. Daily FX Analysis - Major currencies falter, USD dominates forex.

Daily FX Analysis – Major currencies falter, USD dominates forex.

Daily FX Analysis – Major currencies falter, USD dominates forex.

19 Mar 2024

Introduction

Amid renewed USD strength, EUR/USD retreated towards 1.0850 in the early European session. The Greenback’s upward bias weighed on riskier assets, holding EUR/USD subdued. Both the Fed and ECB are anticipated to commence easing cycles, with central bank strategies potentially differing. GBP/USD faced selling pressure below 1.2700 ahead of Fed and BoE rate decisions, while USD/JPY extended its rally post-BoJ decision. NZD/USD encountered selling above 0.6050, with a focus on the Fed rate decision and New Zealand’s GDP growth numbers.

Markets In Focus Today – EUR/USD

EUR/USD retreats toward 1.0850 on renewed USD strength.

EUR/USD stays under modest bearish pressure and declined toward 1.0850 in the early European session on Tuesday, pressured by the renewed USD strength. ZEW sentiment survey will be featured in the European economic docket ahead of housing data from the US. Further upward bias in the Greenback weighed on the riskier assets, lending further legs to the US Dollar Index (DXY) and keeping the price action around EUR/USD subdued well below the 1.0900 support. Looking at the broader macroeconomic landscape, both the Federal Reserve (Fed) and the European Central Bank (ECB) are expected to begin their easing cycles, possibly in June. However, the pace of subsequent interest rate cuts may vary, potentially leading to different strategies for both central banks. Nevertheless, the ECB is not expected to significantly lag behind the Fed.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0888 | Negative Crossover | Bearish
  • MA 20 : 1.0873 | Negative Crossover | Bearish
  • MA 50 : 1.0858 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0909 | Negative Crossover | Bearish
  • MA 20 : 1.0872 | Negative Crossover | Bearish
  • MA 50 : 1.0848 | Positive Crossover | Bullish

RSI (Relative Strength Index): 49.7066 | Buy Zone | Bullish

Stochastic   Oscillator : 42.6106 | Neutral Zone | Negative

Resistance   And Support Levels :

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

Overall Sentiment: Neutral Market Direction: Sell

Trade Suggestion: Stop Sell: 1.0856 | Take Profit: 1.0790 | Stop Loss: 1.0913

GBP/USD

GBP/USD attracts some sellers below the mid-1.2700s, with all eyes on the Fed, and BoE rate decision.

GBP/USD remains on the defensive near 1.2726 amid the stronger USD and risk-off mood. Fed is likely to maintain its monetary policy for a fifth straight time at its March meeting. BoE is expected to leave rates unchanged at 5.25% on Thursday, with the expectation of cutting rates in August. The Fed and Bank of England interest rate decisions will be the highlights of this week. The GBP/USD pair remains under some selling pressure during the early Asian session on Tuesday. The uptick in the US Dollar (USD) above 103.50 and higher US yields provide some support to the major pair. Markets turn cautious ahead of the central bank meetings, including the Federal Reserve (Fed) and Bank of England (BoE) interest rate decisions. The Fed is anticipated to keep its interest rate unchanged for a fifth straight time at its March meeting on Wednesday and signal that it still needs further evidence that inflation will return sustainably to its 2% target.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2742 | Negative Crossover | Bearish
  • MA 20 : 1.2724 | Negative Crossover | Bearish
  • MA 50 : 1.2683 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2772 | Negative Crossover | Bearish
  • MA 20 : 1.2719 | Negative Crossover | Bearish
  • MA 50 : 1.2685 | Positive Crossover | Bullish

RSI (Relative Strength Index): 48.9762 | Buy Zone | Bullish

Stochastic   Oscillator : 42.0635 | Neutral Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment: Neutral Market Direction: Sell

Trade Suggestion: Stop Sell: 1.2699 | Take Profit: 1.2607 | Stop Loss: 1.2768

USD/JPY

USD/JPY extends rally beyond 150.00 as markets assess BoJ decisions.

USD/JPY preserves its bullish momentum after breaking above 150.00 with the ‘sell the fact’ reaction to the Bank of Japan’s decision to end negative interest rates. In the post-meeting press conference, Governor Ueda said they will consider options for easing broadly, including ones used in the past if needed. Big Japanese firms have rewarded historic wage growth, and inflation has remained sticky above the desired target of 2%, providing confidence to BoJ policymakers to put an end to the expansionary interest rate stance. Meanwhile, the market sentiment improves on upbeat China’s Retail Sales and Industrial Production data for February.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 148.8937 | Positive Crossover | Bullish
  • MA 20 : 148.9667 | Positive Crossover | Bullish
  • MA 50 : 148.4452 | Positive Crossover | Bullish

Simple :

  • MA 10 : 148.3279 | Positive Crossover | Bullish
  • MA 20 : 149.3476 | Positive Crossover | Bullish
  • MA 50 : 148.6114 | Positive Crossover | Bullish

RSI (Relative Strength Index): 59.1971 | Buy Zone | Bullish

Stochastic   Oscillator : 68.2560 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 150.8153 R2 : 151.9920
  • S1 : 147.0060 S2 : 145.8293

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 149.32 | Take Profit: 150.70 | Stop Loss: 148.51

NZD/USD

NZD/USD faces some selling pressure above 0.6050, with eyes on the Fed rate decision.

NZD/USD edges lower to 0.6053 amid the stronger US Dollar. The Fed Reserve is anticipated to leave rates unchanged for a fifth straight time on Wednesday. The positive headline surrounding the China-New Zealand free trade agreement failed to lift the Kiwi. Fed interest rate decision on Wednesday will be a closely watched event ahead of New Zealand’s GDP Q4 growth numbers. The NZD/USD pair remains under some selling pressure during the early European session on Tuesday. The uptick in the US Dollar Index (DXY) to two-week highs above 103.80 weighs on the NZD/USD pair. Markets are in a cautious mood ahead of the Federal Reserve’s (Fed) monetary policy meeting on Wednesday. The pair currently trades around 0.6053, down 0.53% on the day. Looking ahead, traders will keep an eye on New Zealand’s Westpac Consumer Survey for the first quarter (Q1), due on Wednesday, followed by the Current Account. The Fed interest rate decision and the press conference will be the highlight for this week, On Thursday, the focus will turn to the New Zealand Gross Domestic Product (GDP) for Q4, which is expected to grow 0.1% QoQ.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6110 | Negative Crossover | Bearish
  • MA 20 : 0.6121 | Negative Crossover | Bearish
  • MA 50 : 0.6129 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6130 | Negative Crossover | Bearish
  • MA 20 : 0.6133 | Negative Crossover | Bearish
  • MA 50 : 0.6128 | Negative Crossover | Bearish

RSI (Relative Strength Index): 37.7702 | Sell Zone | Bearish

Stochastic   Oscillator : 6.8172 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.6182 R2 : 0.6224
  • S1 : 0.6044 S2 : 0.6002

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Stop Sell: 0.6047 | Take Profit: 0.5994 | Stop Loss: 0.6090

Elsewhere In The Forex Market

AUD/USD down 0.58% to 0.6520, The USD/CAD up 0.21% to 1.3563. The EUR/GBP up 0.11% at 0.8550. USD/JPY up 0.07% at 150.16. AUD/NZD is down 0.04% at 1.0774, The USD/CNY is up 0.02% at 7.1988, and the AUD/SEK is down 0.32% at 6.8115, at the time of writing.

Key Economic Events & Data Release Today:

(JPY) Industrial Production (MoM) (Jan) Forecast –7.5%, Previous 1.4% at 00:30. (JPY) BoJ Press Conference at 02:00 . (EUR) German ZEW Economic Sentiment (Mar) Forecast 20.6, Previous 19.9 at 06:00. (USD) Building Permits (Feb) Forecast 1.500M, Previous 1.489M at 08:30. (CAD) Core CPI (MoM) (Feb) Previous 0.1% at 08:30. (CNY) PBoC Loan Prime Rate Forecast 3.45%, Previous 3.45% at 21:15.