. Daily FX Analysis - Currency pairs struggle amid dollar dominance.

Daily FX Analysis – Currency pairs struggle amid dollar dominance.

Daily FX Analysis – Currency pairs struggle amid dollar dominance.

02 Apr 2024

Introduction

EUR/USD retreats towards 1.0700 ahead of the release of German inflation data, as Tuesday’s European session unfolds. The pair continues its downward trajectory fueled by a resurgent US Dollar following robust US ISM PMI figures. Meanwhile, GBP/USD struggles below 1.2550 amidst a stronger Greenback and optimistic US PMI data. USD/CAD maintains a positive bias amid a stronger USD and bullish oil prices, while NZD/USD grapples near its year-to-date low, facing sustained USD buying pressure and a risk-off sentiment. Traders await US economic indicators and speeches from Fed officials for further direction.

Markets In Focus Today – EUR/USD

EUR/USD falls toward 1.0700 ahead of German inflation data.

EUR/USD extended losses toward 1.0700 in Tuesday’s European trading. Renewed US Dollar upsurge, in the wake of strong US ISM PMI data, weighs on the pair amid investors’ nervousness ahead of the key German inflation data. The EUR/USD pair fell on Monday to 1.0730, its lowest since mid-February. The US Dollar surged after Wall Street’s opening, as stocks dipped while solid United States (US) data reflected the strength of the local economy. Last Friday, Federal Reserve (Fed) Chairman Jerome Powell repeated that the central bank is in no rush to trim interest rates as inflation remains high while the economy is resilient. The EUR/USD pair extends its downside to 1.0730, the weekly low during the early European session on Tuesday. The upbeat US ISM Manufacturing PMI for March lifts the US Dollar (USD) and drags the EUR/USD pair lower. Investors will take more cues from Fedspeak later on Tuesday, including Michelle Bowman, Loretta Mester, John Williams, and Mary Daly.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0800 | Negative Crossover | Bearish
  • MA 20 : 1.0827 | Negative Crossover | Bearish
  • MA 50 : 1.0842 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0813 | Negative Crossover | Bearish
  • MA 20 : 1.0861 | Negative Crossover | Bearish
  • MA 50 : 1.0829 | Negative Crossover | Bearish

RSI (Relative Strength Index): 33.6328 | Sell Zone | Bearish

Stochastic   Oscillator : 5.8102 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.0928 R2 : 1.0978
  • S1 : 1.0765 S2 : 1.0715

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 1.0761 | Take Profit: 1.0693 | Stop Loss: 1.0810

GBP/USD

GBP/USD remains on the defensive below 1.2550 amid a firmer US Dollar and upbeat US PMI data.

GBP/USD struggles to gain ground near 1.2545 on the stronger US Dollar. The US ISM manufacturing data unexpectedly expanded for the first time in nearly 18 months. The dovish stance of the Bank of England (BoE) drags the GBP lower against the USD. The GBP/USD pair remains on the defensive around 1.2545 during the early Asian session on Tuesday. The US Dollar Index (DXY) rises above the 105.00 mark, and the US Treasury bond yields edge higher sharply overnight following the upbeat US ISM data, which creates a headwind for the GBP/USD pair. The dovish stance of the Bank of England (BoE) in its latest monetary policy statement has exerted some selling pressure on the Pound Sterling (GBP). The BoE Governor Andrew Bailey said that market expectations for two or three rate cuts this year are “reasonable,” while adding that the UK central bank is not seeing a lot of sticky persistence. These comments trigger expectations for the BoE to cut interest rates in June and drag the GBP lower against the Greenback.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2621 | Negative Crossover | Bearish
  • MA 20 : 1.2655 | Negative Crossover | Bearish
  • MA 50 : 1.2664 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2628 | Negative Crossover | Bearish
  • MA 20 : 1.2701 | Negative Crossover | Bearish
  • MA 50 : 1.2669 | Negative Crossover | Bearish

RSI (Relative Strength Index): 35.3268 | Sell Zone | Bearish

Stochastic   Oscillator : 8.3451 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.2819 R2 : 1.2894
  • S1 : 1.2576 S2 : 1.2501

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 1.2592 | Take Profit: 1.2513 | Stop Loss: 1.2654

USD/CAD

USD/CAD trades with positive bias amid stronger USD, bullish Oil prices to cap gains.

USD/CAD gains positive traction for the second straight day, albeit lacks follow-through. Reduced bets for a June Fed rate cut to lift the USD to a multi-week top and lend support. Bullish Crude Oil prices seem to underpin the Loonie and act as a headwind for the pair. The USD/CAD pair attracts some buyers for the second straight day on Tuesday and looks to build on the overnight bounce from the 1.3515 region, or over a one-week low. Spot prices currently trade around the 1.3580 area and remain supported by some follow-through US Dollar (USD) buying, though bullish Crude Oil prices might cap any further gains. Market participants now look forward to the US economic docket – featuring the release of JOLTS Job Openings and Factory Orders later during the early North American session.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.3556 | Positive Crossover | Bullish
  • MA 20 : 1.3543 | Positive Crossover | Bullish
  • MA 50 : 1.3517 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.3558 | Positive Crossover | Bullish
  • MA 20 : 1.3531 | Positive Crossover | Bullish
  • MA 50 : 1.3508 | Positive Crossover | Bullish

RSI (Relative Strength Index): 55.4117 | Buy Zone | Bullish

Stochastic   Oscillator : 65.6757 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.3598 R2 : 1.3644
  • S1 : 1.3450 S2 : 1.3404

Overall Sentiment: Bullish Market Direction : Buy

Trade Suggestion : Stop Buy: 1.3583 | Take Profit: 1.3611 | Stop Loss: 1.3568

NZD/USD

NZD/USD struggles near YTD low, not out of the wood yet amid sustained USD buying.

NZD/USD remains on the defensive near its lowest level since November amid a bullish USD.Reduced bets for a June Fed rate cut and the risk-off mood lifts the USD to a multi-week top.Traders now look to the US macro data and speeches by Fed officials for short-term impetus.The NZD/USD pair oscillates in a narrow trading band during the Asian session on Tuesday and consolidates its recent losses to the lowest level since November 14 touched the previous day. Spot prices hold steady around mid-0.5900s and seem vulnerable to prolonging a multi-week-old descending trend. Market participants now look to the US economic docket – featuring the release of JOLTS Job Openings and Factory Orders – for some impetus later during the early North American session. This, along with speeches by influential FOMC members, the US bond yields, and the broader risk sentiment, might influence the USD price dynamics and produce short-term opportunities around the NZD/USD pair. Nevertheless, the aforementioned fundamental backdrop favors bearish traders and suggests that the path of least resistance for spot prices is to the downside.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.5997 | Negative Crossover | Bearish
  • MA 20 : 0.6037 | Negative Crossover | Bearish
  • MA 50 : 0.6084 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.5996 | Negative Crossover | Bearish
  • MA 20 : 0.6063 | Negative Crossover | Bearish
  • MA 50 : 0.6096 | Negative Crossover | Bearish

RSI (Relative Strength Index): 28.9050 | Sell Zone | Bearish

Stochastic   Oscillator : 6.1445 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.6149 R2 : 0.6211
  • S1 : 0.5951 S2 : 0.5890

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 0.5969 | Take Profit: 0.5915 | Stop Loss: 0.6020

Elsewhere In The Forex Market

AUD/USD up 0.02% to 0.6490, The USD/CHF up 0.39% to 0.9078. The EUR/GBP down 0.14% at 0.8546. USD/JPY up 0.04% at 151.69. AUD/NZD up 0.1% at 1.0913, The USD/CNY up 0.06% at 7.2344, AUD/SEK up 0.01% at 7.0093, at the time of writing.

Key Economic Events & Data Release Today:

(EUR) German Manufacturing PMI (Mar) Forecast 41.6, Previous 42.5 at 13:25. (GBP) Manufacturing PMI (Mar) Forecast –49.9, Previous –47.5 at 14:00. (GBP) German CPI (MoM) (Mar) Forecast 0.5, Previous 0.4% at 17:30. (USD) JOLTs Job Openings (Feb) Forecast 8.760M, Previous 8.863M at 19:30.