodity-linked Canadian Dollar.Fed’s Austan Goolsbee said that the Fed might need to consider the impact of restrictive policy on the US economy.USD/CAD continues its losing streak that began on June 14, trading around 1.3650 during the European session on Tuesday. Statistics Canada is set to release the top-tier Consumer Price Index (CPI) data for May later in the North American session.The downward correction in the crude Oil prices put pressure on the commodity-linked Canadian Dollar (CAD) as Canada is the largest crude Oil exporter to the United States (US). West Texas Intermediate (WTI), the US crude Oil benchmark, trades around $81.40, at the time of writing. However, Crude prices may limit its downside on the hope for a strong summer driving demand and Oil supply concerns amid the ongoing geopolitical tensions in the Middle East.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.3689 | Negative Crossover | Bearish
  • MA 20 : 1.3692 | Negative Crossover | Bearish
  • MA 50 : 1.3672 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.3701 | Negative Crossover | Bearish
  • MA 20 : 1.3698 | Negative Crossover | Bearish
  • MA 50 : 1.3688 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 43.4121 | Neutral Zone | Neutral

Stochastic   Oscillator : 17.9671 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.3740 R2 : 1.3786
  • S1 : 1.3593 S2 : 1.3547

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 1.3678 | Take Profit : 1.3615 | Stop Loss : 1.3723

Elsewhere In The Forex Market

USD/JPY down 0.08% to 159.50, The AUD/USD up 0.09% to 0.6662. The EUR/GBP down 0.11% at 0.8451. EUR/AUD down 0.05% at 1.6110. AUD/NZD up 0.06% at 1.0875, The USD/CNY up 0.00% at 7.2612, AUD/SEK up 0.01% at 6.9735, at the time of writing.

Key Economic Events & Data Release Today:

(CAD) Core CPI (MoM) (May) Forecast 0.2%, Previous 0.2% at 08:30. (USD) CB Consumer Confidence (Jun) Forecast 100.0, Previous 102.0 at 10:00.