. Daily FX Analysis - Euro rises, GBP up, AUD gains.

Daily FX Analysis – Euro rises, GBP up, AUD gains.

Daily FX Analysis – Euro rises, GBP up, AUD gains.

22 Apr 2024

Introduction

The EUR/USD pair surges above 1.0650, fueled by anticipation of Eurozone PMI data amidst a backdrop of Federal Reserve officials hinting at a hawkish shift. Eyes are on Eurozone PMI figures and the US PCE Index. ECB signals potential rate cuts, while GBP/USD rebounds from yearly lows on eased Middle East tensions. Japanese Yen remains subdued near multi-decade lows, with BoJ policy decision and US data in focus. Australian Dollar gains traction amid risk-on sentiment but faces RBA rate cut speculation.

Markets In Focus Today – EUR/USD

EUR/USD gains ground above 1.0650 ahead of Eurozone PMI data.

The EUR/USD pair traded on a stronger note around 1.0665 during the early Asian session on Monday. However, the pair’s upside might be limited due to the commentary from Federal Reserve (Fed) officials suggesting a shift to an increasingly hawkish stance. Investors will keep an eye on the preliminary Eurozone HCOB PMI for April on Tuesday ahead of the final reading of the US March Personal Consumption Expenditures Price Index (PCE) on Friday. The European Central Bank (ECB) is expected to hold rates steady in its June meeting. The ECB delivered a firm message that markets should expect an interest rate cut soon if we don’t have a major shock in development. Meanwhile, François Villeroy de Galhau, governor of the Bank of France, stated the ECB should cut in June so that higher rates do not cause too much damage to the euro area economy. Joachim Nagel, president of Germany’s Bundesbank, commented that the “probability of June rate cut is increasing, adding that there were caveats, including the risk of higher oil prices.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0686 | Negative Crossover | Bearish
  • MA 20 : 1.0732 | Negative Crossover | Bearish
  • MA 50 : 1.0789 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0683 | Negative Crossover | Bearish
  • MA 20 : 1.0748 | Negative Crossover | Bearish
  • MA 50 : 1.0807 | Negative Crossover | Bearish

RSI (Relative Strength Index): 37.8094 | Sell Zone | Bearish

Stochastic   Oscillator : 18.1637 | Sell Zone | Positive

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 : 1.0688 | Take Profit : 1.0618 | Stop Loss : 1.0748

GBP/USD

GBP/USD rebounds from YTD trough, steadily climbs back closer to 1.2400 mark.

The GBP/USD pair stages a modest recovery from the 1.2365-1.2360 area, or its lowest level since November 14 touched during the Asian session on Monday and for now, seems to have snapped a two-day losing streak. The uptick is supported by a modest US Dollar (USD) down tick and lifted spot prices back closer to the 1.2400 mark in the last hour, though any meaningful upside still seems elusive. Iran signaled that it has no plans to retaliate against the Israeli limited-scale missiles strike on Friday, easing fears about a further escalation of tensions in the Middle East. This, in turn, boosts investors’ confidence, which, in turn, is seen undermining the safe-haven Greenback and acting as a tailwind for the GBP/USD pair. Meanwhile, expectations that the Federal Reserve (Fed) will keep rates higher for longer in the wake of still-sticky inflation in the US help limit the USD downside and might cap the major.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2462 | Negative Crossover | Bearish
  • MA 20 : 1.2526 | Negative Crossover | Bearish
  • MA 50 : 1.2597 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2473 | Negative Crossover | Bearish
  • MA 20 : 1.2547 | Negative Crossover | Bearish
  • MA 50 : 1.2632 | Negative Crossover | Bearish

RSI (Relative Strength Index): 30.9873 | Sell Zone | Bearish

Stochastic   Oscillator : 5.0673 | Sell Zone | Negative

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: 1.2438 | Take Profit: 1.2357 | Stop Loss: 1.2510

USD/JPY

Japanese Yen remains confined in a range near a 34-year low, not out of the woods yet.

The Japanese Yen (JPY) remains depressed against its American counterpart and languishes near a multi-decade low during the Asian session on Monday. The Bank of Japan’s (BoJ) cautious approach towards further policy tightening, along with expectations that the Federal Reserve (Fed) will delay cutting interest rates, suggests that the US-Japan rate differential will stay wide. This, along with hopes that the Iran-Israel conflict will not escalate further, turns out to be a key factor that is seen undermining the safe-haven JPY. That said, the BoJ Governor Kazuo Ueda’s hawkish rhetoric last week and fresh warnings by Japanese Finance Minister Shunichi Suzuki against excessive currency market moves help limit deeper JPY losses. Traders also seem reluctant and prefer to wait on the sidelines ahead of the crucial BoJ policy decision on Friday. Apart from this, important US macro releases – the Advance Q1 GDP on Thursday and the Personal Consumption Expenditures (PCE) Price Index on Friday – will determine the near-term trajectory for the USD/JPY pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 153.8540 | Positive Crossover | Bullish
  • MA 20 : 152.8918 | Positive Crossover | Bullish
  • MA 50 : 151.1327 | Positive Crossover | Bullish

Simple :

  • MA 10 : 153.8257 | Positive Crossover | Bullish
  • MA 20 : 152.6628 | Positive Crossover | Bullish
  • MA 50 : 150.9552 | Positive Crossover | Bullish

RSI (Relative Strength Index): 76.5249 | Buy Zone | Bullish

Stochastic   Oscillator : 95.8228 | Buy Zone | Positive

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 : 153.88 | Take Profit : 154.78 | Stop Loss : 153.38

AUD/USD

Australian Dollar gains ground amid risk-on mood, tepid US Dollar.

The Australian Dollar appreciates possibly due to improved risk sentiment amid de-escalated tensions in the Middle East.The Australian currency could face challenges on the market sentiment of RBA cutting policy rates before the year’s end.The US Dollar may rebound as comments from Federal Reserve officials suggest a hawkish stance on monetary policy tightening.The Australian Dollar (AUD) breaks its two-day losing streak on Monday amid risk-on sentiment, supported by indications of de-escalating geopolitical tensions. An Iranian official’s statement suggesting no immediate plans for retaliation against Israeli airstrikes contributes to the improved sentiment. The Australian Dollar may encounter challenges ahead, particularly as domestic inflation continues to moderate, aligning with the Reserve Bank of Australia’s (RBA) latest forecasts. Furthermore, the persistently tight labor market could lead to calls for an RBA rate reduction before the year’s end.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6459 | Negative Crossover | Bearish
  • MA 20 : 0.6491 | Negative Crossover | Bearish
  • MA 50 : 0.6527 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6468 | Negative Crossover | Bearish
  • MA 20 : 0.6506 | Negative Crossover | Bearish
  • MA 50 : 0.6530 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 40.4287 | Neutral Zone | Neutral

Stochastic   Oscillator : 18.7544 | Sell Zone | Positive

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 Sell : 0.6455 | Take Profit : 0.6385 | Stop Loss : 0.6508

Elsewhere In The Forex Market

USD/CHF up 0.24% to 0.9119, The NZD/USD up 0.34% to 0.5908. The EUR/GBP is down 0.04% at 0.8611. USD/CAD is down 0.01% at 1.3732. AUD/NZD is down 0.01% at 1.0882, The USD/CNY is up 0.04% at 7.2426, and AUD/SEK is up 0.22% at 7.0247, at the time of writing.

Key Economic Events & Data Release Today:

(CNY) PBoC Loan Prime Rate Forecast –3.45%, Previous –3.45% at 06:45. (EUR) ECB President Lagarde Speaks at 21:00.