. Daily FX Analysis - GBP/EUR volatile, AUD surges optimistically.

Daily FX Analysis – GBP/EUR volatile, AUD surges optimistically.

Daily FX Analysis – GBP/EUR volatile, AUD surges optimistically.

18 Apr 2024

Introduction

GBP/USD struggles below 1.2470, watching US data. The pair trades softly near 1.2450 in early Asian trading on Thursday. Soft UK inflation data fuels expectations of upcoming BoE rate cuts, pressuring the Pound. Eyes are on US weekly Initial Jobless Claims, Philly Fed Manufacturing Index, CB Leading Index, and Existing Home Sales. Investors anticipate the first rate cut by August or September, according to LSEG data.

Markets In Focus Today – GBP/USD

GBP/USD remains capped below 1.2470, eyes on US data.

The GBP/USD pair trades on a softer note around 1.2450 during the early Asian trading hours on Thursday. The softer UK inflation data prompted the expectation that the Bank of England (BoE) will start lowering interest rates in the coming months, which weighs on the Pound Sterling (GBP) against the Greenback. Investors will take more cues from the US weekly Initial Jobless Claims, the Philly Fed Manufacturing Index, the CB Leading Index, and Existing Home Sales, due on Thursday. The BoE hinted that the UK is still on course for an interest rate cut, as recent data showed a further easing in the pace of price growth in the economy. On Wednesday, the Office for National Statistics (ONS) showed that the UK Consumer Price Index (CPI) inflation dropped to 3.2% in the 12 months to March, the softest level for two-and-a-half years. The figure was down from the previous reading of 3.4%. However, investors expect the first rate cut in August or September, according to the LSEG data.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2510 | Negative Crossover | Bearish
  • MA 20 : 1.2563 | Negative Crossover | Bearish
  • MA 50 : 1.2617 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2530 | Negative Crossover | Bearish
  • MA 20 : 1.2573 | Negative Crossover | Bearish
  • MA 50 : 1.2642 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 36.8553 | Sell Zone | Bearish

Stochastic   Oscillator : 14.5215 | Sell Zone | Positive

Resistance   And Support Levels :

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

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 1.2515 | Take Profit : 1.2436 | Stop Loss : 1.2576

EUR/USD

EUR/USD consolidates recovery below 1.0700 amid upbeat mood.

EUR/USD is consolidating its recovery but remains below 1.0700 in early Europe on Thursday. The US Dollar holds its corrective decline amid a stabilizing market mood, despite looming Middle East geopolitical risks. Speeches from ECB and Fed officials remain on tap. A decent bounce in EUR/USD left behind six consecutive daily drops, including a new YTD bottom near 1.0600 the figure, regaining the mid-1.0600s in response to some loss of impetus in the Dollar’s rally. The recent multi-session strong rally in the greenback occurred as investors re-evaluated the timing of a potential rate cut by the Federal Reserve (Fed), now anticipated to occur later than previously thought, potentially in December.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0706 | Negative Crossover | Bearish
  • MA 20 : 1.0751 | Negative Crossover | Bearish
  • MA 50 : 1.0801 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0725 | Negative Crossover | Bearish
  • MA 20 : 1.0766 | Negative Crossover | Bearish
  • MA 50 : 1.0813 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 38.5171 | Sell Zone | Bearish

Stochastic   Oscillator : 19.4200 | Neutral Zone | Positive

Resistance   And Support Levels :

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

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 1.0706 | Take Profit : 1.0628 | Stop Loss : 1.0769

USD/CAD

USD/CAD depreciates to near 1.3750 on improved risk sentiment amid weaker crude Oil.

USD/CAD loses ground due to the subdued US Dollar on Thursday.Lower US Treasury yields put pressure on the Greenback.The decline in the WTI price may limit the advance of the Canadian Dollar.USD/CAD extends its losses for the second consecutive session on Thursday, trading around 1.3750 during the Asian session. The pair follows the retreat from the five-month high of 1.3846 reached on Tuesday. Meanwhile, the US Dollar Index (DXY) loses ground, primarily influenced by subdued US Treasury yields. DXY falls to near 105.90 with the 2-year and 10-year yields on US Treasury bonds stand at 4.92% and 4.57%, respectively, by the press time. This decline in the US Dollar exerts pressure on the USD/CAD pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.3713 | Positive Crossover | Bullish
  • MA 20 : 1.3655 | Positive Crossover | Bullish
  • MA 50 : 1.3581 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.3700 | Positive Crossover | Bullish
  • MA 20 : 1.3631 | Positive Crossover | Bullish
  • MA 50 : 1.3560 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 63.0282 | Buy Zone | Bullish

Stochastic   Oscillator : 82.2917 | Buy Zone | Negative

Resistance   And Support Levels :

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

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.3728 | Take Profit : 1.3824 | Stop Loss : 1.3664

AUD/USD

Australian Dollar hovers around a major level after gains, US Dollar remains tepid.

Australian Dollar appreciates as the ASX 200 Index continues to gain ground on Thursday.Australia’s Employment Change came in at -6.6K and the Unemployment Rate increased by 3.8% in March.US President Joe Biden calls for tripling the existing 7.5% tariff rate on Chinese steel and aluminum.The decline in the US Treasury yields exerts pressure on the US Dollar.The Australian Dollar (AUD) continues to gain ground for the second consecutive day on Thursday. The decline in the US Dollar (USD) contributes support for the AUD/USD pair. However, the mixed Australian employment data appear to exert downward pressure on the AUD. The Australian Dollar gains momentum as the ASX 200 Index continues to climb on Thursday. The domestic equity market is bolstered by gains in mining stocks, supported by firmer metals prices. Additionally, according to a Westpac report, while the Reserve Bank of Australia (RBA) has indicated that rates are unlikely to be raised further, it requires greater confidence in the inflation outlook before contemplating the possibility of rate cuts.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6482 | Negative Crossover | Bearish
  • MA 20 : 0.6508 | Negative Crossover | Bearish
  • MA 50 : 0.6537 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6505 | Negative Crossover | Bearish
  • MA 20 : 0.6518 | Negative Crossover | Bearish
  • MA 50 : 0.6535 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 42.2794 | Neutral Zone | Neutral

Stochastic   Oscillator : 15.8425 | Sell Zone | Positive

Resistance   And Support Levels :

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

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 0.6456 | Take Profit : 0.6386 | Stop Loss : 0.6511

Elsewhere In The Forex Market

USD/CHF down 0.18% to 0.9091, The NZD/USD up 0.21% to 0.5929. The EUR/GBP down 0.07% at 0.8563. USD/JPY down 0.14% at 154.17. AUD/NZD down 0.07% at 1.0884, The USD/CNY up 0.02% at 7.2381, AUD/SEK down 0.14% at 7.0334, at the time of writing.

Key Economic Events & Data Release Today:

(AUD) Employment Change (Mar) Forecast –7.2K, Previous –116.5K at 07:00. (EUR) EU Leaders Summit at 15:30 (USD) Initial Jobless Claims Forecast 215K, Previous 211K at 18:00 (USD) Existing Home Sales (Mar) Forecast 4.20M, Previous 4.38M at 19:30.