. Weekly Forex Analysis - Dollar Rallies, Major Currency Pairs Decline.

Weekly Forex Analysis – Dollar Rallies, Major Currency Pairs Decline.

Weekly Forex Analysis – Dollar Rallies, Major Currency Pairs Decline.

22 Jun 2024

Introduction

The US Dollar strengthened this week as investors awaited key inflation data and geopolitical tensions flared. EUR/USD fell to near its June low, while GBP/USD tumbled after the Bank of England’s decision. USD/JPY surged on a stronger Dollar and weak Japanese inflation. The Australian Dollar closed lower after disappointing PMI figures.

Markets In Focus Today – EUR/USD

EUR/USD declines below 1.0700 due to divergent Eurozone/US PMI performance.

EUR/USD drops sharply to 1.0670 on divergence in US/Eurozone preliminary PMI performance.ECB’s Klaas Knot sees one or two more rate cuts this year.The US Dollar strengthens amid firm expectations of widening policy divergence between the Fed and other central banks.EUR/USD faces intense selling pressure in Friday’s New York session due to multiple headwinds. The major currency pair declines to a six-week low near 1.0670 as the Euro weakens after downbeat Eurozone’s preliminary PMIs data that suggested the economy is losing momentum. The HCOB PMI report, produced by S&P Global, shows that the Composite PMI unexpectedly declined to 50.8 in June from the prior release of 52.2 but managed to hold above the 50.0 threshold that separates expansion from contraction. Investors expected the Composite PMI to increase to 52.5. The Manufacturing PMI fell further into contraction territory while the Service PMI continued to suggest expansion, although at a slower pace than the previous month.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0742 | Negative Crossover | Bearish
  • MA 20 : 1.0769 | Negative Crossover | Bearish
  • MA 50 : 1.0786 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0737 | Negative Crossover | Bearish
  • MA 20 : 1.0795 | Negative Crossover | Bearish
  • MA 50 : 1.0768 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 38.9643 | Sell Zone | Bearish

Stochastic   Oscillator : 18.1098 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.0890 R2 : 1.0948
  • S1 : 1.0703 S2 : 1.0645

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 1.0712 | Take Profit : 1.0619 | Stop Loss : 1.0781

GBP/USD

GBP/USD ends the week lower as bearish turnaround steepens.

GBP/USD hit fresh lows on Friday as Cable extended declines.Upbeat US PMIs drive off risk appetite, bolster Greenback.GBP traders buckle down for a long wait to next Friday’s GDP.GBP/USD closed Friday at a fresh five-week low of 1.2622, marking the Cable’s third straight down week. The Bank of England’s (BoE) midweek rate hold did little to spark confidence in the GBP, and a late-week upswing in US Purchasing Managers Index (PMI) kicked broad-market risk appetite lower, lifting the US Dollar heading into the trading week’s close. UK Retail Sales lurched higher to 2.9% MoM in May, snubbing the forecast move down to 1.5% from the previous month’s revised -1.8% contraction. UK PMIs also came in mixed, with the S&P Global/CIPS Manufacturing PMI for June rising to 51.4 against the forecast 51.3 and the previous month’s 51.2. The Services PMI contracted sharply to a seven–month low of 51.2, entirely missing the forecast uptick to 53.0 from 52.9.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2702 | Negative Crossover | Bearish
  • MA 20 : 1.2706 | Negative Crossover | Bearish
  • MA 50 : 1.2672 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2714 | Negative Crossover | Bearish
  • MA 20 : 1.2736 | Negative Crossover | Bearish
  • MA 50 : 1.2623 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 43.4632 | Neutral Zone | Neutral

Stochastic   Oscillator : 13.9890 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.2798 R2 : 1.2882
  • S1 : 1.2527 S2 : 1.2443

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Stop Sell : 1.2625 | Take Profit : 1.2529 | Stop Loss : 1.2709

USD/JPY

USD/JPY rallies past 159 on rebound in US Dollar, Japanese disinflation.

USD/JPY rallies to over 159 as US Dollar gains on hawkish Fedspeak and weakening Yen. Slide in Japanese underlying inflation suggests BoJ will not be able to raise rates much to support JPY. USD/JPY reenters intervention territory increasing chances authorities could intervene to push it lower. USD/JPY continues its relentless climb, reaching the 159s on Friday – only one big figure away from the April highs of 160.32, where the Japanese authorities finally stepped in to prevent a further depreciation of their currency. The pair is rallying off the back of a strengthening US Dollar (USD) due to rising US Treasury yields, as Federal Reserve (Fed) officials continue to spout hawkish commentary, playing down any market eagerness to see them cut interest rates any time soon. USD/JPY gets further support from a weakening Japanese Yen (JPY), after the release of Japanese inflation data for May showed a fall in core inflation, and what gains there were, were mostly put down to rises in energy prices.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 157.9529 | Positive Crossover | Bullish
  • MA 20 : 157.2808 | Positive Crossover | Bullish
  • MA 50 : 155.7842 | Positive Crossover | Bullish

Simple :

  • MA 10 : 157.7198 | Positive Crossover | Bullish
  • MA 20 : 157.1064 | Positive Crossover | Bullish
  • MA 50 : 156.0861 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 69.4710 | Buy Zone | Bullish

Stochastic   Oscillator : 96.7438 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 158.0528 R2 : 159.4982
  • S1 : 153.3732 S2 : 151.9278

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 157.66 | Take Profit : 160.40 | Stop Loss : 156.13

AUD/USD

Australian Dollar closes the week with losses on weak PMIs.

Australian Dollar has suffered extended declines in recent sessions as RBA gains slowly fade.PMI figures from Australia reveal weaker-than-expected data.Fragility in the Australian economy seems to be driving demand off the Aussie.In Friday’s session, the Australian Dollar (AUD) intensified its losses against its peers. The AUD/USD duo has been testing its notable support at the 0.6640 threshold, the 20-day Simple Moving Average (SMA). Selling pressure emerged from the Asian markets in light of soft June preliminary PMIs from Judo Bank in Australia. This weakness has been compounded by high US Treasury yields and optimistic PMI data from S&P in the US, lifting the USD. Notwithstanding certain signs of frailty in Australia’s economic scene, the stubbornly high inflation continues to prompt the Reserve Bank of Australia (RBA) to delay potential rate cuts, potentially offsetting the Aussie’s losses. The RBA is primed to be among the last G10 nation central banks to initiate rate cuts, which might perpetuate the Aussie’s gains.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6641 | Negative Crossover | Bearish
  • MA 20 : 0.6636 | Positive Crossover | Bullish
  • MA 50 : 0.6611 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6635 | Positive Crossover | Bullish
  • MA 20 : 0.6639 | Negative Crossover | Bearish
  • MA 50 : 0.6592 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 51.4040 | Buy Zone | Bullish

Stochastic   Oscillator : 61.0244 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.6706 R2 : 0.6764
  • S1 : 0.6515 S2 : 0.6457

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 0.6624 | Take Profit : 0.6697 | Stop Loss : 0.6579

Elsewhere In The Forex Market

NZD/USD down 0.03% to 0.6118. The USD/CAD up 0.03% to 1.3693. The USDCHF up 0.3% at 0.8940. EUR/GBP up 0.02% at 0.8457. The USD/CNY up 0.01% at 7.2609, AUD/SEK up 0.11% at 6.9345, CHF/SGD down 0.28% at 1.5150 at the time of writing.

Key Economic Events & Data Release Today:

(EUR) German Ifo Business Climate Index (Jun) (Monday) (CAD) Core CPI (MoM) (May) (Tuesday) (USD) CB Consumer Confidence (Jun) (Tuesday) (USD) Building Permits (Wednesday) (USD) New Home Sales (MoM) (May) (Wednesday) (USD) Crude Oil Inventories (Wednesday) (GBP) BoE Gov Bailey Speaks (Thursday)