. Weekly Forex Analysis - EUR/USD Extends Rally, GBP/USD Eyes 1.2900.

Weekly Forex Analysis – EUR/USD Extends Rally, GBP/USD Eyes 1.2900.

Weekly Forex Analysis – EUR/USD Extends Rally, GBP/USD Eyes 1.2900.

06 Jul 2024

Introduction

The US Dollar weakens on expectations of Fed rate cuts, boosting the Euro and Pound. Eurozone data remains mixed, but the Euro could rally further. The Pound eyes US inflation data and a potential break above 1.2900. USD/JPY dips as intervention fears rise. The Australian Dollar surges on US jobs data and potential policy divergence with the Fed.

Markets In Focus Today – EUR/USD

EUR/USD Weekly Forecast Bets for soon-to-come US rate cuts hit the US Dollar.

Building hopes for Federal Reserve rate cuts sent the USD to fresh three-week lows.Eurozone macroeconomic data keeps delivering positive surprises.EUR/USD could extend its rally and turn bullish once it clears the 1.0850 price zone.The EUR/USD pair finally gathered directional strength following a two-week consolidate stage and reconquered the 1.0800 mark, currently trading ahead of the close at around 1.0820 and after hitting 1.0841, its highest in three weeks. Multiple factors put the US Dollar under selling pressure, while Euro buyers were cautiously optimistic.In the Eurozone, macroeconomic data was mixed. On the one hand, the Hamburg Commercial Bank (HCOB) upwardly resided the June Manufacturing and Services PMIs, with the final EU Composite PMI reaching 50.9. Retail Sales in the EU rose a measly 0.1% in May. Next Tuesday, Fed Chairman Jerome Powell is due to testify before the Senate Banking Committee in Washington, DC, as part of the Semi-Annual Monetary Policy Report and his comments on monetary policy may affect financial markets.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0767 | Positive Crossover | Bullish
  • MA 20 : 1.0762 | Positive Crossover | Bullish
  • MA 50 : 1.0774 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0746 | Positive Crossover | Bullish
  • MA 20 : 1.0741 | Positive Crossover | Bullish
  • MA 50 : 1.0784 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 60.1009 | Buy Zone | Bullish

Stochastic   Oscillator : 91.0791 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.0860 R2 : 1.0919
  • S1 : 1.0669 S2 : 1.0610

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.0809 | Take Profit : 1.0870 | Stop Loss : 1.0776

GBP/USD

GBP/USD Weekly Forecast Pound Sterling looks to US CPI and 1.2900 again.

The Pound Sterling extended the previous week’s rebound against the US Dollar.GBP/USD looks forward to the US CPI inflation data for the next push higher.The 1.2900 level and the bullish daily RSI could continue to lure Pound Sterling buyers.The Pound Sterling (GBP) built on the previous week’s rebound against the US Dollar (USD), driving the GBP/USD pair back toward 1.2800, the highest level in nearly three weeks.GBP/USD staged a solid comeback from a six-week trough to reach multi-week highs, mainly due to a steep correction in the US Dollar across its main currency rivals.The Pound Sterling paid little heed to the exit polls and the outcome of the UK 2024 general elections, as it would take some time for markets to assess the implications of a Labour win for the Bank of England’s (BoE) interest-rate cut outlook and domestic currency performance.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2717 | Positive Crossover | Bullish
  • MA 20 : 1.2706 | Positive Crossover | Bullish
  • MA 50 : 1.2680 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2692 | Positive Crossover | Bullish
  • MA 20 : 1.2703 | Positive Crossover | Bullish
  • MA 50 : 1.2673 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 64.0071 | Buy Zone | Bullish

Stochastic   Oscillator : 88.6139 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.2800 R2 : 1.2859
  • S1 : 1.2611 S2 : 1.2552

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.2778 | Take Profit : 1.2849 | Stop Loss : 1.2737

USD/JPY

USD/JPY corrects slightly below 161.00 as Japan’s intervention fears intensify.

USD/JPY falls slightly below 161.00 as the US Dollar is under pressure due to firm Fed rate-cut prospects.Fears of BoJ’s intervention to support the Japanese Yen have intensified.The USD/JPY pair extends its correction to near 161.80 in Friday’s European session. The asset comes under pressure as fears of Japan’s intervention in the FX domain due to one-sided excessive moves, which have led to a sharp weakness in the Japanese Yen and a sheer sell-off in the US Dollar (USD) due to firm speculation that the Federal Reserve (Fed) to begin lowering interest rates from the September meeting. The Japanese Yen struggles to gain ground even though Bank of Japan (BoJ) policymakers have advocated tightening monetary policy further. The weak Japanese Yen has prompted consumer inflation expectations as Japan’s exports have become competitive globally, and import costs have increased significantly.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 160.5858 | Positive Crossover | Bullish
  • MA 20 : 159.5755 | Positive Crossover | Bullish
  • MA 50 : 157.4509 | Positive Crossover | Bullish

Simple :

  • MA 10 : 160.7841 | Negative Crossover | Bearish
  • MA 20 : 159.2528 | Positive Crossover | Bullish
  • MA 50 : 157.2224 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 65.2481 | Buy Zone | Bullish

Stochastic   Oscillator : 82.9843 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 161.4606 R2 : 163.0491
  • S1 : 156.3181 S2 : 154.7296

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 160.28 | Take Profit : 161.66 | Stop Loss : 159.38

AUD/USD

Australian Dollar closes the week strong, at highs since January.

Rising US Unemployment figures had USD facing selling pressure.Australia reported mixed housing data on Friday.Monterey divergences between the Fed and RBA might push the pair up further.The Australian Dollar (AUD) holds its ground against the USD on Friday, which weakened following soft US Nonfarm Payrolls (NFP) figures but stands at its highest level since early January at 0.6740. The Reserve Bank of Australia (RBA) might be one of the final G10 central banks to initiate cuts, which should continue to support the Aussie amid these conditions. Despite signs of a weakening Australian economy, persistent inflation prompts the RBA to remain hawkish, and encouraging Retail Sales data reported earlier in the week depicts a strong economic outlook.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6688 | Positive Crossover | Bullish
  • MA 20 : 0.6667 | Positive Crossover | Bullish
  • MA 50 : 0.6634 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6676 | Positive Crossover | Bullish
  • MA 20 : 0.6656 | Positive Crossover | Bullish
  • MA 50 : 0.6635 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 67.2928 | Buy Zone | Bullish

Stochastic   Oscillator : 90.6593 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.6698 R2 : 0.6728
  • S1 : 0.6600 S2 : 0.6570

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 0.6726 | Take Profit : 0.6842 | Stop Loss : 0.6657

Elsewhere In The Forex Market

NZD/USD up 0.47% to 0.6145. The USD/CAD up 0.21% to 1.3641. The USDCHF down 0.49% at 0.8952. EUR/GBP down 0.18% at 0.8459. The USD/CNY up 0.02% at 7.2680, AUD/SEK up 0.09% at 7.0697, CHF/SGD up 0.24% at 1.5055 at the time of writing.

Key Economic Events & Data Release Today:

(USD) Fed Chair Powell Testifies (Tuesday) (NZD) RBNZ Interest Rate Decision (Tuesday) (NZD) RBNZ Rate Statement (Tuesday) (USD) Fed Chair Powell Testifies (Wednesday) (EUR) German CPI (MoM) (Jun) (Thursday) (GBP) Manufacturing Production (MoM) (May) (Thursday) (GBP) GDP (YoY) (May) (Thursday) (GBP) GDP (MoM) (May) (Thursday)