. Daily FX Analysis - Euro, Pound surge, USD slips, Aussie holds.

Daily FX Analysis – Euro, Pound surge, USD slips, Aussie holds.

Daily FX Analysis – Euro, Pound surge, USD slips, Aussie holds.

22 Feb 2024

Introduction

EUR/USD continues its ascent above 1.0850 in the European session, propelled by a subdued US Dollar and Treasury yields. The focus turns to Eurozone and US PMI data. Meanwhile, GBP/USD climbs towards 1.2700, driven by a weaker USD and improved risk appetite. In the USD/CAD pair, caution over Fed rate cuts leads to depreciation. The Australian Dollar maintains its winning streak, supported by positive Services PMI data while awaiting key US economic indicators.

Markets In Focus Today – EUR/USD

EUR/USD stretches higher above 1.0850 ahead of Eurozone PMI data.

EUR/USD is continuing its upswing above 1.0850 in European trading on Thursday. A broadly subdued US Dollar and US Treasury bond yields, amid a risk-on mood, are helping the pair ahead of the top-tier preliminary PMI data from the Eurozone and the US. EUR/USD extended its recent uptrend after closing in positive territory on Wednesday and touched its highest level since early February above 1.0850 on Thursday. The pair’s technical outlook points to a buildup of bullish momentum ahead of PMI data releases. The broad-based selling pressure surrounding the US Dollar (USD) fueled the pair’s rally in the second half of the week. Although the USD remained resilient against its rivals after the FOMC Minutes, improving the risk mood made it difficult for the currency to find demand during the Asian trading hours.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0798 | Positive Crossover | Bullish
  • MA 20 : 1.0806 | Positive Crossover | Bullish
  • MA 50 : 1.0835 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0779 | Positive Crossover | Bullish
  • MA 20 : 1.0792 | Positive Crossover | Bullish
  • MA 50 : 1.0887 | Negative Crossover | Bearish

RSI (Relative Strength Index): 56.0596 | Buy Zone | Bullish

Stochastic   Oscillator : 71.7910 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.0982 R2 : 1.1041
  • S1 : 1.0790 S2 : 1.0731

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 1.0847 | Take Profit: 1.0913 | Stop Loss: 1.0809

GBP/USD

GBP/USD jumps toward 1.2700, awaits UK, and US PMIs.

GBP/USD is extending gains toward 1.2700 in the European session on Thursday. The pair is finding support from a weaker US Dollar and an improved risk appetite. All eyes now remain on the UK and the US flash PMI data for fresh trading impetus. GBP/USD gathered bullish momentum and climbed above 1.2650 for the first time in a week on Tuesday. The pair lost its traction later in the day but didn’t have a difficult time stabilizing above 1.2600. The near-term technical outlook doesn’t yet point to a buildup of bullish momentum and buyers are likely to remain hesitant unless the pair clears 1.2650-1.2660 resistance. While testifying before the UK Treasury Select Committee on Tuesday, Bank of England (BoE) Governor Andrew Bailey repeated that they are looking for more sustained progress on the reduction of more persistent elements of inflation.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2630 | Positive Crossover | Bullish
  • MA 20 : 1.2636 | Positive Crossover | Bullish
  • MA 50 : 1.2632 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2615 | Positive Crossover | Bullish
  • MA 20 : 1.2634 | Positive Crossover | Bullish
  • MA 50 : 1.2675 | Positive Crossover | Bullish

RSI (Relative Strength Index): 57.0960 | Buy Zone | Bullish

Stochastic   Oscillator : 62.0782 | Neutral Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.2762 R2 : 1.2806
  • S1 : 1.2617 S2 : 1.2573

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 1.2666 | Take Profit: 1.2749 | Stop Loss: 1.2624

USD/CAD

USD/CAD edges lower to near 1.3490 as cautious tone regarding the Fed’s rate cuts.

USD/CAD depreciates after the FOMC Minutes expressed concerns over rate cuts. Fed’s easing cycle appears to be delayed, correlating with recent higher CPI and PPI. The decline in Crude oil prices could weigh on the Canadian Dollar.USD/CAD expanded its losses to near 1.3490 during the Asian session on Thursday as the US Dollar (USD) showed weakness, which could be attributed to the subdued US Treasury yields. However, US Treasury yields gained ground on Wednesday following the cautious tone expressed in the Federal Open Market Committee (FOMC) Minutes regarding the interest rate reductions.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.3484 | Negative Crossover | Bearish
  • MA 20 : 1.3473 | Negative Crossover | Bearish
  • MA 50 : 1.3467 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.3491 | Negative Crossover | Bearish
  • MA 20 : 1.3469 | Negative Crossover | Bearish
  • MA 50 : 1.3406 | Positive Crossover | Bullish

RSI (Relative Strength Index): 47.4291 | Buy Zone | Bullish

Stochastic   Oscillator : 50.0790 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.3520 R2 : 1.3594
  • S1 : 1.3281 S2 : 1.3207

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 1.3464 | Take Profit: 1.3374 | Stop Loss: 1.3522

AUD/USD

Australian Dollar hovers above a major level amid a subdued US Dollar, with a focus on US PMI.

The Australian Dollar continues its winning streak after the positive Services PMI on Thursday. Australia’s ASX 200 extends losses on weak sentiment due to expectations of prolonged higher borrowing costs.FOMC Minutes reflect caution regarding interest rate cuts that could delay the start of an easing cycle Dollar faces challenges as US Treasury yields retrace recent gains. Investors await Thursday’s S&P US PMI data, weekly Initial Jobless Claims, and Existing Home Sales. The Australian Dollar (AUD) extended its winning streak on Thursday which began on February 14. This positive momentum was fueled by encouraging preliminary Australian Purchasing Managers Index (PMI) data. The data indicated a notable return to growth in private sector activity in February, marking the end of a five-month downturn, particularly driven by robust expansion in the services sector.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6541 | Positive Crossover | Bullish
  • MA 20 : 0.6548 | Positive Crossover | Bullish
  • MA 50 : 0.6576 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6527 | Positive Crossover | Bullish
  • MA 20 : 0.6535 | Positive Crossover | Bullish
  • MA 50 : 0.6635 | Negative Crossover | Bearish

RSI (Relative Strength Index): 55.0720 | Buy Zone | Bullish

Stochastic   Oscillator : 75.3628 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 0.6763 R2 : 0.6837
  • S1 : 0.6523 S2 : 0.6449

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 0.6567 | Take Profit: 0.6623 | Stop Loss: 0.6538

Elsewhere In The Forex Market

NZD/USD up 0.59% to 0.6216. The USD/CHF was down 0.56% to 0.8747. The EUR/GBP up 0.07% at 0.8565. USD/JPY down 0.09% at 150.14. AUD/NZD is up 0.08% at 1.0606, The USD/CNY is up 0.06% at 7.1975, and the AUD/SEK is down 0.29% at 6.7989, at the time of writing.

Key Economic Events & Data Release Today:

(USD) FOMC Meeting Minutes at 00:30. (EUR) German Manufacturing PMI (Feb) Forecast 46.1, Previous 45.5 at 14:00. (GBP) Manufacturing PMI Forecast 47.5, Previous 47.5 at 15:00. (EUR) CPI (YoY) (Jan) Forecast 2.8%, Previous 2.9% at 15:30. (CAD) Core Retail Sales (MoM) (Dec) Forecast 0.7%, Previous –0.5% at 19:00. (USD) Initial Jobless Claims Forecast 217K, Previous 212K. (USD) Manufacturing PMI (Feb) Forecast 50.5, Previous 50.7 at 20:15. (USD) Existing Home Sales (Jan) Forecast 3.96M, Previous 3.78M at 20:30.