. Daily FX Analysis - EUR/USD strong, GBP, JPY, AUD mixed.

Daily FX Analysis – EUR/USD strong, GBP, JPY, AUD mixed.

Daily FX Analysis – EUR/USD strong, GBP, JPY, AUD mixed.

26 Apr 2024

Introduction

Amidst anticipation of crucial US data, the EUR/USD pair remains steady above 1.0700 during the early European session on Friday. Despite the US Dollar’s struggle for traction ahead of pivotal PCE Price Index data, recent economic indicators suggest a potential divergence in monetary policy trajectories between the Eurozone and the US. Meanwhile, GBP/USD trades weaker amid expectations of a BoE rate cut, while the Japanese Yen hits multi-decade lows following the BoJ’s unchanged policy stance. Additionally, the Australian Dollar holds firm, buoyed by hawkish RBA sentiment and surging government bond yields.

Markets In Focus Today – EUR/USD

EUR/USD holds above 1.0700 ahead of key US data.

EUR/USD trades in a tight range above 1.0700 in the early European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed’s preferred gauge of inflation, and helps the pair hold its ground. The Dollar’s downswing followed the unexpected miss in the first estimate of the Q1 GDP Growth Rate despite quarterly inflation tracked by the GDP deflator rising above consensus, all kicking back a potential interest rate cut by the Federal Reserve (Fed) for later in the year. Looking ahead, the relatively subdued economic fundamentals in the Eurozone, coupled with the resilience of the US economy, bolster expectations for a stronger Dollar in the medium term, particularly considering the likelihood of the ECB cutting rates before the Fed. In such a scenario, EUR/USD is anticipated to undergo a more significant decline in the short term.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0703 | Positive Crossover | Bullish
  • MA 20 : 1.0726 | Positive Crossover | Bullish
  • MA 50 : 1.0778 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0672 | Positive Crossover | Bullish
  • MA 20 : 1.0728 | Positive Crossover | Bullish
  • MA 50 : 1.0805 | Negative Crossover | Bearish

RSI (Relative Strength Index): 48.7450 | Buy Zone | Bullish

Stochastic   Oscillator : 41.5874 | Neutral 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 Sell: 1.0774 | Take Profit: 1.0692 | Stop Loss: 1.0836

GBP/USD

GBP/USD trades on a softer note below 1.2530 ahead of US PCE data.

GBP/USD snaps the three-day winning streak near 1.2502 in Friday’s early Asian session. The expectation is that the BoE will cut rates before the US Fed might exert some selling pressure on the GBP. The GBP/USD pair traded on a weaker note around 1.2502 during the early Asian trading hours on Friday. The modest rebound of the US Dollar (USD) weighs on the major pair despite weaker US GDP growth numbers. The US Personal Consumption Expenditures (PCE) Price Index data on Friday will be in the spotlight. On Thursday, the US economy grew at a slower pace of 1.6% in the first quarter (Q1) of 2024, compared to 3.4% in the previous reading. This figure came in weaker than the market expectation of 2.5%. However, prices have remained sticky, with the data on Thursday revealing the Personal Consumption Expenditures Price Index in Q1 climbing at a 3.4% annual rate, above the Fed’s 2% target. The Greenback has dropped to two-week lows near mid-105.00 after the release of weaker-than-expected Q1 GDP growth and a hotter-than-expected inflation reading.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2476 | Positive Crossover | Bullish
  • MA 20 : 1.2512 | Positive Crossover | Bullish
  • MA 50 : 1.2580 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2442 | Positive Crossover | Bullish
  • MA 20 : 1.2517 | Positive Crossover | Bullish
  • MA 50 : 1.2623 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 48.4974 | Buy Zone | Bullish

Stochastic   Oscillator : 48.4923 | Neutral Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 1.2542 | Take Profit : 1.2438 | Stop Loss: 1.2623

USD/JPY

Japanese Yen remains heavily offered near multi-decade low after BoJ Governor Ueda’s comments.

The Japanese Yen (JPY) plummeted to a fresh multi-decade low, beyond the 156.00 mark against its American counterpart after the Bank of Japan (BoJ) decided to leave policy settings unchanged on Friday. The selling bias remains unabated heading into the European session, with bulls failing to gain any respite from BoJ Governor Kazuo Ueda’s remarks during the post-meeting press conference. The BoJ’s uncertain rate outlook amid signs that inflation in Japan is cooling, the lack of any decisive action by Japanese authorities to support the domestic currency and a generally positive tone around the equity markets turn out to be key factors undermining the safe-haven JPY. Apart from this, expectations that the interest rate differential between Japan and the United States (US) will remain wide for some time suggest that the path of least resistance for the JPY is to the downside. Meanwhile, the US Dollar (USD) attracts fresh buyers and reverses a part of the previous day’s weaker US GDP print-inspired slide to a two-week low amid bets that the Federal Reserve (Fed) will keep rates higher for longer. This lends additional support to the USD/JPY pair as traders now look to the release of the US Personal Consumption Expenditures (PCE) Price Index for cues about the Fed’s rate-cut path and before positioning for the next leg of a directional move.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 154.7958 | Positive Crossover | Bullish
  • MA 20 : 153.7557 | Positive Crossover | Bullish
  • MA 50 : 151.7756 | Positive Crossover | Bullish

Simple :

  • MA 10 : 154.8920 | Positive Crossover | Bullish
  • MA 20 : 153.4822 | Positive Crossover | Bullish
  • MA 50 : 151.3637 | Positive Crossover | Bullish

RSI (Relative Strength Index): 82.7505 | Buy Zone | Bullish

Stochastic   Oscillator : 93.3256 | 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 Sell: 153.86 | Take Profit: 156.80 | Stop Loss: 151.89

AUD/USD

Australian Dollar holds position amid a stable US Dollar, awaits US PCE.

The Australian Dollar remains firmer due to the hawkish sentiment surrounding RBA’s rate trajectory. The Australian Dollar gains in response to the Aussie 10-year yield hitting a 21-week high of 4.59%.The rebound of the US Dollar could be attributed to a shift in market sentiment toward risk-off. The Australian Dollar (AUD) continues its upward trend for the fifth consecutive session on Friday. The Australian Dollar (AUD) gains momentum against the US Dollar (USD) amid growing support for a hawkish stance from the Reserve Bank of Australia (RBA). This sentiment is strengthened by the reassessment by TD Securities, pushing back the anticipated rate cut by the RBA to February 2025 from November. The Australian Dollar strengthened further on the back of rising yields in Australian government bonds, with the 10-year yield hitting a 21-week high of 4.59%. This surge is attributed to the recent release of Australia’s Consumer Price Index (CPI) data on Wednesday, which surpassed expectations and triggered a hawkish sentiment surrounding the RBA.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6493 | Positive Crossover | Bullish
  • MA 20 : 0.6500 | Positive Crossover | Bullish
  • MA 50 : 0.6525 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6461 | Positive Crossover | Bullish
  • MA 20 : 0.6504 | Positive Crossover | Bullish
  • MA 50 : 0.6532 | Positive Crossover | Bullish

RSI (Relative Strength Index): 55.6707 | Buy Zone | Bullish

Stochastic   Oscillator : 56.4303 | Buy Zone | Positive

Resistance   And Support Levels :

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

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion : Stop Buy : 0.6551 | Take Profit : 0.6627 | Stop Loss : 0.6500

Elsewhere In The Forex Market

NZD/USD up 0.25% to 0.5963, The USD/CHF down 0.14% to 0.9109. The EUR/GBP up 0.04% at 0.8578. USD/CAD down 0.11% at 1.3641. AUD/NZD up 0.21% at 1.0982, The USD/CNY up 0.09% at 7.2450, AUD/SEK up 0.22% at 7.1103, at the time of writing.

Key Economic Events & Data Release Today:

(JPY) BoJ Outlook Report (YoY) at 08:00. (JPY) BoJ Monetary Policy Statement at 08:00. (JPY) BoJ Interest Rate Decision Forecast 0.10%, Previous 0.0% at 08:00. (CAD) Manufacturing Sales (MoM) Previous 0.7% at 18:00. (USD) Core PCE Price Index (MoM) (Mar) Forecast 0.3%, Previous 0.3% at 18:00.