. Weekly Forex Analysis - ECB Hawkish, Fed Steady, USD Surges.

Weekly Forex Analysis – ECB Hawkish, Fed Steady, USD Surges.

Weekly Forex Analysis – ECB Hawkish, Fed Steady, USD Surges.

08 Jun 2024

Introduction

The foreign exchange market is on edge as central bank decisions loom. The ECB surprised some with a hawkish rate cut, while the Fed is expected to hold steady. The EUR/USD pair struggles for direction, while GBP/USD eyes a breakout. USD/JPY surges on strong US jobs data, dampening hopes for a Fed rate cut. The USD strengthened broadly, pushing the CAD lower.

Markets In Focus Today – EUR/USD

EUR/USD , US inflation and Federal Reserve’s decision take centre stage.

The European Central Bank delivered a hawkish rate cut, hinting at no action until September. The US Federal Reserve will likely stay put when policymakers meet next week. EUR/USD keeps losing upward strength, the bearish case builds up.The EUR/USD pair is finishing a third consecutive week little changed at around 1.0820, and after meeting sellers near 1.0900 for a fourth straight week. Different first-tier events fell short of triggering directional strength around the pair, as investors are still uncertain about what the future may bring. Will central banks act in a timely manner to prevent economic meltdowns, or will moving too soon result in resuming inflationary pressures? One clear thing is that policymakers have already made their bets, and seem willing to stick to them. However, more is needed to shed light on the future.The EUR/USD pair met near-term demand with the statement but held below the 1.0900 threshold as the news were pretty much in line with the market’s expectations.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0850 | Negative Crossover | Bearish
  • MA 20 : 1.0836 | Negative Crossover | Bearish
  • MA 50 : 1.0812 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0853 | Negative Crossover | Bearish
  • MA 20 : 1.0848 | Negative Crossover | Bearish
  • MA 50 : 1.0778 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 46.4885 | Neutral Zone | Neutral

Stochastic   Oscillator : 36.62 | Sell Zone | Negative

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 : 1.0851 | Take Profit : 1.0787 | Stop Loss : 1.0898

GBP/USD

GBP/USD Pound Sterling struggles with 1.2800 for second consecutive week.

The Pound Sterling consolidated at three-month highs near 1.2800 against the US Dollar but failed to hold onto gains.GBP/USD buyers gather pace for the next push higher as the Fed decision looms.The Pound Sterling eyes a weekly close above 1.2800 to extend the bullish momentum.The Pound Sterling (GBP) continued its battle with the 1.2800 level against the US Dollar (USD) this week, as the GBP/USD pair lost momentum after clinching a fresh three-month top near 1.2820.GBP/USD booked the fourth straight weekly gain, courtesy of the downbeat tone around the US Dollar, as markets brought bets for the US Federal Reserve (Fed) interest rates cut in September back on the table.Although traders gear up for the top-tier employment and the monthly Gross Domestic Product (GDP) report from the United Kingdom in the upcoming week, Wednesday’s US Consumer Price Index (CPI) data and Fed policy announcements will likely steal the show.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2749 | Negative Crossover | Bearish
  • MA 20 : 1.2710 | Negative Crossover | Bearish
  • MA 50 : 1.2653 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2758 | Negative Crossover | Bearish
  • MA 20 : 1.2717 | Negative Crossover | Bearish
  • MA 50 : 1.2598 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 43.03 | Neutral Zone | Neutral

Stochastic   Oscillator : 45.66 | Neutral Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Sell : 1.2751 | Take Profit : 1.2679 | Stop Loss : 1.2801

USD/JPY

USD/JPY P Breaks above Kumo, buyers target 157.00.

USD/JPY shoots over half a percent higher following higher-than-expected US payrolls data for May.The data also showed a greater-than-experienced increase in wages although unemployment unexpectedly rose.The data contrasts with Japanese real wages which fell for the 25th straight month in April. USD/JPY spikes higher by over half a percent in the minutes following the release of US Nonfarm Payrolls (NFP) data, on Friday. USD/JPY trades in the upper 156s after the US Dollar (USD) strengthens as a result of the better-than-expected results. USD/JPY climbs above 156.50 as buyers push prices above Ichimoku Cloud.The USD/JPY registered modest gains of 0.66% on Friday after a stronger-than-expected US employment report, which decreased the chances that the US Federal Reserve could ease policy during the year.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 156.2683 | Positive Crossover | Bullish
  • MA 20 : 156.1055 | Positive Crossover | Bullish
  • MA 50 : 154.7860 | Positive Crossover | Bullish

Simple :

  • MA 10 : 156.4972 | Positive Crossover | Bullish
  • MA 20 : 156.3113 | Positive Crossover | Bullish
  • MA 50 : 154.9574 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 55.0140 | Buy Zone | Bullish

Stochastic   Oscillator : 50.0211 | 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 : 156.41 | Take Profit : 157.71 | Stop Loss : 155.73

USD/CAD

The Canadian Dollar saw an increase on a lively Friday, but the Greenback heated up even more following the scorching Non-Farm Payrolls report.

Canadian Dollar tumbles -0.65% against US Dollar on Friday.Canada added more jobs than expected but is eclipsed by US NFP.Bumper job additions and rising wages crimp rate cut hopes.The Canadian Dollar (CAD) gave a mixed performance on Friday, climbing against the majority of its major currency peers but backsliding against the US Dollar (USD). The CAD shed six-tenths of a percent against the Greenback after a bumper US Nonfarm Payrolls (NFP) sent the USD broadly higher as investor hopes for a September rate cut from the Federal Reserve (Fed) wither on the vine.Canada added more jobs than expected in May, but the figure was still well below previous figures, limiting the CAD’s upside momentum. Hourly wages also gained ground in both Canada and the US, while the US Unemployment Rate ticked higher in a cautionary note to Friday’s otherwise clean beat of market forecasts.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.3683 | Positive Crossover | Bullish
  • MA 20 : 1.3674 | Positive Crossover | Bullish
  • MA 50 : 1.3652 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.3672 | Positive Crossover | Bullish
  • MA 20 : 1.3661 | Positive Crossover | Bullish
  • MA 50 : 1.3671 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 60.0313 | Buy Zone | Bullish

Stochastic   Oscillator : 70.0082 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.3740 R2 : 1.3786
  • S1 : 1.3593 S2 : 1.3547

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.3752 | Take Profit : 1.3827 | Stop Loss : 1.3709

Elsewhere In The Forex Market

NZD/USD down 1.57% to 0.6103. The USD/CAD up 0.71% to 1.3766. The USDCHF up 0.79% at 0.8962. EUR/GBP down 0.27% at 0.8489. The USD/CNY up 0.04% at 7.2470, AUD/SEK up 0.11% at 6.9345, CHF/SGD down 0.33% at 1.5082 at the time of writing.

Key Economic Events & Data Release Today:

(JPY) GDP (QoQ) (Q1) (Monday) (GBP) Average Earnings Index + Bonus (Apr) (Tuesday) (GBP) Claimant Count Change (May) (Tuesday) (GBP) Manufacturing Production (MoM) (Apr) (Wednesday) (EUR) German CPI (MoM) (May) (Wednesday) (GBP) GDP (MoM) (Apr) (Wednesday) (GBP) GDP (YoY) (Apr) (Wednesday) (USD) CPI (MoM) (May) (Wednesday) (USD) CPI (YoY) (May) (Wednesday) (USD) Core CPI (MoM) (May) (USD) Fed Interest Rate Decision (Wednesday) (USD) FOMC Statement (Wednesday) (USD) FOMC Press Conference (Thursday) (AUD) Employment Change (May) Thursday)