. Weekly Forex Analysis - EUR/USD Pressured by Data.

Weekly Forex Analysis – EUR/USD Pressured by Data.

Weekly Forex Analysis – EUR/USD Pressured by Data.

29 Jun 2024

Introduction

The outlook for major currencies remains cloudy. The EUR/USD is pressured by the upcoming FOMC minutes and US employment data, potentially falling below 1.0600. GBP/USD awaits direction from the UK election and US jobs report. The USD strengthened on economic data, while the JPY weakened despite government intervention. The AUD gained on dovish Fed expectations.

Markets In Focus Today – EUR/USD

EUR/USD Weekly Forecast: US employment data and FOMC Minutes under the spotlight.

A sour market mood and central banks’ imbalances kept EUR/USD under pressure. The FOMC meeting Minutes and US employment-related figures stand out next week. EUR/USD is at risk of retesting the year’s low at 1.0600 and even falling further. The EUR/USD pair traded lifeless for most of the week around 1.0700, barely reacting on Friday following the release of the United States (US) Personal Consumption Expenditures (PCE) Price Index. The Federal Reserve (Fed) favorite inflation gauge came largely in line with expectations, as the PCE Price Index rate edged lower to 2.6% YoY in May from 2.7% in April, while the monthly reading matched the 0.0% expected, according to the US Bureau of Economic Analysis (BEA). As forecasted, the core annual inflation printed at 2.6%, while the monthly core PCE Price Index rose 0.1%. The US Dollar shed some ground with the news, but losses were limited, and EUR/USD quickly returned to hover around the 1.0700 mark.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0719 | Negative Crossover | Bearish
  • MA 20 : 1.0745 | Negative Crossover | Bearish
  • MA 50 : 1.0772 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0715 | Negative Crossover | Bearish
  • MA 20 : 1.0763 | Negative Crossover | Bearish
  • MA 50 : 1.0775 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 43.9745 | Neutral Zone | Neutral

Stochastic   Oscillator : 16.8082 | 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 : 1.0728 | Take Profit : 1.0668 | Stop Loss : 1.0776

GBP/USD

GBP/USD Weekly Forecast: Pound Sterling looks to UK election for some saving grace.

The Pound Sterling hit six-week lows near 1.2600 against the US Dollar. GBP/USD’s fate hinges on the UK election results and US Nonfarm Payrolls data. Any Pound Sterling recovery is set to be limited so long as the daily RSI stays below 50. The Pound Sterling (GBP) continued to weaken against the US Dollar (USD) for the fourth week in a row, dragging the GBP/USD pair to a six-week low just above 1.2600. All eyes turn to the much-awaited UK general elections on July 4 and the US Nonfarm Payrolls data on July 5 for a fresh directional impetus to GBP/USD. The US Dollar extended its previous week’s strength and exacerbated GBP/USD’s pain. Greenback buyers flexed their muscles on fresh pushback by US Federal Reserve (Fed) policymakers against interest rate cuts this year, especially after the S&P Global preliminary US business activity jumped to a 26-month high on Friday. Data indicated fresh signs of US economic resilience, suggesting that the Fed could hold rates higher for longer.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2669 | Negative Crossover | Bearish
  • MA 20 : 1.2685 | Negative Crossover | Bearish
  • MA 50 : 1.2668 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2670 | Negative Crossover | Bearish
  • MA 20 : 1.2714 | Negative Crossover | Bearish
  • MA 50 : 1.2645 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 44.5019 | Neutral Zone | Neutral

Stochastic   Oscillator : 8.6137 | Sell 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 : 1.2662 | Take Profit : 1.2590 | Stop Loss : 1.2710

USD/JPY

Japanese Yen looks to be fading out this week without any interventions.

The Japanese Yen started Friday with a fresh multi-decade low print.Some quick profit taking is happening ahead of the US session and before the weekend. The US Dollar Index hovers around 106.00 again ahead of PCE inflation release. The Japanese Yen (JPY) sees traders taunting the Japanese government yet again, with another new historic low printed in the Yen’s performance. This Friday 161.27 was briefly hit before falling back to below 161.00. The move comes with Japanese Finance Minister Shun’ichi Suzuki repeated the same message from Thursday that the Japanese cabinet is “watching the FX moves with a high sense of urgency”, which now has lost its impact and sees markets defying the Ministry in order to take action. Meanwhile, the US Dollar Index (DXY) – which gauges the value of the US Dollar against a basket of six foreign currencies – is of course in positive territory on the back of this action. Even if US data on Thursday did not allow the US Dollar to outperform, with Durable Goods flatlining and Pending Home Sales shrinking again for a second month in a row. The Personal Consumption Expenditures numbers falling in line, and in their disinflationary trajectory and are not creating any big waves.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 159.5270 | Positive Crossover | Bullish
  • MA 20 : 158.4980 | Positive Crossover | Bullish
  • MA 50 : 156.6085 | Positive Crossover | Bullish

Simple :

  • MA 10 : 159.3705 | Positive Crossover | Bullish
  • MA 20 : 157.9006 | Positive Crossover | Bullish
  • MA 50 : 156.6688 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 72.5405 | Buy Zone | Bullish

Stochastic   Oscillator : 95.5386 | Buy Zone | Negative

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 : 159.71 | Take Profit : 161.21 | Stop Loss : 158.81

AUD/USD

Australian Dollar benefits from hawkish RBA, soft PCE data from the US.

AUD rose against USD due to US inflation reduction and a potential dovish stance from the Fed.Soft PCE data from the US may benefit the Aussie policy divergence between the RBA and Fed.RBA’s delayed rate cuts could bolster the Aussie, contrasting with other G10 central banks’ reduction strategies.Friday’s session recorded a significant uplift in the Australian Dollar (AUD) against the US Dollar following an unexpected inflation reduction in the US in May. As a result, expectations of a possibly dovish stance from the Federal Reserve (Fed) grew, leading to a likely divergence in policy with the Reserve Bank of Australia (RBA). The Australian economy demonstrates minor signs of weakness. However, the heightened inflation rates maintain a stubborn resilience, preventing the RBA from implementing potential rate cuts. The RBA is foreseen delaying rate cuts, making it one of the last G10 country central banks to adopt a reduction policy. These delayed cuts might enhance the further strengthening of the Aussie.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6649 | Positive Crossover | Bullish
  • MA 20 : 0.6642 | Positive Crossover | Bullish
  • MA 50 : 0.6618 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6649 | Positive Crossover | Bullish
  • MA 20 : 0.6642 | Positive Crossover | Bullish
  • MA 50 : 0.6615 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 55.5136 | Buy Zone | Bullish

Stochastic   Oscillator : 59.3775 | Buy Zone | Positive

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 : 0.6676 | Take Profit : 0.6719 | Stop Loss : 0.6644

Elsewhere In The Forex Market

NZD/USD up 0.15% to 0.6091. The USD/CAD down 0.16% to 1.3679. The USDCHF down 0.06% at 0.8982. EUR/GBP up 0.05% at 0.8472. The USD/CNY up 0.02% at 7.2667, AUD/SEK up 0.09% at 7.0697, CHF/SGD down 0.15% at 1.5090 at the time of writing.

Key Economic Events & Data Release Today:

(EUR) German Manufacturing PMI (Jun) (Monday) (GBP) Manufacturing PMI (Jun) (Monday) (EUR) German CPI (MoM) (Jun) (Monday) (USD) Manufacturing PMI (Jun)(Monday) (EUR) ECB President Lagarde Speaks (Monday) (AUD) RBA Meeting Minutes (Monday) (EUR) CPI (YoY) (Jun) (Tuesday) (USD) Fed Chair Powell Speaks at (Tuesday) (USD) JOLts Job Openings (May) (Tuesday) (GBP) Composite PMI (Jun) (Wednesday) (GBP) Service PMI (Jun) (Wednesday) (USD) ADP Nonfarm Employment Change (Jun) (Wednesday) (USD) Initial Jobless Claims (Wednesday) (USD) ISM Non-Manufacturing PMI (Jun) (Wednesday) (EUR) ECB President Lagarde Speaks (Wednesday)