. Weekly FX Analysis - currencies clash amid uncertainty.

Weekly FX Analysis – currencies clash amid uncertainty.

Weekly FX Analysis – currencies clash amid uncertainty.

13 Apr 2024

Introduction

EUR/USD plunges to fresh five-month lows near 1.0600 amidst a dovish ECB stance, while the Euro faces pressure from a hawkish Fed. This week marks the pair’s weakest performance in over a year, with limited upside potential anticipated below 1.0725 and 1.0755. The Euro’s recent sharp decline, influenced by the ECB’s dovish tone and the Fed’s hawkish stance, has led to a nearly 2% loss in three days, signaling its worst weekly performance in over a year.

Markets In Focus Today – EUR/USD

EUR/USD dives to fresh five-month lows near 1.0600 on dovish ECB.

The Euro dives on a combination of a dovish ECB and a hawkish FedThe pair is on track to its weakest weekly performance in more than one year.Upside attempts are expected to be limited below 1.0725 and 1.0755.The Euro has been falling like a stone over the last two days, crushed by the combination of a hawkish Federal Reserve and a dovish European Central Bank. The pair has lost nearly 2% in the last three days and is set to close its worst weekly performance in more than one year. The ECB left rates unchanged at the 4% level in a contested decision, as some committee members were in favour of a rate cut. This, and the dovish tilt on the monetary statement has boosted expectations that the bank will start easing its monetary policy soon. Investors have marked June in their calendars.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0771 | Negative Crossover | Bearish
  • MA 20 : 1.0801 | Negative Crossover | Bearish
  • MA 50 : 1.0828 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0784 | Negative Crossover | Bearish
  • MA 20 : 1.0812 | Negative Crossover | Bearish
  • MA 50 : 1.0822 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 29.7591 | Neutral Zone | Neutral

Stochastic   Oscillator : 10.8031 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.0928 R2 : 1.0978
  • S1 : 1.0765 S2 : 1.0715

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 1.0683 | Take Profit : 1.0570 | Stop Loss : 1.0769

GBP/USD

GBP/USD Plummets and shift bearish, dives below 1.2500.

GBP/USD falls sharply, influenced by a move towards safer assets and a strengthening US Dollar.Technical analysis indicates a shift to bearish territory after dropping below the 200-day moving average.Recovery targets include reclaiming 1.2500, with resistance at the 200-day DMA.The British Pound plunged against the US Dollar late in the North American session, down 0.74%, and trades at 1.2445 after hitting a daily high of 1.2559. Risk aversion triggered a flight to safety, a headwind for the Pound Sterling even though UK GDP figures were solid.The market sentiment is downbeat as the Fed is now projected to start reducing interest rates from the September meeting. Also, investors expect that there will be only two rate cuts this year instead of three. There were expectations of six rate cuts at the start of the year.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2582 | Negative Crossover | Bearish
  • MA 20 : 1.2618 | Negative Crossover | Bearish
  • MA 50 : 1.2646 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2593 | Negative Crossover | Bearish
  • MA 20 : 1.2628 | Negative Crossover | Bearish
  • MA 50 : 1.2654 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 32.7743 | Sell Zone | Bearish

Stochastic   Oscillator : 12.4349 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.2819 R2 : 1.2894
  • S1 : 1.2576 S2 : 1.2501

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 1.2482 | Take Profit : 1.2304 | Stop Loss : 1.2603

AUD/USD

AUD/USD Bears await sustained break and acceptance below 0.6500 mark.

AUD/USD meets with a fresh supply on Friday and drops back closer to the weekly low.Weaker Chinese trade data undermine the Aussie amid strong follow-through USD buying.The technical setup favours bearish traders and supports prospects for additional losses.The AUD/USD pair comes under some renewed selling pressure on Friday and extends its steady intraday descent through the early part of the European session. Spot prices touch a fresh daily low following the release of weaker Chinese trade data, albeit manage to hold above the 0.6500 psychological mark and rebound a few pips in the last hour. Any meaningful recovery, however, still seems elusive in the wake of strong follow-through US Dollar (USD) buying, bolstered by expectations that the Federal Reserve (Fed) will keep interest rates higher for longer amid sticky US inflation. Apart from this, persistent geopolitical tensions stemming from conflicts in the Middle East benefit the safe-haven Greenback and might further contribute to capping the risk-sensitive Aussie.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6539 | Negative Crossover | Bearish
  • MA 20 : 0.6545 | Negative Crossover | Bearish
  • MA 50 : 0.6554 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6547 | Negative Crossover | Bearish
  • MA 20 : 0.6543 | Negative Crossover | Bearish
  • MA 50 : 0.6541 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 40.0435 | Neutral Zone | Neutral

Stochastic   Oscillator : 18.5979 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.6628 R2 : 0.6673
  • S1 : 0.6483 S2 : 0.6438

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Stop Sell : 0.6457 | Take Profit : 0.6358 | Stop Loss : 0.6537

USD/JPY

USD/JPY declines after weak US data, buyers take profits.

The UoM Sentiment Index slipped to 77.9, indicating a weakening in US consumer confidence.The US Dollar seems to consolidate weekly gains following hot inflation data.The Greenback will close a 1.60% winning week.The USD/JPY pair, currently trading at 152.95 with a modest loss of 0.17%. Despite a drop in consumer confidence in the US, indicated by the University of Michigan’s (UoM) Consumer Sentiment Index the Greenback will close a winning week, on the back of hot inflation data reported on Wednesday and Thursday. Consumer confidence in the US weakened in early April, with the UoM’s Consumer Sentiment Index edging lower to 77.9 from 79.4 in March. This reading came in below the market expectation of 79. The Current Conditions Index declined to 79.3 from 82.5 and the Consumer Expectations Index fell to 77 from 77.4. The details of the survey also revealed that the one-year inflation outlook climbed to 3.1% from 2.9% in April, while the five-year inflation outlook rose to 3% from 2.8%.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 152.2285 | Positive Crossover | Bullish
  • MA 20 : 151.5421 | Positive Crossover | Bullish
  • MA 50 : 150.2136 | Positive Crossover | Bullish

Simple :

  • MA 10 : 152.0724 | Positive Crossover | Bullish
  • MA 20 : 151.5838 | Positive Crossover | Bullish
  • MA 50 : 150.2671 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 73.3714 | Buy Zone | Bullish

Stochastic   Oscillator : 93.1459 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 152.0153 R2 : 153.3100
  • S1 : 147.8240 S2 : 146.5293

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 151.71 | Take Profit : 153.35 | Stop Loss : 150.68

Elsewhere In The Forex Market

NZD/USD down 1.01% to 0.5936. The USD/CAD up 0.58% to 1.3768. The USDCHF up 0.41% at 0.9137. EUR/GBP down 0.07% at 0.8538. The USD/CNY down 0.00% at 7.2366, AUD/SEK down 0.21% at 6.9951, CHF/SGD up 0.13% at 1.4888 at the time of writing.

Key Economic Events & Data Release Today:

(USD) Retail Sales (MoM) (Mar) (Monday) (USD) Core Retail Sales (MoM) (Mar) (Monday) (CNY) Industrial Production (YoY)(Mar) (Tuesday) (CNY) GDP (YoY) (Q1) (Tuesday) (GBP) Average Earnings Index + Bonus (Feb) (Tuesday) (CAD) Core CPI (MoM) (Mar) (Tuesday) (USD) Building Permits (Tuesday) (NZD) CPI (QoQ) (Q1) (Wednesday) (GBP) CPI (YoY) (Mar) (Wednesday) (EUR) CPI (YoY) (Mar) (Wednesday) (GBP) BoE Gov Bailey Speaks at (Wednesday) (AUD) Employment Change (Mar) (Thursday)