. Daily FX Analysis - Explore Forex as Currencies React.

Daily FX Analysis – Explore Forex as Currencies React.

Daily FX Analysis – Explore Forex as Currencies React.

04 Apr 2024

Introduction

The GBP/USD pair surpasses 1.2650 amidst a focus on US data and Federal Reserve commentary. Supported by a weakened US Dollar, mixed economic indicators and dovish Fed sentiments persist. Meanwhile, EUR/USD inches towards 1.0850, benefiting from subdued USD conditions. Additionally, USD/CHF encounters pressure post-dismal US Services PMI, while the Japanese Yen struggles near historic lows, influenced by cautious BoJ statements and intervention fears.

Markets In Focus Today – GBP/USD

GBP/USD rises above 1.2650, focus on US data, Fedspeak.

GBP/USD is trading above 1.2650 early Thursday, finding support from a broadly subdued US Dollar. Mixed US data, dovish Fed commentary, and an upbeat market mood continue to act as a headwind to the US Dollar ahead of more statistics and Fedspeak. GBP/USD went into a consolidation phase above 1.2550 after closing modestly higher on Tuesday. The technical outlook is yet to point to a buildup of recovery momentum, while investors await data releases from the US. The US Dollar (USD) came under modest selling pressure in the American trading hours on Tuesday and allowed GBP/USD to edge higher. Since there were no fundamental developments that may have caused the USD to lose interest, the pullback in the USD Index could be the product of a technical correction.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2636 | Positive Crossover | Bullish
  • MA 20 : 1.2657 | Positive Crossover | Bullish
  • MA 50 : 1.2664 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2618 | Positive Crossover | Bullish
  • MA 20 : 1.2691 | Negative Crossover | Bearish
  • MA 50 : 1.2667 | Negative Crossover | Bearish

RSI (Relative Strength Index): 49.6428 | Buy Zone | Bullish

Stochastic   Oscillator : 100.00 | Buy Zone | Positive

Resistance   And Support Levels :

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

Overall Sentiment: Neutral Market Direction : Buy

Trade Suggestion: Limit Buy: 1.2640 | Take Profit : 1.2692 | Stop Loss : 1.2609

EUR/USD

EUR/USD grinds higher to 1.0850 on the subdued US Dollar.

EUR/USD is creeping higher to near 1.0850 on Thursday’s European morning. The US Dollar stays defensive after the weaker-than-expected US March ISM Services PMI data and Fed Chair Powell’s comments, underpinning the pair ahead of more Fedspeak and US jobs data. Price action in spot, in the meantime, was accompanied by further gains in US yields across various maturity periods, vs. a slight drop in German 10-year bund yields, while the monetary policy framework stayed unchanged. Regarding monetary policy, both the Federal Reserve (Fed) and the European Central Bank (ECB) are expected to begin easing cycles, possibly starting in June. However, the pace of subsequent interest rate cuts may differ, leading to potentially divergent strategies between the two central banks. Nonetheless, it is anticipated that the ECB will not significantly lag behind the Fed.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0821 | Positive Crossover | Bullish
  • MA 20 : 1.0833 | Positive Crossover | Bullish
  • MA 50 : 1.0844 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0808 | Positive Crossover | Bullish
  • MA 20 : 1.0856 | Negative Crossover | Bearish
  • MA 50 : 1.0829 | Positive Crossover | Bullish

RSI (Relative Strength Index): 52.4541 | Buy Zone | Bullish

Stochastic   Oscillator : 43.5826 | Neutral Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 1.0831 | Take Profit: 1.0886 | Stop Loss: 1.0800

USD/CHF

USD/CHF falls from 0.9100 after downbeat US Services PMI.

USD/CHF faces selling pressure near 0.9100 as US Dollar drops on weak ISM Services PMI data. Fed’s hawkish guidance has dented Fed rate cut expectations for June. Swiss weak Retail Sales boost speculation for more rate cuts by the SNB. The USD/CHF pair faces a sharp sell-off near the round-level resistance of 0.9100 as the United States Institute of Supply Management (ISM) has reported weak Services PMI data for March. The Services PMI, which represents the service sector that accounts for two-thirds of the US economy, falls to 51.4 from expectations of 52.7 and the prior reading of 52.6. The US Dollar has faced significant selling pressure after weak US Services PMI data. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, dropped to 104.40. The market sentiment improves as the S&P 500 has added significant gains after a subdued opening.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.9014 | Positive Crossover | Bullish
  • MA 20 : 0.8958 | Positive Crossover | Bullish
  • MA 50 : 0.8859 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.9027 | Positive Crossover | Bullish
  • MA 20 : 0.8931 | Positive Crossover | Bullish
  • MA 50 : 0.8827 | Positive Crossover | Bullish

RSI (Relative Strength Index): 70.0011 | Buy Zone | Bullish

Stochastic   Oscillator : 15.1 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.9068 R2 : 0.9148
  • S1 : 0.8807 S2 : 0.8726

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 0.8993 | Take Profit: 0.9073 | Stop Loss: 0.8945

USD/JPY

Japanese Yen struggles to attract buyers and hangs near a multi-decade low against the USD.

The Japanese Yen is undermined by the BoJ’s cautious outlook and a positive risk tone. Intervention fears might limit losses for the JPY and cap any further gains for USD/JPY. Traders prefer to wait for a break of a short-term range ahead of the US NFP on Friday. The Japanese Yen (JPY) remains depressed against its American counterpart heading into the European session on Thursday and trades just above a multi-decade low touched last week. The Bank of Japan’s (BoJ) dovish outlook, saying that monetary policy will remain easy for some time, along with a positive risk tone, turn out to be key factors undermining the safe-haven JPY. That said, speculations that Japanese authorities will intervene in the market to prop up the domestic currency hold back the JPY bears from placing aggressive bets.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 151.3133 | Positive Crossover | Bullish
  • MA 20 : 150.7578 | Positive Crossover | Bullish
  • MA 50 : 149.6165 | Positive Crossover | Bullish

Simple :

  • MA 10 : 151.4858 | Positive Crossover | Bullish
  • MA 20 : 150.2035 | Positive Crossover | Bullish
  • MA 50 : 149.6799 | Positive Crossover | Bullish

RSI (Relative Strength Index): 65.2352 | Buy Zone | Bullish

Stochastic   Oscillator : 44.1 | Neutral Zone | Negative

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: 150.81 | Take Profit: 151.99 | Stop Loss: 150.07

Elsewhere In The Forex Market

AUD/USD up 0.48% to 0.6596, The USD/CAD down 0.14% to 1.3508. The EUR/GBP is down 0.14% at 0.8546. NZD/USD up 0.47% at 0.6037. AUD/NZD is down 0.2% at 1.0924, The USD/CNY is up 0.01% at 7.2320, and AUD/SEK is up 0.24% at 7.0048, at the time of writing.

Key Economic Events & Data Release Today:

(GBP) Composite PMI (Mar) Forecast 52.9, Previous 53.0 at 14:00. (GBP) Service PMI (Mar) Forecast –53.4, Previous –53.8 at 14:00. (EUR) ECB Publishes Account of Monetary Policy Meeting at 17:00. (USD) Initial Jobless Claims Forecast 213K, Previous 210K at 18:00.