. Daily FX Analysis - Forex Responds to Economic Data, Tensions.

Daily FX Analysis – Forex Responds to Economic Data, Tensions.

Daily FX Analysis – Forex Responds to Economic Data, Tensions.

09 Apr 2024

Introduction

The EUR/USD pair maintains its position above 1.0860, with attention drawn to upcoming US CPI data and the ECB rate decision. Supported by a weakened US Dollar, the pair sees modest gains amidst anticipation of key economic indicators, including the US NFIB Business Optimism Index. Meanwhile, GBP/USD and NZD/USD await US CPI figures amid shifting market sentiments and RBNZ’s monetary policy meeting. USD/CAD faces pressure below 1.3600 amid Middle East tensions and oil price dynamics.

Markets In Focus Today – EUR/USD

EUR/USD holds above 1.0860, with eyes on US CPI, and ECB rate decision.

The EUR/USD pair posts modest gains around 1.0860 during the early Asian session on Tuesday. The decline of the US Dollar (USD) provides some support to the major pair. The US NFIB Business Optimism Index and the RCM/TIPP Economic Optimism Index are due on Tuesday, along with the speech by Minneapolis Fed N. Kashkari. The upbeat US labor market data and the strength of the US economy raised uncertainties about rate cuts from the Federal Reserve (Fed) this year. Minneapolis Fed President Neel Kashkari said last week that he penciled in two interest rate cuts this year but if inflation continues to stall, no rate cuts would be a possible scenario. The attention this week will shift to the US March Consumer Price Index (CPI) data on Wednesday after February’s annual inflation rate of 3.2% came in higher than expected. The stronger-than-expected figure in March data could dampen expectations for rate cuts in June, while softer inflation figures could fuel speculation for rate reductions.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0833 | Positive Crossover | Bullish
  • MA 20 : 1.0837 | Positive Crossover | Bullish
  • MA 50 : 1.0844 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0814 | Positive Crossover | Bullish
  • MA 20 : 1.0843 | Positive Crossover | Bullish
  • MA 50 : 1.0829 | Positive Crossover | Bullish

RSI (Relative Strength Index): 53.0680 | Buy Zone | Bullish

Stochastic   Oscillator : 57.9471 | Buy 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: Stop Buy: 1.0870 | Take Profit: 1.0910 | Stop Loss : 1.0844

GBP/USD

GBP/USD clings to 1.2650 amid improved risk appetite, awaits US CPI.

GBP/USD gained ground on risk-on sentiment ahead of US consumer prices.CME FedWatch Tool suggests the likelihood of a Fed rate cut in June has decreased to 51.1%.BRC Like-For-Like Retail Sales grew by 3.2% YoY in March, marking the strongest growth since August 2023.GBP/USD holds ground in the positive territory, hovering around 1.2650 during the Asian session on Tuesday. The pair gained ground on improved risk appetite ahead of Consumer Price Index data scheduled on Wednesday. Moving forward, the Pound Sterling (GBP) could be influenced by the release of monthly Gross Domestic Product (GDP) and factory data for February, scheduled for publication on Friday.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2641 | Positive Crossover | Bullish
  • MA 20 : 1.2654 | Positive Crossover | Bullish
  • MA 50 : 1.2662 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2624 | Positive Crossover | Bullish
  • MA 20 : 1.2664 | Negative Crossover | Bearish
  • MA 50 : 1.2664 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 49.7208 | Buy Zone | Bullish

Stochastic   Oscillator : 41.4449 | Buy Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment : Neutral Market Direction : Buy

Trade Suggestion : Stop Buy : 1.2666 | Take Profit : 1.2701 | Stop Loss : 1.2647

NZD/USD

NZD/USD pares gains after weaker NZIER Business Confidence, stays near 0.6040.

NZD/USD faces struggles on contracted business outlook in New Zealand.RBNZ is anticipated to maintain cash rates at 5.5% for the sixth consecutive meeting on Wednesday.Headline US CPI could show an increase in March while the core measure is anticipated to cool down.NZD/USD retains its position in positive territory, although it has trimmed some intraday gains, following the release of weaker Business Confidence data from New Zealand on Tuesday. At the time of writing, the pair trades near 0.6040 during the Asian session. The NZIER Business Confidence (quarter-over-quarter) indicated a 25% contraction in the business outlook in New Zealand for the first quarter of 2024, compared to a 2% decline in the previous quarter. Additionally, the Reserve Bank of New Zealand (RBNZ) is scheduled to hold its monetary policy meeting on Wednesday.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6017 | Positive Crossover | Bullish
  • MA 20 : 0.6033 | Positive Crossover | Bullish
  • MA 50 : 0.6074 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.5999 | Positive Crossover | Bullish
  • MA 20 : 0.6030 | Positive Crossover | Bullish
  • MA 50 : 0.6087 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 49.3111 | Buy Zone | Bullish

Stochastic   Oscillator : 52.8660 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 0.6149 R2 : 0.6211
  • S1 : 0.5951 S2 : 0.5890

Overall Sentiment: Neutral Market Direction: Buy

Trade Suggestion : Stop Buy : 0.6046 | Take Profit : 0.6091 | Stop Loss : 0.6019

USD/CAD

USD/CAD remains below 1.3600 as Middle East tensions continue to underpin Oil prices.

The USD/CAD pair attracts some dip-buying during the Asian session on Tuesday and reverses a part of the previous day’s losses. Spot prices, for now, seem to have stalled the recent pullback from the vicinity of mid-1.3600s or the YTD high touched last week, though remain below the 1.3600 round figure, warranting caution for bullish traders. As investors look past the disappointing Canadian employment details released last Friday, the overnight goodish intraday rise in Crude Oil prices is seen underpinning the commodity-linked Loonie and acting as a headwind for the USD/CAD pair. The optimism over a possible ceasefire between Israel and Hamas faded rather quickly as talks remained deadlocked. Adding to this, Iran has threatened military action against Israel over an alleged strike on its embassy in Syria. This raises the risk of supply disruptions from the Middle East and lifts the black liquid closer to a five-month top set last Friday.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.3562 | Positive Crossover | Bullish
  • MA 20 : 1.3551 | Positive Crossover | Bullish
  • MA 50 : 1.3525 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.3558 | Positive Crossover | Bullish
  • MA 20 : 1.3550 | Positive Crossover | Bullish
  • MA 50 : 1.3519 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 55.1012 | Buy Zone | Bullish

Stochastic   Oscillator : 64.6639 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.3598 R2 : 1.3644
  • S1 : 1.3450 S2 : 1.3404

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Stop Buy : 1.3583 | Take Profit : 1.3616 | Stop Loss : 1.3563

Elsewhere In The Forex Market

AUD/USD up 0.07% to 0.6608, The USD/JPY up 0.07% to 151.88. The EUR/GBP down 0.05% at 0.8576. USD/CHF down 0.06% at 0.9048. AUD/NZD up 0.4% at 1.0940, The USD/CNY up 0.05% at 7.2335, AUD/SEK up 0.07% at 6.9819, at the time of writing.

Key Economic Events & Data Release Today:

(NZD) NZIER Business Confidence (Q1) Previous -2.0% at 03:30. (GBP) BRS Retail Sales Monitor (YoY) (Mar) Forecast 1.8%, Previous 1.0% at 04:31. (USD) EIA Short –Term Energy Outlook at 21:30.