. Daily FX Analysis - Forex majors pressured by data, speculation.

Daily FX Analysis – Forex majors pressured by data, speculation.

Daily FX Analysis – Forex majors pressured by data, speculation.

28 Mar 2024

Introduction

The EUR/USD pair slips below 1.0800 following the release of German Retail Sales data, with resurgent demand for the US Dollar adding pressure. Attention turns to upcoming US data. Meanwhile, GBP/USD struggles near 1.2600 amidst anticipation of US core PCE inflation figures. Expectations for BoE rate cuts weigh on the Pound Sterling. NZD/USD plunges to a yearly low amid softer risk sentiment and RBNZ rate cut speculations. USD/CAD faces resistance below 1.3600 as traders await key economic data from the US and Canada.

Markets In Focus Today – EUR/USD

EUR/USD drops below 1.0800 after German Retail Sales data.

EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus. EUR/USD came under modest bearish pressure and declined toward 1.0800 in the early European session on Thursday. The near-term technical outlook suggests that the bearish bias stays intact but the pair’s action could remain subdued heading into the Easter holiday. Although the improving risk sentiment made it difficult for the US Dollar (USD) to find demand on Wednesday, hawkish comments from Federal Reserve Governor Christopher Waller helped the currency stay resilient against its rivals and limited EUR/USD’s upside.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0840 | Negative Crossover | Bearish
  • MA 20 : 1.0852 | Negative Crossover | Bearish
  • MA 50 : 1.0853 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0848 | Negative Crossover | Bearish
  • MA 20 : 1.0875 | Negative Crossover | Bearish
  • MA 50 : 1.0836 | Negative Crossover | Bearish

RSI (Relative Strength Index): 39.2580 | Sell Zone | Bearish

Stochastic   Oscillator : 10.0193 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.0876 R2 : 1.0924
  • S1 : 1.0722 S2 : 1.0674

Overall Sentiment : Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 1.0800 | Take Profit: 1.0719 | Stop Loss: 1.0860

GBP/USD

GBP/USD stays weak near 1.2600 amid market caution.

The Pound Sterling falls to 1.2600 against the US Dollar as investors wait for US core PCE inflation data for February. The Fed’s preferred inflation gauge could give clues over when the Fed may begin the rate-cut cycle.UK’s soft inflation data for February has lifted expectations for BoE rate cuts in June. The Pound Sterling (GBP) drops to 1.2600 against the US Dollar in Thursday’s European session. More broadly, the GBP/USD pair struggles for direction as investors wait for fresh cues about when the Bank of England (BoE) will begin reducing interest rates. The United Kingdom’s inflation has come down significantly, but BoE policymakers are expected to adopt a cautious approach as early rate cuts could revamp price pressures again. Investors expect that the BoE will start cutting rates from the June meeting. The expectations have been prompted by sharply easing inflation in February. Also, no BoE policymakers see the need for more rate hikes, indicating that the current level of interest rates is sufficiently restrictive. Generally, the Pound Sterling weakens when investors expect the BoE will start reducing borrowing rates early.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2659 | Negative Crossover | Bearish
  • MA 20 : 1.2681 | Negative Crossover | Bearish
  • MA 50 : 1.2674 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2672 | Negative Crossover | Bearish
  • MA 20 : 1.2716 | Negative Crossover | Bearish
  • MA 50 : 1.2676 | Negative Crossover | Bearish

RSI (Relative Strength Index): 39.2275 | Sell Zone | Bearish

Stochastic   Oscillator : 12.8080 | Sell Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.2735 R2 : 1.2794
  • S1 : 1.2541 S2 : 1.2482

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 1.2616 | Take Profit: 1.2527 | Stop Loss: 1.2682

NZD/USD

NZD/USD plummets to its lowest level since November, and seems vulnerable while below 0.6000.

A combination of factors drags the NZD/USD pair to a fresh YTD trough on Thursday. Rising bets for a rate cut by RBNZ in July weigh on the Kiwi amid a softer risk tone. Sustained USD buying exerts additional pressure and contributes to the ongoing slide. The NZD/USD pair comes under heavy selling pressure on Thursday and continues losing ground through the first half of the European session. The downward trajectory drags spot prices to the 0.5970-0.5965 region, or the lowest level since November 17, and is sponsored by a combination of factors. The New Zealand Dollar (NZD) weakened after the business outlook survey by ANZ Bank showed weakening activity indicators and a slight fall in inflation pressures. Moreover, markets are pricing in an almost 50% chance the Reserve Bank of New Zealand (RBNZ) could cut rates as early as July. This, along with a fresh bout of the US Dollar (USD) buying, turn out to be key factors exerting downward pressure on the NZD/USD pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6033 | Negative Crossover | Bearish
  • MA 20 : 0.6069 | Negative Crossover | Bearish
  • MA 50 : 0.6103 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6041 | Negative Crossover | Bearish
  • MA 20 : 0.6086 | Negative Crossover | Bearish
  • MA 50 : 0.6106 | Negative Crossover | Bearish

RSI (Relative Strength Index): 29.9349 | Sell Zone | Bearish

Stochastic   Oscillator : 5.1582 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.6182 R2 : 0.6224
  • S1 : 0.6044 S2 : 0.6002

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 0.5996 | Take Profit: 0.5932 | Stop Loss: 0.6039

USD/CAD

USD/CAD struggles to capitalize on its modest intraday gains and remains below the 1.3600 mark.

USD/CAD gained some positive traction on Thursday, though the upside remains capped. The Fed’s projected three rate cuts in 2024 caps the upside for the USD and the major. An uptick in Oil prices underpins the Loonie and contributes to keeping a lid on the pair. The USD/CAD pair attracted some buyers during the Asian session on Thursday and for now, seems to have snapped a three-day losing streak, albeit lacks follow-through. Spot prices remain below the 1.3600 mark as traders look to important macro data from the US and Canada for some meaningful impetus. Thursday’s economic docket highlights the release of the monthly Canadian GDP report, along with the final US Q4 GDP print. Apart from this, the usual Initial Weekly Jobless Claims, Pending Home Sales and the revised Michigan Consumer Sentiment Index might influence the US Dollar (USD), which might produce short-term trading opportunities around the USD/CAD pair. The focus, however, remains glued to the US Personal Consumption Expenditures (PCE) Price Index on Friday.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.3565 | Positive Crossover | Bullish
  • MA 20 : 1.3544 | Positive Crossover | Bullish
  • MA 50 : 1.3515 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.3561 | Positive Crossover | Bullish
  • MA 20 : 1.3537 | Positive Crossover | Bullish
  • MA 50 : 1.3503 | Positive Crossover | Bullish

RSI (Relative Strength Index): 59.6559 | Buy Zone | Bullish

Stochastic   Oscillator : 85.9365 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.3607 R2 : 1.3664
  • S1 : 1.3424 S2 : 1.3367

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Stop Buy: 1.3616 | Take Profit: 1.3702 | Stop Loss: 1.3560

Elsewhere In The Forex Market

AUD/USD down 0.72% to 0.6487, The USD/CHF up 0.22% to 0.9057. The EUR/GBP up 0.06% at 0.8582. USD/JPY up 0.08% at 151.44. AUD/NZD is up 0.03% at 1.0886, The USD/CNY is up 0.03% at 7.2298, and AUD/SEK is up 0.08% at 6.9399, at the time of writing.

Key Economic Events & Data Release Today:

(AUD) Retail Sales (MoM) (Feb) Forecast 0.4%, Previous 1.1% at 06:00 . (GBP) GDP (QoQ) (Q4) Forecast –0.3%, Previous –0.1% at 12:30. (GBP) GDP (YoY) (Q4) Forecast –0.2%, Previous 0.3% at 12:30. (USD) GDP (QoQ) (Q4) Forecast 3.2%, Previous 4.9% at 18:00. (CAD) GDP (MoM) (Jan) Forecast 0.4%, Previous 0.0% at 18:00. (USD) Initial Jobless Claims Forecast 212K, Previous 210K at 18:00. (USD) Pending Home Sales (MoM) (Feb) Forecast 1.4%, Previous –4.9% at 19:30