. Daily FX Analysis - USD/CAD surges, EUR/USD nears support.

Daily FX Analysis – USD/CAD surges, EUR/USD nears support.

Daily FX Analysis – USD/CAD surges, EUR/USD nears support.

20 Feb 2024

Introduction

In the currency markets, USD/CAD maintains its position above the 1.3500 level ahead of Canada’s CPI data, buoyed by a stronger US Dollar. Meanwhile, EUR/USD retreats from its weekly high, eyeing support at 1.0750, and GBP/USD struggles below 1.2600 ahead of BoE Governor Bailey’s testimony. NZD/USD trades flat amid the PBoC rate decision, influenced by cautious Fed rate cut expectations. The market anticipates potential volatility with upcoming economic data and central bank announcements.

Markets In Focus Today – USD/CAD

USD/CAD holds above the 1.3500 mark ahead of Canadian CPI data.

USD/CAD edges higher to 1.3506 amid the firmer USD. Investors trimmed their bets on rate cut expectations from the Fed as the US January PPI data came in hotter than estimated. Canada’s January CPI report will be released on Tuesday, which is estimated to ease in January. The USD/CAD pair traded on a stronger note above the 1.3500 psychological mark during the Asian session on Tuesday. The uptick of the pair is bolstered by the stronger US Dollar (USD). The Canadian inflation data will be in the spotlight on Tuesday and could trigger volatility in the market ahead of the FOMC Minutes. At press time, USD/CAD is trading at 1.3506, gaining 0.12% on the day.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.3489 | Positive Crossover | Bullish
  • MA 20 : 1.3473 | Positive Crossover | Bullish
  • MA 50 : 1.3467 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.3487 | Positive Crossover | Bullish
  • MA 20 : 1.3471 | Positive Crossover | Bullish
  • MA 50 : 1.3405 | Positive Crossover | Bullish

RSI (Relative Strength Index): 54.5737 | Buy Zone | Bullish

Stochastic   Oscillator : 58.9418 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.3520 R2 : 1.3594
  • S1 : 1.3281 S2 : 1.3207

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 1.3492 | Take Profit: 1.3573 | Stop Loss: 1.3442

EUR/USD

EUR/USD Price Retreats from the weekly high to near 1.0770.

EUR/USD could approach the major support at 1.0750 following February’s low at 1.0694. The resistance zone could be found around the 21-day EMA at 1.0798 and the 23.6% Fibonacci retracement at 1.0799. Traders may await the lagging indicator MACD to confirm a directional trend.EUR/USD retreats from the weekly high of 1.0789, which was recorded on Monday, snapping a four-day winning streak. The pair trades lower around 1.0770 during the Asian hours on Tuesday, positioning above the immediate support at the psychological level of 1.0750.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0772 | Negative Crossover | Bearish
  • MA 20 : 1.0796 | Negative Crossover | Bearish
  • MA 50 : 1.0833 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0763 | Positive Crossover | Bullish
  • MA 20 : 1.0793 | Negative Crossover | Bearish
  • MA 50 : 1.0890 | Negative Crossover | Bearish

RSI (Relative Strength Index): 43.6266 | Neutral Zone | Neutral

Stochastic   Oscillator : 39.5391 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.0982 R2 : 1.1041
  • S1 : 1.0790 S2 : 1.0731

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Stop Sell: 1.0745 | Take Profit: 1.0695 | Stop Loss: 1.0802

GBP/USD

GBP/USD stays below 1.2600 ahead of Bailey’s testimony.

GBP/USD remains on the back foot below 1.2600 in the European session on Tuesday. The US Dollar finds haven demand amid a dour mood. At the same time, the Pound Sterling stays anxious ahead of BoE Governor Bailey’s testimony on the Monetary Policy Report before the UK Parliament. GBP/USD registered losses in the previous week but closed slightly above the key 1.2600 level. At the beginning of the new week, the pair continues to inch higher and the near-term technical outlook points to a bullish tilt. On Wednesday, preliminary February Manufacturing and Services PMI surveys for the UK and the US will be looked upon for fresh impetus. Later in the day, the Federal Reserve will release the minutes of the January policy meeting.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2604 | Negative Crossover | Bearish
  • MA 20 : 1.2626 | Negative Crossover | Bearish
  • MA 50 : 1.2628 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2603 | Negative Crossover | Bearish
  • MA 20 : 1.2638 | Negative Crossover | Bearish
  • MA 50 : 1.2676 | Negative Crossover | Bearish

RSI (Relative Strength Index): 43.3703 | Neutral Zone | Neutral

Stochastic   Oscillator : 29.6443 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.2762 R2 : 1.2806
  • S1 : 1.2617 S2 : 1.2573

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Stop Sell: 1.2577 | Take Profit: 1.2501 | Stop Loss: 1.2636

NZD/USD

NZD/USD trades flat around the mid-0.6100s ahead of the PBoC rate decision.

NZD/USD trades on a flat note near 0.6148 in Tuesday’s early Asian session. The upbeat inflation data has prompted Fed policymakers to ramp up their cautious stance on interest rate cuts this year.RBNZ’s Orr said the central bank must continue to contain inflation expectations, implying that it will not soon cut the rates. The NZD/USD pair trades flat during the early Asian session on Tuesday. The market trades in a quiet session after a US holiday. The People’s Bank of China (PBoC) will announce its decision on interest rates on Tuesday. Meanwhile, some pushback against rate cut expectations from the Federal Reserve (Fed) might lift the Greenback and cap the pair’s upside. At press time, NZD/USD is trading at 0.6148, losing 0.02% on the day.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6119 | Positive Crossover | Bullish
  • MA 20 : 0.6122 | Positive Crossover | Bullish
  • MA 50 : 0.6130 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6115 | Positive Crossover | Bullish
  • MA 20 : 0.6109 | Positive Crossover | Bullish
  • MA 50 : 0.6180 | Negative Crossover | Bearish

RSI (Relative Strength Index): 52.0153 | Buy Zone | Bullish

Stochastic   Oscillator : 75.8404 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.6267 R2 : 0.6329
  • S1 : 0.6066 S2 : 0.6004

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Stop Buy: 0.6154 | Take Profit: 0.6214 | Stop Loss: 0.6120

Elsewhere In The Forex Market

EUR/GBP up 0.04% to 0.8558. The USD/CHF up 0.18% to 0.8835. The AUD/USD down 0.08% at 0.6532. USD/JPY up 0.16% at 150.35. AUD/NZD is up 0.08% at 1.0638, The USD/CNY is up 0.06% at 7.1975, and AUD/SEK is up 0.10% at 6.8067, at the time of writing.

Key Economic Events & Data Release Today:

(GBP) BoE Gov Bailey Speaks at 05:15. (CAD) Core CPI (MoM) (Jan) Previous –0.5% at 08:30. (CAD) CPI (MoM) (Jan) Forecast 0.4%, Previous –0.3% at 08:30. (NZD) PPI Input (QoQ) (Q4) Forecast 0.4%, Previous 1.2% at 16:45.