. Daily FX Analysis - Dive into forex chaos, brace impact.

Daily FX Analysis – Dive into forex chaos, brace impact.

Daily FX Analysis – Dive into forex chaos, brace impact.

12 Apr 2024

Introduction

EUR/USD is trading with a downward bias below 1.0750, keeping an eye on German inflation data. The pair hovers near 1.0728 on Friday, facing pressure from a recovering US Dollar amidst speculation of a Fed rate cut in September. Meanwhile, GBP/USD struggles below 1.2570 ahead of UK GDP data, while AUD/USD slides to 0.6525 amid anticipation of Chinese trade data. The Japanese Yen remains near multi-decade lows against the USD, impacted by the Bank of Japan’s dovish stance and USD strength.

Markets In Focus Today – EUR/USD

EUR/USD trades with a negative bias below 1.0750, eyes on German inflation data.

The EUR/USD trades with a negative bias near 1.0728 on Friday during the early Friday. The modest recovery in the US Dollar amid the rising speculation of a Fed rate cut in September weighs on the major pair. EUR/USD remained on the back foot for the third straight session, easing to levels just below 1.0700 the figure and disputing the 2024 lows, always amidst the extra advance in the US Dollar (USD). In fact, the Dollar’s upward momentum came in tandem with investors’ repricing of a later-than-expected rate cut (probably in December), all amidst another uptick in yields in the belly of the curve.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0784 | Negative Crossover | Bearish
  • MA 20 : 1.0808 | Negative Crossover | Bearish
  • MA 50 : 1.0830 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0792 | Negative Crossover | Bearish
  • MA 20 : 1.0816 | Negative Crossover | Bearish
  • MA 50 : 1.0823 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 35.3624 | Sell Zone | Bearish

Stochastic   Oscillator : 10.5589 | Sell Zone | Neutral

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 Buy : 1.0731 | Take Profit : 1.0699 | Stop Loss : 1.0755

GBP/USD

GBP/USD remains on backfoot below 1.2570, UK GDP data looms.

The GBP/USD pair remains on the backfoot near 1.2550 during the early Asian session on Friday. The market expects that the Bank of England (BoE) will cut its interest rate sooner than the US Federal Reserve (Fed) weighs on the Pound Sterling (GBP) and the major pair. Later on Friday, investors will monitor the UK monthly Gross Domestic Product (GDP) for February and the preliminary US Michigan Consumer Sentiment Index for April. The hotter-than-expected CPI inflation reading this week triggers speculation that the Fed will have to push back the number and timing of interest rate cuts this year. Fed officials believe the US central bank had reached the peak of the current rate-tightening cycle and monetary policy was well positioned to react to the economic outlook, including the possibility of keeping rates higher for longer if inflation declines gradually. The hawkish remarks from the Fed lift the Greenback and drag the GBP/USD pair lower.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2599 | Negative Crossover | Bearish
  • MA 20 : 1.2627 | Negative Crossover | Bearish
  • MA 50 : 1.2649 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2602 | Negative Crossover | Bearish
  • MA 20 : 1.2633 | Negative Crossover | Bearish
  • MA 50 : 1.2656 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 39.1543 | Sell Zone | Bearish

Stochastic   Oscillator : 15.2798 | 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 Buy : 1.2597 | Take Profit : 1.2500 | Stop Loss : 1.2664

AUD/USD

AUD/USD slides to 0.6525 area, fresh daily low as traders await Chinese trade data.

AUD/USD comes under some renewed selling pressure and erodes a part of the overnight gains. Reduced Fed rate cut bets, along with geopolitics, underpin the USD and drag spot prices lower. Chinese trade data, the US consumer sentiment index and Fedspeak eyed for a fresh impetus. The AUD/USD pair meets with a fresh supply during the Asian session on Friday and erodes a part of the previous day’s goodish intraday move up from the 0.6500 psychological mark. Spot prices currently trade around the 0.6530-0.6525 area, though the downside seems cushioned amid mixed fundamental cues. The South China Morning Post reported that Chinese Premier Li Qiang will visit Australia in June. This is seen as a sign of improving relations between Australia and China, which, in turn, is seen acting as a tailwind for the Aussie. Any meaningful appreciating move for the AUD/USD pair, however, seems elusive in the wake of the underlying bullish sentiment surrounding the US Dollar (USD), bolstered by hawkish Federal Reserve (Fed) expectations.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6551 | Negative Crossover | Bearish
  • MA 20 : 0.6551 | Negative Crossover | Bearish
  • MA 50 : 0.6557 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6554 | Negative Crossover | Bearish
  • MA 20 : 0.6546 | Negative Crossover | Bearish
  • MA 50 : 0.6542 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 46.8897 | Neutral Zone | Neutral

Stochastic   Oscillator : 27.6284 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.6628 R2 : 0.6673
  • S1 : 0.6483 S2 : 0.6438

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Buy : 0.6552 | Take Profit : 0.6482 | Stop Loss : 0.6598

USD/JPY

Japanese Yen hangs near multi-decade low against USD, bears not ready to give up yet.

The Japanese Yen (JPY) struggle to capitalize on its modest Asian session uptick on Friday and languishes near a multi-decade low against its American counterpart. The Bank of Japan’s (BoJ) dovish outlook, saying that monetary policy will remain easy for some time, suggests that the gap between US and Japanese interest rates will stay wide. This, along with a stable performance around the equity markets, continues to undermine the safe-haven JPY. The US Dollar (USD), on the other hand, stands tall near the YTD peak and remains well supported by expectations that the Federal Reserve (Fed) may delay cutting interest rates. This, in turn, is seen as another factor acting as a tailwind for the USD/JPY pair. That said, the possibility of an intervention by Japanese authorities to support the domestic currency might hold back the JPY bears from placing fresh bets and cap the upside for the currency pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 152.2163 | Positive Crossover | Bullish
  • MA 20 : 151.5359 | Positive Crossover | Bullish
  • MA 50 : 150.2112 | Positive Crossover | Bullish

Simple :

  • MA 10 : 152.0663 | Positive Crossover | Bullish
  • MA 20 : 151.5807 | Positive Crossover | Bullish
  • MA 50 : 150.2659 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 72.5999 | Buy Zone | Bullish

Stochastic   Oscillator : 93.0580 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 152.0153 R2 : 153.3100
  • S1 : 147.8240 S2 : 146.5293

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 152.72 | Take Profit : 153.31 | Stop Loss : 152.39

Elsewhere In The Forex Market

NZD/USD down 0.02% to 0.5995, The USD/CAD up 0.12% to 1.3705. The EUR/GBP down 0.03% at 0.8541. AUD/USD down 0.14% at 0.6528. AUD/NZD down 0.12% at 1.0889, The USD/CNY down 0.01% at 7.2361, AUD/SEK down 0.07% at 7.0069, at the time of writing.

Key Economic Events & Data Release Today:

(GBP) German CPI (MoM) (Mar) Forecast –0.4%, Previous 0.4% at 11:30. (GBP) Manufacturing Production (MoM) (Feb) Forecast 0.1%, Previous 0.0% at 11:30. (GBP) GDP (YoY) (Feb) Forecast –0.4%, Previous –0.3% at 11:30. (GBP) GDP (MOM) (Feb) Forecast 0.1%, Previous 0.2% at 11:30. (EUR) ECB Forecast at 13:30.