Technical analysis by forex traders.

[Forex Forum]

May-18, 2022, Daily Currency Trading technical analysis and market forecast, by forex forum.​

GBP/USD jumped in excess of 1.3% on Tuesday, its best performance in nearly 18-months after the UK Jobs Report showed that the labor market remains in rude health. The unemployment rate fell to 3.7%, its lowest level in 50-years, while average earnings including bonuses rose by 7% in March as employers paid more to keep existing staff.

Retail trader data show 69.52% of traders are net-long with the ratio of traders long to short at 2.28 to 1. The number of traders net-long is 12.59% lower than yesterday and 19.96% lower from last week, while the number of traders net-short is 40.21% higher than yesterday and 50.83% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current GBP/USD price trend may soon reverse higher despite the fact traders remain net-long.

Moreover, The pound fell against the dollar on Wednesday after data showed British inflation rising to 9%, the highest level in 40 years.

At 0846 GMT, sterling was down 0.9% against the U.S. dollar at $1.23820.

The drop reverses most of the gains made on Tuesday when the pound touched its highest level since May 5.

Strong labour market data had boosted expectations that the Bank of England would have to further increase interest rates, but the latest inflation numbers are fuelling fears that the threat of recession may temper how far the central bank can go.

"Yesterday it looked like with wage growth rising and unemployment so low it meant that the bank had more room for manoeuvre," said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown

EUR/USD​

On the other hand, The Euro US Dollar exchange rate began the last seven days on a downward trend after German inflation figures came in well below forecast. A widening of the Eurozone trade deficit on Monday may have also contributed to the fall.

The pair’s recovery was aided by a surprisingly hawkish stance from the European Central Bank (ECB). A speech from ECB President Christine Lagarde signalled that a summer 2022 rate hike was likely. Strong GDP growth figures for the Eurozone on Tuesday may also have helped to lift the EUR/USD pair.


Moreover, The European currency is strengthening against the US dollar today. Yesterday preliminary eurozone GDP data for the first quarter was released, exceeding market expectations. The European economy grew by 0.3% in quarterly terms instead of 0.2% and by 5.1% in annual terms instead of the expected 5.0%.

Overall, the European economy showed resilience even despite the negative impact of rising inflation and the Russia-Ukraine crisis, in particular supply chain disruptions and declining business confidence. Also note today’s comments from European Central Bank official Klaas Nota, who said that the regulator may raise interest rates by 50 basis points at once at its July meeting.

In general, the number of supporters of monetary policy tightening within the European regulator continues to grow.

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[Forex Forum]

May-23, 2022, Daily forex trading analysis and currency market forecast, by forex forum.​

The USD/JPY edges lower and records minimal losses of 0.01% in the North American session, courtesy of a positive mood and a weaker greenback. At the time of writing, the USD/JPY is trading at 127.84.

USD/JPY Price Forecast: Technical outlook

The USD/JPY remains neutral-upward biased from a daily chart perspective, albeit approaching April’s 26 swing lows at around 126.94, was unable to break support. Nevertheless, the pair could shift its bias to neutral if USD/JPY bulls fail to break the 20-DMA at 129.23, exposing the major to selling pressure.

The USD/JPY 1-hour chart shows that the pair is trapped between the 50 and 100-hour simple moving averages (SMAs) at 127.98 and 128.19, respectively, but it is upwards. Why? The 20-hour SMA resides below the exchange rate, while the Relative Strength Index (RSI) shifted bullish above the 50-midline. Therefore, the USD/JPY bias is upwards.

USD TECHNICAL ANALYSIS: DXY OUTLOOK IN THE DAYS AHEAD​

On the other hand, The US Dollar Index (DXY) is continuing its recent run of weakness as it pulls back sharply from recent highs. The extremes in bullish sentiment suggested the dollar needed to cool off, and so the recent slide isn’t surprising.

The question is, is whether the USD can reassert its bullish ways quickly, or if it will need some time to digest the run before continuing higher. It’s also possible we are seeing a larger reversal, but at this time that appears to have a lower probability than an eventual trend continuation.

In any event, the DXY is trading around its first level of support via a swing low created on May 5 at 102.35. This is below the trend-line extending higher from the late March low, but even though the trend-line has been broken it doesn’t mean we will necessarily see further weakness.


USD/CAD

Elsewhere, The USDCAD is lower on the day with the price opening at its high and trading down to its low in the North American session. The last 13 or so hours have seen the price trade up and down with a high near 1.2807 and a low at 1.27659.

On the downside, the pair stalled near a lower downward sloping trend line on the hourly chart, AND the 50% midpoint of the move up from the April 21 low. Those levels come in near 1.27668. On the topside, the 100 hour MA is the key resistance today and going forward. That MA comes in at 1.28197.

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[Forex Forum]

May-24, 2022, Daily Currency trading technical and fundamental analysis, by forex forum.​

The Russian rouble strengthened to levels not seen since March 2018 against the dollar on Tuesday, boosted by export-focused companies selling foreign currency to pay taxes and shrugging off a slight easing of capital controls.

The rouble has firmed about 30% against the dollar this year despite a full-scale economic crisis in Russia, making it the world's .

The rouble is steered by capital controls imposed in late February to shield Russia's financial sector after Moscow's decision to send tens of thousands of troops into Ukraine prompted unprecedented Western sanctions.

At 1110 GMT, the rouble was 2.5% stronger against the dollar at 56.36, hovering around this level for the first time in more than four years.

Against the euro, the rouble gained 3% to 58.24, its strongest in seven years.

EUR/GBP​

On the other hand, EUR/GBP: Retail trader data shows 49.92% of traders are net-long with the ratio of traders short to long at 1.00 to 1. In fact, traders have remained net-short since May 16 when EUR/GBP traded near 0.85, price has moved 1.33% higher since then. The number of traders net-long is 12.30% lower than yesterday and 8.89% lower from last week, while the number of traders net-short is 17.92% higher than yesterday and 31.60% higher from last week.


Moreover, The Pound (GBP) is tumbling against its rivals today after poor UK PMI figures this morning added to fears of a 2022 recession in the UK. The reading of the UK’s services PMI fell to 51.8 versus forecasts of 57 as the country’s cost-of-living crisis squeezes household spending.

Samiel Tombs, chief UK economist at Pantheon Macroeconomics, said:

‘The collapse in the composite PMI in May is the clearest sign yet that demand is faltering in response to the intense squeeze on households’ real disposable incomes.’

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Analysts have also highlighted the likelihood that soaring inflation is likely to prompt even worse figures in the coming months.

Concerns that the data could limit further rate hikes from the Bank of England’s (BoE) are also likely weighing on GBP today. Financial markets do still expect the central bank to raise rates to at least 2% by year’s end, however.

At time of writing the GBP/USD exchange rate is at around $1.2507, which is down roughly -0.5% from this morning’s opening figures.

 

[Forex Forum]

May-25, 2022, Daily forex trading analysis and currency exchange forecast, by forex forum.​

EUR/USD corrects lower following a failed attempt to extend the daily range further north of the 1.0750 zone, sparking a subsequent correction of nearly one big figure to the vicinity of 1.0640.

The renewed strength in the dollar sponsored the move lower in spot, which it has also met some help from lower yields on both sides of the ocean.

No news from earlier comments from ECB-speakers, as practically all of them joined the summer rate hike narrative in place in the last couple of weeks.

In the euro calendar, earlier results saw the German GDP Growth Rate expand 3.8% YoY in Q1 and the Consumer Confidence tracked by GfK improve marginally to -26 for the month of June. In France, the Consumer Confidence came in short of expectations in May at 86 (from April’s 87).

Elsewhere, GBP/USD stalls below $1.26​

The weakening dollar has given GBP/USD space to bounce, and since mid-month the pair has been able to move back towards the early May highs at $1.26. But a weaker set of purchasing manager index (PMIs) yesterday meant that the pound ran into some selling pressure, and as a result, the pair has been unable to maintain upward progress, and is now at risk of turning lower.

Fresh declines would bring the May low back into view, down towards $1.22 and potentially lower, with $1.208 the next big level to watch.

JPY/USD

On the other hand, Turning to the economic calendar, the focus will be on April U.S. PCE scheduled for Friday. U.S. markets are closed next Monday for the Memorial Day holiday and traders are starting to leave their desks for the long weekend, so liquidity conditions could deteriorate further in the coming days. Thin liquidity could amplify price volatility if key data surprises relative to expectations. Check out the forum.forex Economical calendar to see what traders expect.

In terms of technical analysis, USD/JPY has bounced off support in the 126.50 zone and seems to be heading towards trendline resistance near 127.40. If price manages to clear this hurdle, bulls could launch an attack on 128.40, the upper boundary of a short-term descending channel. On further strength, the focus shifts higher to 129.75. On the flip side, if sellers return and spark a bearish reversal, initial support spans from 126.50/126.15. If this area is breached on the downside, USD/JPY could be on its way towards the psychological 125.00 level.

US dollar

The U.S. dollar snapped a two-day losing streak on Wednesday ahead of the release of the minutes from the U.S. Federal Reserve's May meeting, which investors will parse for clues about further interest rate hikes.

The minutes are due at 2 p.m. EDT (1800 GMT). U.S. Federal Reserve Chair Jerome Powell has promised to continue hiking rates until there is clear and convincing evidence that inflation is under control.

The U.S. dollar index, which measures the greenback against a basket of peer currencies, was up 0.491% at 102.25, at 10:15 a.m. (1415 GMT).

The dollar had fallen to a one-month low on Tuesday after European Central Bank chief Christine Lagarde flagged an end to negative interest rates in the euro zone in the third quarter.

 

[Forex Forum]

May-26, 2022, Daily Currency market forecast and forex market analysis, By forex forum.​

EUR/USD Rises Amid Improved Market Confidence.

On the euro side of the equation, the ECB is increasingly turning against several months ago. The bank now vouches for a policy acceleration and exits from negative interest rates by the end of the third quarter. This pivot could soon open the door to a 50 bps boost and increase support for European currencies, or at least prevent more depreciation. The stars appear to be ready for the EUR/USD recovery going forward in the summer.

Technical analysis EUR/USD

EUR/USD is approaching its best level since late April. After rising in the past few weeks. with the latest advances Both looked ready to test cluster resistance again. It covers from 1.0750 to 1.0800 if the bull can break through this ceiling to an uptrend. Buying interest may accelerate This paves the way for a move towards 1.0940. Conversely, if sellers recover and prices drop. Initial support will be at 1.0642, followed by 1.0470.

Rouble Analysis​

On the other hand, The Russian rouble slumped around 10% against the dollar in volatile trade to a two-week low on Thursday as the central bank cut interest rates to 11% and suggested more cuts would follow as inflation risks subside.

The central bank cut its key rate by 300 basis points for the third time in a row, softening the cost of borrowing again after an emergency rate hike to 20% in late February days after Russia sent troops into Ukraine.

At a banking conference in Moscow, Governor Elvira Nabiullina said the central bank had prevented an inflation spiral and would lower its 2022 inflation forecast from 18-23%, reiterating the bank's signal that it may cut rates further at its next meeting on June 10.

By 1420 GMT, the rouble was around 10% weaker against the dollar at 65.70 , its weakest since May 12 and tumbling from 55.80, its strongest level since February 2018 which it hit on Wednesday.

It had lost 14% to trade at 69.50 versus the euro, also a two-week low, having touched a seven-year high of 57.10 in the previous session.

USD/JPY

Elsewhere, The Japanese Yen has finally been finding some footing against the US Dollar. Over the past two weeks, USD/JPY declined by over 2 percent. That was the worst 2-week period since June 2020. This has been in stark contrast with general Yen weakness going back all the way to the beginning of 2021. Is this near-term noise, or is more smooth sailing ahead for the Japanese currency?

Against the US Dollar, it is a different fundamental story. Both the US Dollar and Japanese Yen exhibit anti-risk dynamics. The more important focus for USD/JPY is thus on relative monetary policy between the Federal Reserve and the Bank of Japan. The latter has not been doing much in terms of shifting its dovish view, but the markets are starting to reprice what the former could do in the future.

USD/JPY TECHNICAL ANALYSIS

With that in mind, traders ought to treat USD/JPY’s recent breakout with a grain of salt. The pair just barely closed under the April 27th low at 126.952. Moreover, the 50-day Simple Moving Average remains in play and can reorient the pair to the upside. Such an outcome would place the focus on 131.256 resistance. Otherwise, confirming a breakout under the SMA could spell further trouble for USD/JPY. That would place the focus on the former 125.108 – 123.862 resistance zone.

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[Forex Forum]

May-30, 2022, Daily Currency trading analysis and forex market forecast, by forex forum.​

The US dollar is trading sideways today, not helped by the Memorial Day holiday in the US, leaving GBP/USD listless in early turnover. With US markets closed, and with no UK economic data on the slate, today’s session will likely see little volatility or price action.

The UK is also nearing a four-day weekend with the Queen’s Platinum Celebrations commencing this Thursday, leaving the pair vulnerable to US dollar drivers at the end of the week, especially Friday’s US non-farm payroll report.

GBP/USD DAILY PRICE CHART​

Retail trader data show 67.44% of traders are net-long with the ratio of traders long to short at 2.07 to 1. The number of traders net-long is 1.13% higher than yesterday and 7.83% lower from last week, while the number of traders net-short is 4.04% higher than yesterday and 19.77% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current GBP/USD price trend may soon reverse higher despite the fact traders remain net-long.

EUR/USD struggles around the 55-day simple moving average.

On the other hand, EUR/USD’s near 4% rally from its mid-May $1.035 low has so far taken it to a one-month high at $1.077 as US core personal consumption expenditure (PCE) price inflation continues to slow down. The cross seems to be struggling around the 55-day simple moving average (SMA) at $1.077 as US markets are shut due to Memorial Day with quiet trading expected to be seen in currency markets today.

EUR/GBP continues to oscillate around the £0.85 mark

Moreover, EUR/GBP faltered at £0.8587, last week, marginally below the £0.8618 mid-May peak, before it rapidly came off following record low German GfK consumer confidence data. Last week’s low at £0.848 held throughout the week, though, with the cross heading back up again today, following a long Ascension Day holiday weekend in Catholic Europe.

The 16 May high at £0.8534 is back in the picture, a rise above which would lead to the £0.8587 to £0.8618 resistance area being revisited.

USD/JPY

Elsewhere, The USD/JPY pair gained some positive traction on Monday and held on to its modest intraday gains through the first half of the European session. The pair was last seen trading around the 127.25-127.30 area, up 0.15% for the day.

Investors turned optimistic amid hopes that the easing of COVID-19 restrictions in China would boost the global economy, which was evident from the ongoing risk-on rally in the equity markets. This, in turn, undermined demand for the safe-haven Japanese yen and acted as a tailwind for the USD/JPY pair, though the prevalent US dollar selling bias kept a lid on any meaningful gains.

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[Forex Forum]

May-31, 2022, Daily currency trading analysis and forex trading profitable strategy explain, by forex forum.​

The U.S. dollar rose across the board on Tuesday as Treasury yields climbed and worries over a further acceleration in global inflation kept investors' risk appetite at bay.

The dollar was supported by demand for havens. U.S. stocks fell on Tuesday as soaring oil prices and hawkish comments from a Federal Reserve official spooked investors.

The U.S. Dollar Currency Index, which tracks the greenback against six major currencies, was up 0.5% at 101.92, on pace for its best one-day gain in nearly two weeks. The dollar index, up about 6.6% for the year, is down 1.2% for May, on pace for its worst monthly loss in a year.

Inflation in the 19 countries sharing the euro accelerated to 8.1% in May from 7.4% in April, beating expectations for 7.7% as price growth continued to broaden, indicating that it is no longer just energy pulling up the headline figure.

Against the dollar, the euro fell 0.6% to a 5-day low.

USD/CAD

On the other hand, The USD/CAD broke below 1.2650 and fell to 1.2628, reaching a fresh monthly low. The pair resumed the downside despite the Canadian GDP reading coming below expectations and ahead of Wednesday’s Bank of Canada meeting.

The USD/CAD is falling despite the recovery of the US dollar. The DXY is having the best day in almost two weeks as US yields move higher. A deterioration in market sentiment is also helping the greenback. The Dow Joines is falling by 0.78% and the Nasdaq drops by 0.71%.

If USD/CAD rises back above 1.2650 the loonie will likely lose momentum favoring a return to the 1.2685/1.2650 range. Below the daily low, attention would turn to 1.2600. Ahead of the BoC meeting, volatility is set to remain elevated.

EURO AREA INFLATION AT FRESH RECORD HIGH​

Euro Area inflation rose to 8.1% in May, up from 7.5% and above expectations of 7.7%. The core figure also printed above expectations at 3.8% vs 3.5% and thus reaffirms the case for ECB tightening in Q3. Although, the question for the ECB is whether the bank will go ahead with 25 or 50bps in July. Despite money markets pricing in 34bps worth of tightening in July, a 25bps hike remains the base case for me. Alongside this, slower growth remains the risk going forward, which in turn, still supports the bias to fade dips in the US Dollar.

The current recovery in the Euro is around 4% from its recent lows, compared to prior recoveries of 3.3-3.5% in January and March, which signals to me that the current bounce back maybe a bit long in the tooth. While last week’s comments by Fed’s Bostic regarding a potential pause in tightening as soon as September likely exacerbated the USD weakness, the Fed will have little desire to pivot away from its aggressive tightening outlook given inflation remains very sticky at extremely elevated levels.


NZD/USD

Elsewhere, The NZDUSD moved to a new high going back to May 5 in the Asian session. The high price reached 0.65634. That was just short of the May 5 high at 0.65673 (which is also the high for the month of May).

The inability to extend above the May high turned buyers into sellers. The price rotated back to the downside, and after breaking below the swing high from May 25 at 0.65145 , the upward sloping trend line and the rising 100 hour moving average, the sellers took back control and push the price down to a new session low at 0.6482.

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[Forex Forum]

June-01, 2022, Daily latest Currency trading analysis and forex market forecast, by forex forum.​

The EUR/USD broke to the downside after trading for hours in a range between 1.0730-1.0700, dropping precipitously to 1.0650, and hitting its lowest level since May 25. The pair remains under pressure as the US dollar benefits from higher US yields and safe-haven flows due to increased risk aversion.

From a technical perspective, the area between 1.0640/50 provides strong support; below that, the next target stands at 1.0605. If EUR/USD manages to hold above 1.0650, the euro could rebound initially to 1.0700. Above that the next resistance is seen at 1.0735.

US Dollar

On the other hand, The US Dollar just completed its first bearish monthly bar of 2022 trade. The early-portion of the month saw bulls drive up to another fresh high, this time setting a fresh 19-year-high in the currency. But that strength dissipated in the second-half of the month as stocks started to show signs of pulling back.

On a shorter-term basis, support is playing-in from a prior spot of resistance. This plots around a trendline projection from a bullish channel that guided the currency for the better part of a year until the mid-April breakout. This support came into play on Monday and that led to a bounce yesterday which has so far continued through today.

We’re at near-term resistance right now, plotted at 102.35 which is taken from a prior swing-low. Shorter-term support potential remains at both 102.04 and 101.80.

USD/CAD​

Elsewhere, The BoC lifted rates by 0.50%, using as backdrop high global inflation, driven by elevated energy prices, courtesy of the Russian invasion of Ukraine, China’s Covid-19 related lockdowns, and ongoing supply disruptions. The BoC emphasized that the war “increased uncertainty and put further upward pressure on energy and agricultural commodities prices.”

USD/CAD Price Forecast: Technical outlook

The USD/CAD remains downward pressured, but USD/CAD buyers are lifting the pair above the 200-day moving average (DMA), which lies at 1.2659. Nevertheless, it’s worth noting that although they lift the major upwards, aiming towards 1.2700, solid ceiling levels lie ahead around 1.2700.

If the scenario of the USD/CAD reaching 1.2700 is about to play out, the USD/CAD’s first resistance would be the 100-DMA at 1.2695. Break above would send the pair towards the 50-DMA at 1.2708, followed by the May 27 high at 1.2783. On the other hand, the USD/CAD first support would be the 200-DMA. A breach of the latter would expose the Bollinger bottom band at 1.2607.

Moreover, GBP/CAD losses extended to new 2022 lows as the Loonie held a gain of more than one percent gain over the U.S. Dollar for the week to Wednesday.

The decision came with various measures of inflation in Canada ranging from between 3.2% and 6.8% and marks an almost complete withdrawal of the large interest rate cuts that were announced by the BoC during the earliest days of the coronavirus crisis when the cash rate was chopped from 1.75%.

AUD/USD​

The AUDUSD had a volatile up and down month in May, but rebounded into positive territory by the close of the month yesterday.

The 100 day MA loomed above and after a dip in the Asian session today, the price moved higher to test that MA in the early US session. The 100 day MA comes in at 0.72286. The high price today reached 0.7230 just above that level by 1.4 basis points.. Sellers came in and pushed the price back to the downside.

The better US data, led to higher rates, lower stocks and the a higher USD. The AUDUSD fell lower in response, but found support buyers against the lower 100 hour MA at 0.71625. The low price reached 0.71645. The current price is trading at 0.71675.

GBP/USD

The Pound US Dollar (GBP/USD) exchange rate continued to fall today. A robust JOLTS job openings reading as well as an above-forecast uptick to US manufacturing growth helped to push USD even higher. A hawkish stance from the Federal Reserve also likely boosted the US Dollar, as well as a risk-off market mood.

At time of writing the GBP/USD exchange rate is at $1.2468, which is around -1.12% lower than this morning’s opening figures.


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[Forex Forum]

June-02, 2022, Daily currency trading analysis and forex market forecast, by forex forum.​

The U.S. dollar eased across the board on Thursday, ceding some of the ground gained in recent sessions as firmer risk sentiment prompted investors to reach for higher-yielding currencies.

The U.S. dollar currency index, which tracks the greenback against six major currencies, was 0.4% lower at 102.11, on pace to snap a two-day streak of gains.

The dollar found little support from data showing U.S. private payrolls increased far less than expected in May, which would suggest demand for labor was starting to slow amid higher interest rates and tightening financial conditions, though job openings remain extremely high.

EUR/USD​

EUR/USD rebounded on Thursday, though was unable to break back above the 1.0700 level or its 50-Day Moving Average just above it at 1.0723 and has since pulled back to change hands just below 1.0700. The pair is nonetheless still trading with on-the-day gains of about 0.5%, as the US dollar eases across the board amid a pullback from earlier weekly highs in US yields.

But there is a risk that Friday’s US jobs report rekindles some USD strength, if it shows US wage growth picking up once again. Labour market developments that raise the risks of high US inflation becoming embedded (such as rapid wage growth) will encourage the Fed to remove their foot from the monetary accelerator and onto the break at a faster pace. In this scenario, the EUR/USD bears will be eyeing a drop back towards the 21DMA around 1.0600.

GBP/USD

Elsewhere, GBP/USD called back some of yesterday’s downside in the Asian and European sessions after the dollar took its foot off the pedal as U.S. Treasury yields eased.

Currently, the UK economy is under pressure from rampant inflation and slowing manufacturing performance. Despite the uptick in yesterdays housing prices, it is likely that this will inevitably slow as the cost of living weighs on consumers. On the other hand, the U.S. economy is flexing its muscle and reinforcing its robustness in the current global climate via improved manufacturing data.

After finding support at the 61.8% Fibonacci level at 1.2494, GBP/USD price action now flirts with the 20-day EMA (purple). The Relative Strength Index (RSI) reads at the 50 level which is indicative of indecision in terms of upside or downside bias. My forecast remains toward the downside from a fundamental perspective (current) which leads to believe that support at 1.2400 and beyond are around the corner.

USD/CAD​

On the other hand, The USDCAD moved down to retest the low from yesterday at 1.26025. The low price reached 1.26033 and has bounced to 1.2616 currently. Looking at the hourly chart, the low price from Tuesday's trade stalled near 1.2626. Getting above that level would give the short-term buyers some comfort.

The sideways 200 day moving average at 1.26595 would be the next target followed by the falling 100 hour moving average 1.2670. The high price today at 1.2686 tested the high price from Tuesday near the same level.

XAU/USD

Spot gold (XAU/USD) prices rallied more than 1.0% on Thursday from the low $1840s per troy ounce to the upper $1860s and are currently probing late May highs just under $1870. An upside break would open the door, technically speaking to a run higher towards the 50-Day Moving Average, which is close to the $1900 level.

Thursday’s gains come as US yields and the US dollar back off from weekly highs, giving precious metals markets some tailwinds, and despite mixed tier two US labour market data (Q1 Unit Labour Cost was revised higher, May ADP Employment Change missed expectations and weekly jobless claims was decent). But any bullish breakout will likely have to wait until after Friday’s official US jobs report.

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[Forex Forum]

June-03, 2022, Daily currency market technical analysis and forecast, by forex forum.​

The EUR/USD failed to recover the 1.0750 zone and pulled back during Friday’s American session toward the 1.0700 area. It is about to end at the same level it had a week ago after the US dollar recovered strength following NFP and the ISM Service PMI.

Technical outlook

“The EUR/USD pair is trading just below the 50% retracement of its latest slide, measured between 1.1186 and 1.0348 at 1.0770. The weekly chart shows that the pair keeps developing well below all of its moving averages, with the 20 SMA maintaining its bearish slope below the longer ones,” explained Valeria Bednarik, Chief Analysts at FXStreet. She noted the bullish potential remains limited, “although the trend may gather momentum if the pair breaks above the 61.8% retracement at 1.0855. Steady gains above the latter could mean an extension towards the critical 1.1000 figure.”

GBP/USD​

On the other hand, At the Bank of England’s last meeting on the 4th of May, members of the Monetary Policy Committee (MPC) voted 6-3 in favor of a 25 basis point hike with the other 3 in favor of a 50 bps hike. Since then, annual CPI inflation jumped from 7% in March to 9% in April as the harsh consequences of the war in Ukraine exacerbate existing supply chain issues. Russian oil accounts for around 8% of the UK’s oil imports and the island kingdom is committed to phasing this out by the end of the year.

GBP/USD Price Forecast: Technical outlook

The GBP/USD is still downward biased, as reflected by the daily chart. The daily moving averages (DMAs) above the exchange rate, alongside RSI’s readings turning bearish and with a downslope, opens the door for further losses. Nevertheless, if the GBP/USD is about to fall further, a break below the June 1 low at 1.2458 is required. Once cleared, the GBP/USD’s next support would be the May 17 daily low at 1.2313, followed by the YTD low at 1.2155.

USD/CAD​

Elsewhere, The USD/CAD edges up during the New York session, though earlier seesawed between minimal gains/losses of 0.01-0.03%, but remains above the weekly low of 1.2551, amidst investors’ risk-off mood. At 1.2572, the USD/CAD remains steady after the Bank of Canada’s (BoC) 50 bps rate hike earlier in the week.

USD/CAD Price Forecast: Technical outlook

From the daily chart perspective, the USD/CAD remains downward biased, but the RSI’s reading at 36.65, moving slightly up, suggests a correction might occur in the near term. Nevertheless, if the USD/CAD continues downwards and breaks below April’s 21 low at 1.2458, then a retest of the YTD lows at 1.2402 is on the cards.

Otherwise, the USD/CAD might head upwards to test the 1.2600. Failure of a daily close above the figure would keep the major in the 1.2550-1.2600 range.


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