. Daily FX Analysis - Forex stability amid market dynamics insight.

Daily FX Analysis – Forex stability amid market dynamics insight.

Daily FX Analysis – Forex stability amid market dynamics insight.

24 Apr 2024

Introduction

Amidst anticipation surrounding Germany’s IFO survey, EUR/USD maintains stability around 1.0700, buoyed by robust Eurozone business activity data and weakening US sectors. As investors reevaluate the Federal Reserve’s rate cut timeline, the Dollar faces pressure. Meanwhile, GBP/USD finds support near 1.2450 amidst softer USD, while the Australian Dollar strengthens on positive CPI data, mirroring gains in the ASX 200 Index. USD/CHF holds firm at 0.9150, driven by differing Fed and SNB policy expectations, despite the latter’s anticipated rate cut.

Markets In Focus Today – EUR/USD

EUR/USD hovers around 1.0700 ahead of German IFO survey.

EUR/USD is consolidating recovery gains at around 1.0700 in the European morning on Wednesday. The pair stays afloat amid strong Eurozone business activity data against cooling US manufacturing and services sectors. Germany’s IFO survey is next in focus. The data-driven sell-off in the Greenback followed discouraging advanced prints of US PMIs in March and came amidst further reassessment by investors of the potential timing of a Federal Reserve (Fed) rate cut, now expected to happen later than previously anticipated, potentially in September, though the possibility of a move in July has not been entirely dismissed.Looking forward, the relatively subdued economic fundamentals in the Eurozone, coupled with the resilience of the US economy, reinforce expectations for a stronger Dollar in the medium term, especially considering the possibility that the ECB may begin rate cuts before the Fed. In such a scenario, EUR/USD is expected to undergo a more pronounced decline in the short term.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0687 | Positive Crossover | Bullish
  • MA 20 : 1.0724 | Negative Crossover | Bearish
  • MA 50 : 1.0781 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0661 | Positive Crossover | Bullish
  • MA 20 : 1.0734 | Negative Crossover | Bearish
  • MA 50 : 1.0806 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 42.5355 | Neutral Zone | Neutral

Stochastic   Oscillator : 28.0146 | Sell Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Stop Sell : 1.0678 | Take Profit : 1.0623 | Stop Loss : 1.0726

GBP/USD

GBP/USD steadies near 1.2450, awaits mid-tier US data.

GBP/USD trades on a stronger note near 1.2450 amid softer USD on Wednesday. US flash S&P Global Manufacturing and Services PMI came in weaker than expectations in April. BoE’s Pill said inflation must be squeezed out of the UK economy and cautioned against cutting too soon.The GBP/USD pair recovers on Wednesday during the early Asian session. The downbeat US April PMI data and increasing appetite for the risk-linked space exert some selling pressure on the US Dollar (USD). Later in the day, the US Durable Goods Orders and weekly Mortgage Applications will be released.On the other hand, the speculation that the Bank of England (BoE) will cut interest rates in summer declined as the UK chief economist reiterated the need for “restrictive” monetary policy. On Tuesday, BoE Chief Economist Huw Pill said that easing in headline inflation was not enough of a reason to ease policy, adding that there were greater risks from cutting the rates too quickly, rather than too late. These comments provide some support to the Pound Sterling (GBP) against the USD.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2451 | Negative Crossover | Bearish
  • MA 20 : 1.2508 | Negative Crossover | Bearish
  • MA 50 : 1.2584 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2437 | Negative Crossover | Bearish
  • MA 20 : 1.2527 | Negative Crossover | Bearish
  • MA 50 : 1.2626 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 39.6303 | Sell Zone | Bearish

Stochastic   Oscillator : 26.9764 | 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 : Stop Sell : 1.2420 | Take Profit : 1.2345 | Stop Loss : 1.2483

AUD/USD

Australian Dollar holds position due to risk-on sentiment amid stable US Dollar.

The Australian Dollar appreciated after the release of stronger-than-expected CPI data on Wednesday.The Australian Dollar (AUD) extends its winning streak for the third successive day after the release of the better-than-expected Consumer Price Index (CPI) data on Wednesday. The upbeat inflation figures have the potential to fuel a hawkish sentiment regarding the Reserve Bank of Australia’s (RBA) monetary policy outlook. This has contributed to the strength of the Australian Dollar (AUD), thereby supporting the AUD/USD pair. The Australian Dollar (AUD) advances, tracking the higher ASX 200 Index, with notable contributions from the technology and healthcare sectors. Australian stocks are mirroring the positive momentum observed on Wall Street, driven by strong corporate earnings reports that have bolstered market sentiment.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6474 | Positive Crossover | Bullish
  • MA 20 : 0.6493 | Positive Crossover | Bullish
  • MA 50 : 0.6525 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6455 | Positive Crossover | Bullish
  • MA 20 : 0.6503 | Positive Crossover | Bullish
  • MA 50 : 0.6532 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 50.4828 | Buy Zone | Bullish

Stochastic   Oscillator : 42.0331 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.6628 R2 : 0.6673
  • S1 : 0.6483 S2 : 0.6438

Overall Sentiment : Neutral Market Direction : Buy

Trade Suggestion : Stop Buy : 0.6543 | Take Profit : 0.6626 | Stop Loss : 0.6490

USD/CHF

USD/CHF holds steady around the 0.9150, in line with six-month highs.

USD/CHF remains bullish due to disparities in expected policy trajectories between the Fed and SNB.The Swiss Franc is under downward pressure as the SNB is anticipated to implement another rate cut in June.The US Dollar has rebounded, potentially driven by the higher 10-year yield on US Treasury bond.USD/CHF hovers near 0.9140 during early European trading hours on Wednesday, maintaining its position close to the six-month high of 0.9152 reached on April 15. The Swiss Franc (CHF) faces challenges due to the notable disparities in expected monetary policy trajectories between the US Federal Reserve (Fed) and the Swiss National Bank (SNB). Swiss annual inflation dropped to a more than two-year low of 1% in March, emphasizing the SNB’s assertion that underlying inflation has moderated. This, coupled with pessimistic Business Confidence indicators and a decline in Retail Sales, has strengthened market expectations that the SNB may implement another rate cut in June.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.9108 | Positive Crossover | Bullish
  • MA 20 : 0.9070 | Positive Crossover | Bullish
  • MA 50 : 0.8963 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.9117 | Positive Crossover | Bullish
  • MA 20 : 0.9079 | Positive Crossover | Bullish
  • MA 50 : 0.8938 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 65.2413 | Buy Zone | Bullish

Stochastic   Oscillator : 81.3515 | Buy Zone | Positive

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 : 0.9113 | Take Profit : 0.9178 | Stop Loss : 0.9077

Elsewhere In The Forex Market

USD/JPY up 0.04% to 154.89, The NZD/USD up 0.06% to 0.5936. The EUR/GBP down 0.01% at 0.8594. USD/CAD up 0.01% at 1.3677. AUD/NZD up 0.22% at 1.0960, The USD/CNY up 0.04% at 7.2426, AUD/SEK up 0.74% at 7.0546, at the time of writing.

Key Economic Events & Data Release Today:

(AUD) CPI (QoQ) (Q1) Forecast 0.8%, Previous 0.6%% at 07:00. (EUR) German Ifo Business Climate Index (Apr) Forecast 88.9, Previous 87.8 at 13:30. (USD) Durable Goods Order (MoM) (Mar) Forecast 2.5%, Previous 1.3% at 18:00. (CAD) Core Retail Sales (MoM) (Feb) Forecast 0.0%, Previous 0.5% at 18:00.