. Daily FX Analysis - GBP/EUR action, USD surprises.

Daily FX Analysis – GBP/EUR action, USD surprises.

Daily FX Analysis – GBP/EUR action, USD surprises.

14 Mar 2024

Introduction

The GBP/USD pair struggles below 1.2800 but maintains bullish potential. Despite consolidative movements, buyers eye support confirmation at 1.2800. Meanwhile, the USD strengthens on positive US inflation data, impacting various currency pairs including EUR/USD and USD/CAD. Anticipation builds around the Fed and ECB’s differing easing cycles, while the AUD reacts to domestic and global economic cues.

Markets In Focus Today – GBP/USD

GBP/USD remains depressed below 1.2800, bullish potential seems intact.

The GBP/USD pair continues with its struggle to gain any meaningful traction and extends its consolidation price move around the 1.2800 mark for the second successive day on Thursday. GBP/USD went into a consolidation phase near 1.2800 early Wednesday following a two-day slide. The pair’s near term technical outlook is yet to point to a buildup of bullish momentum but buyers could take action once 1.2800 is confirmed as support. GBP/USD came under heavy bearish pressure and declined below 1.2750 in the early trading hours of the American session on Tuesday after the US inflation data. The Consumer Price Index (CPI) and the Core CPI both rose 0.4% on a monthly basis in February, the US Bureau of Labor Statistics reported. The benchmark 10-year US Treasury bond yield climbed above 4.1% and helped the US Dollar (USD) gather strength against its rivals.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2766 | Positive Crossover | Bullish
  • MA 20 : 1.2727 | Positive Crossover | Bullish
  • MA 50 : 1.2680 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2764 | Positive Crossover | Bullish
  • MA 20 : 1.2703 | Positive Crossover | Bullish
  • MA 50 : 1.2686 | Positive Crossover | Bullish

RSI (Relative Strength Index): 60.8034 | Buy Zone | Bullish

Stochastic   Oscillator : 65.7596 | Buy Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Stop Buy: 1.2803 | Take Profit: 1.2858 | Stop Loss: 1.2769

EUR/USD

EUR/USD lingers around 1.0950, striving to uphold its recent advances.

EUR/USD remains steady near 1.0950 during Thursday’s Asian session, in an attempt to maintain gains from the prior session. The pair received a boost as the US Dollar struggled to sustain its strength despite higher US Treasury yields spurred by positive inflation data. The consistent appetite for the risk-associated universe put the US Dollar (USD) under extra downward pressure, allowing further breathing room for EUR/USD on Wednesday. Considering the broader macroeconomic landscape, both the Federal Reserve (Fed) and the European Central Bank (ECB) are anticipated to initiate their easing cycles early in the summer, likely in June. However, the pace of subsequent interest rate cuts may vary, potentially distinguishing the strategies of both central banks. Nonetheless, the ECB is unlikely to significantly lag behind the Fed.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0909 | Positive Crossover | Bullish
  • MA 20 : 1.0878 | Positive Crossover | Bullish
  • MA 50 : 1.0859 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0907 | Positive Crossover | Bullish
  • MA 20 : 1.0861 | Positive Crossover | Bullish
  • MA 50 : 1.0853 | Positive Crossover | Bullish

RSI (Relative Strength Index): 63.5745 | Buy Zone | Bullish

Stochastic   Oscillator : 76.5192 | Buy Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion : Limit Buy : 1.0920 | Take Profit : 1.0980 | Stop Loss : 1.0886

USD/CAD

USD/CAD drifts lower to 1.3470, investors await US Retail Sales data.

USD/CAD loses traction near 1.3468 on the softer USD. The upbeat US CPI data might keep the Fed waiting until the summer before starting to cut rates.Markets believe the BoC will not move aggressively on interest rates. Investors will focus on the Canadian Manufacturing Sales and the US Retail Sales, due on Thursday. The USD/CAD pair trades in negative territory for a second consecutive day during the early Asian session on Thursday. The US Dollar (USD) resumes its decline below the 103.00 mark and drags the pair lower. Investors await the US Retail Sales data on Thursday for fresh impetus, which is projected to rise 0.8% MoM in February. At press time, USD/CAD is trading at 1.3468, down 0.02% on the day.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.3497 | Negative Crossover | Bearish
  • MA 20 : 1.3501 | Negative Crossover | Bearish
  • MA 50 : 1.3489 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.3510 | Negative Crossover | Bearish
  • MA 20 : 1.3512 | Negative Crossover | Bearish
  • MA 50 : 1.3474 | Positive Crossover | Bullish

RSI (Relative Strength Index): 47.3676 | Buy Zone | Bullish

Stochastic   Oscillator : 31.8263 | Sell Zone | Negative

Resistance   And Support Levels :

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

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 1.3494 | Take Profit: 1.3434 | Stop Loss: 1.3540

AUD/USD

Australian Dollar weakens as the ASX 200 index declines, awaits US key data.

Australian Dollar trims its intraday gains on the lower domestic equity market.Australia’s S&P/ASX 200 Index tracks declines in the financial-linked shares, outweighing iron ore miners.CME FedWatch Tool suggests the probability of a rate cut in March and May has decreased to 1.0% and 9.6%, respectively.The Australian Dollar (AUD) shifts into negative territory after relinquishing its earlier intraday gains on Thursday. However, the AUD/USD pair strengthened due to expectations of the Federal Reserve (Fed) initiating interest rate cuts in June, while the Reserve Bank of Australia (RBA) continues to suggest it may need to raise rates even further. RBA Governor Michelle Bullock recently stated that inflation in Australia is primarily “homegrown” and “demand-driven,” attributable to the strength of the labor market and increasing wage inflation. The RBA does not anticipate inflation falling back to target until 2026.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6589 | Positive Crossover | Bullish
  • MA 20 : 0.6570 | Positive Crossover | Bullish
  • MA 50 : 0.6571 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6579 | Positive Crossover | Bullish
  • MA 20 : 0.6557 | Positive Crossover | Bullish
  • MA 50 : 0.6571 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 59.0616 | Buy Zone | Bullish

Stochastic   Oscillator : 71.5088 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.6580 R2 : 0.6620
  • S1 : 0.6453 S2 : 0.6413

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 0.6600 | Take Profit: 0.6650 | Stop Loss : 0.6573

Elsewhere In The Forex Market

NZD/USD up 0.04% to 0.6158, The USD/CHF up 0.09% to 0.8796. The EUR/GBP down 0.01% at 0.8546. USD/JPY up 0.09% at 147.87. AUD/NZD down 0.08% at 1.0741, The USD/CNY up 0.01% at 7.1927, AUD/SEK up 0.14% at 6.7701, at the time of writing.

Key Economic Events & Data Release Today:

(USD) Retail Sales (MoM) (Feb) Forecast 0.8%, Previous –0.8% at 08:30. (USD) Core Retail Sales (MoM) (Feb) Forecast 0.5%, Previous –0.6% at 08:30. (USD) PPI (MoM) (Feb) Forecast 0.3%, Previous 0.3% at 08:30. (CAD) Manufacturing Sales (MoM) (Jan) Forecast 0.3%, Previous –0.7% at 09:30. (USD) Initial Jobless Claims Forecast 218K, Previous 217K at 08:30.