. Daily FX Analysis - GBP/USD hits lows, EUR/NZD pressured, USD/CAD eyes cuts.

Daily FX Analysis – GBP/USD hits lows, EUR/NZD pressured, USD/CAD eyes cuts.

Daily FX Analysis – GBP/USD hits lows, EUR/NZD pressured, USD/CAD eyes cuts.

22 Mar 2024

Introduction

GBP/USD faces downward pressure below 1.2650 post-UK data release. Retail Sales in the UK declined by 0.4% annually in February, prompting investors to await Fed Chairman Powell’s speech. Following the Bank of England’s dovish hold on Thursday, the Pound Sterling tumbled against the US Dollar, hitting a new two-week low at 1.2659, marking a 0.97% decline. Meanwhile, EUR/USD heads towards 1.0800 amidst bleak market sentiment, triggered by the Swiss National Bank’s surprise rate cut. Amidst these developments, USD/CAD hovers above 1.3500 as the Bank of Canada anticipates interest rate cuts this year. Despite mixed data from the US, NZD/USD extends losses to near 0.6020 amid a stronger Greenback, coupled with emerging expectations of a rate cut by the Reserve Bank of New Zealand.

Markets In Focus Today – GBP/USD

GBP/USD stays under pressure below 1.2650 after UK data.

GBP/USD stays on the back foot and trades in negative territory below 1.2650 in the European session on Friday. The data from the UK showed Retail Sales declined by 0.4% every year in February. Investors await Fed Chairman Powell’s speech. The Pound Sterling tumbles sharply against the US Dollar and prints a new two-week low following major central banks’ monetary policy decisions. On Thursday, it was the Bank of England’s (boE) turn to deliver a dovish hold, spurring a U-turn in price action. At the time of writing, the GBP/USD trades at 1.2659, down 0.97%.The Greenback recovered some lost ground following Wednesday’s Federal Open Market Committee (FOMC) policy decision. The FOMC kept rates unchanged and didn’t revise its rate cut expectations for 2024 despite printing back-to-back high inflation reports in the US.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2709 | Negative Crossover | Bearish
  • MA 20 : 1.2711 | Negative Crossover | Bearish
  • MA 50 : 1.2683 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2737 | Negative Crossover | Bearish
  • MA 20 : 1.2723 | Negative Crossover | Bearish
  • MA 50 : 1.2681 | Negative Crossover | Bearish

RSI (Relative Strength Index): 38.4080 | Sell Zone | Bearish

Stochastic   Oscillator : 21.7947 | Sell Zone | Negative

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: 1.2622 | Take Profit: 1.2535 | Stop Loss: 1.2682

EUR/USD

EUR/USD sees a downside to 1.0800 amid dismal market sentiment.

EUR/USD extends its downside to a three-day low of around 1.0840 in the late Asian session on Friday. The major currency pair is expected to witness an appeal for safe-haven assets improve after the Swiss National Bank surprisingly cut interest rates by 25 bps to 1.50% on Thursday. The upward momentum in the Greenback resumed on Thursday, triggering a notable correction to the area beyond the 104.00 barrier for the USD Index (DXY).In a broader macroeconomic context, both the Fed and the European Central Bank (ECB) are expected to embark on their easing cycles, possibly starting in June. However, the pace of subsequent interest rate cuts may vary, leading to potentially divergent strategies between the two central banks. Nevertheless, the ECB is not anticipated to significantly lag behind the Fed.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0875 | Negative Crossover | Bearish
  • MA 20 : 1.0871 | Negative Crossover | Bearish
  • MA 50 : 1.0859 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0891 | Negative Crossover | Bearish
  • MA 20 : 1.0879 | Negative Crossover | Bearish
  • MA 50 : 1.0843 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 42.8345 | Neutral Zone | Neutral

Stochastic   Oscillator : 28.2735 | Sell Zone | Negative

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: 1.0837 | Take Profit: 1.0763 | Stop Loss: 1.0898

USD/CAD

USD/CAD trades on a weaker note above the 1.3500 mark, with eyes on Canadian Retail Sales data.

USD/CAD trades in negative territory around 1.3523 amid the softer USD. The US S&P Global Manufacturing PMI increased to 52.5 in March vs. 52.2 prior, stronger than expected. The Bank of Canada expects to begin cutting interest rates this year, although policymakers vary on the precise timing. The USD/CAD pair traded on a weaker note above the 1.3500 mark during the early Asian trading hours on Friday. The decline of the US Dollar (USD) below the 104.00 mark weighs on the pair. At the press time, USD/CAD is trading at 1.3523, losing 0.05% on the day. The Federal Reserve (Fed) held steady on interest rates at its March meeting on Wednesday and maintained its forecast for three interest rate cuts this year. During a press conference, Fed Chair Jerome Powell noted that a strong jobs market wouldn’t deter the central bank from cutting rates.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.3529 | Positive Crossover | Bullish
  • MA 20 : 1.3520 | Positive Crossover | Bullish
  • MA 50 : 1.3501 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.3520 | Positive Crossover | Bullish
  • MA 20 : 1.3527 | Positive Crossover | Bullish
  • MA 50 : 1.3494 | Positive Crossover | Bullish

RSI (Relative Strength Index): 57.0137 | Buy Zone | Bullish

Stochastic   Oscillator : 57.2760 | Buy Zone | Positive

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: 1.3581 | Take Profit: 1.3654 | Stop Loss: 1.3535

NZD/USD

NZD/USD extends losses to near 0.6020 amid a stronger Greenback.

NZD/USD pair loses ground after mixed PMI data from the United US dollar strengthens despite lower US Treasury yields. New Zealand’s Trade Balance improved to $-11.99 billion.NZD/USD continues to lose ground on the second consecutive session on a stronger US Dollar (USD), which could be attributed to mixed data from the United States (US). The NZD/USD pair inches lower to near 0.6020 during the Asian trading hours on Friday. In February, New Zealand’s Trade Balance improved to $-11.99 billion year-on-year, compared to the previous figure of $-12.62 billion. Both exports and imports witnessed an increase, rebounding from a minor decline observed in January. Exports surged to $5.89 billion from $4.81 billion, while imports rose to $6.11 billion from $5.9 billion. Moreover, there are emerging hopes that the Reserve Bank of New Zealand (RBNZ) might consider cutting its official cash rate this year, rather than waiting until next year, in response to an unexpected recession in Q4 of 2023.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6075 | Negative Crossover | Bearish
  • MA 20 : 0.6099 | Negative Crossover | Bearish
  • MA 50 : 0.6119 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6093 | Negative Crossover | Bearish
  • MA 20 : 0.6110 | Negative Crossover | Bearish
  • MA 50 : 0.6116 | Negative Crossover | Bearish

RSI (Relative Strength Index): 33.0328 | Neutral Zone | Neutral

Stochastic   Oscillator : 10.0225 | Neutral 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: 0.6031 | Take Profit : 0.5963 | Stop Loss: 0.6082

Elsewhere In The Forex Market

AUD/USD down 0.86% to 0.6512, The USD/CHF up 0.33% to 0.9003. The EUR/GBP up 0.08% at 0.8549. USD/JPY down 0.09% at 151.46. AUD/NZD is down 0.14% at 1.0845, The USD/CNY is up 0.39% at 7.2272, and AUD/SEK is down 0.18% at 6.8557, at the time of writing.

Key Economic Events & Data Release Today:

(GBP) Retail Sales (MoM) (Feb) Actual Forecast –0.4%, Previous 3.4% at 12:30. (CAD) Core Retail Sales (MoM) (Jan) Forecast –0.4%, Previous 0.9% at 18:00. (EUR) German Ifo Business Climate Index (Mar) Forecast 85.9, Previous 85.5 at 14:30 (USD) Fed Chair Powell Speaks at 18:30.