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Forex Technical Outlook from 24 June 2024 to 28 June 2024

Forex Technical Outlook from 24 June 2024 to 28 June 2024
author Written by
Rex John Walsh
author Fact checked by
Sangram Mohanta

Last Updated on June 29, 2024 by TOP FOREX BROKERS REVIEW

Last week, markets evaluated various economic data, most of which were unappealing. Consumers may finally be experiencing purchasing fatigue, as evidenced by their weak retail sales figures. The housing market update, given in three sections, illustrated a sector still being affected by the escalating interest rates.

Global central banks were also particularly active. The Reserve Bank of Australia (RBA) maintained its policy rate at 4.35% and issued hawkish commentary, while the Bank of England maintained its dovish stance, maintaining rates at their current level. The Swiss National Bank reduced its policy rate by 25 basis points, and Norway’s central bank maintained a hawkish posture.

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Forex Technical Outlook from 24 June 2024 to 28 June 2024

  • Let’s see the list of events to look at this week:
  • BOC Gov Macklem Speaks on Monday
  • CAD CPI on Tuesday
  • US Final GDP q/q on Thursday
  • US Pending Home Sales m/m on Thursday
  • Core PCE Price Index m/m On Friday

EURUSD

The EURUSD currency pair declined to its lowest point in six weeks, reaching a level close to 1.0670. A confluence of circumstances initiated the decrease. To begin with, the Euro was negatively impacted by discouraging economic statistics from the Eurozone. The initial Purchasing Managers' Index (PMI) released by S&P Global has fallen below anticipated levels,

In June, the Composite PMI decreased to 50.8 from its previous level of 52.2, but it nevertheless stayed above the threshold of 50. Significantly, the Manufacturing Purchasing Managers' Index (PMI) experienced a further decline, while the Services PMI exhibited a slower rate of expansion in comparison to the previous month.

Furthermore, the Euro's troubles were exacerbated by political instability in France, a crucial member of the Eurozone. Investors are concerned about the possibility of economic upheaval if Marine Le Pen's National Rally party assumes power following the next legislative elections.

Investors are currently assessing the European Central Bank's (ECB) stance on monetary policy. However, the European Central Bank (ECB) has recently implemented a reduction in interest rates. The ambiguity around future interest rate determinations further intensified the strain on the Euro.

EURUSD

In the daily chart of EURUSD, the recent price shows a decent bearish pressure with no sign of a trend reversal. The 50-day EMA moved down and reached the flat 200-day SMA, suggesting a potential death cross.

As long as the current price trades below the 1.0761 resistance level, we may expect the price to reach the 1.0602 support level. On the other hand, any bullish exhaustion from the 1.0602 to 1.0500 area could be a potential long opportunity.

GBPUSD

The Bank of England (BoE) maintained its interest rate policy, attributing the recent inflation surges to temporary factors. The Pound Sterling (GBP) experienced a decline in value compared to other currencies due to the optimistic perspective articulated in their press release.

According to analysts at ING, the probability of a rate cut at the August meeting has increased to 60%. They emphasize that the BoE's forward guidance remained unaltered, which may have diminished anticipations of an immediate reduction.

Some favorable economic news emerged despite the central bank's decision. Retail sales exceeded expectations in May, providing temporary support for the British pound. Nevertheless, the Pound's overall recovery was restricted by a distinct report that indicated a decrease in the UK's S&P Global/CIPS Composite PMI.

GBPUSD

The GBPUSD price is currently trading in a resistance zone near the dynamic 50-day EMA. The price decline from 1.2815, without attracting significant buying interest, suggests a potential downside correction. The first target could be the 200-day simple moving average.

On the other hand, a reversal above 1.2600 could signal a potential move towards the psychological resistance level of 1.3000. Alternatively, a prolonged correction could see the price target the support level at 1.2445.

AUDUSD

The Australian Dollar (AUD) experienced a further decline compared to other significant currencies. The lackluster preliminary June PMIs from Judo Bank in Australia catalyzed the selling pressure that originated in the Asian markets. The USD was strengthened by the robust PMI data from S&P in the US and high US Treasury yields, which exacerbated the downturn.

The Reserve Bank of Australia (RBA) is delaying potential rate cuts due to persistently high inflation despite the apparent symptoms of weakness in Australia's economic landscape. This could mitigate the Aussie's losses. The RBA is anticipated to be one of the last central banks among the G10 nations to implement rate cuts, which could potentially maintain the Australian dollar's gains.

AUDUSD

In the AUDUSD daily chart, recent price trades within the rectangle pattern suggest a long-term consolidation. As the recent buying pressure is supported by the 50-day EMA and 200-day SMA, any valid bullish reversal from the dynamic level could extend the momentum above the 0.6800 psychological level. 

A stable market above the 0.6714 rectangle resistance could increase the possibility of taking the price above the 0.6839 level.

USDJPY

This week, Japanese markets anticipate two significant events. Initially, the Summary of Opinions, which covers the Bank of Japan's (BoJ) most recent policy meeting, will be published on Monday. Investors anticipate any indications of a potential interest rate increase in July following the BoJ's decision to maintain rates at their current levels last week. Governor Ueda even suggested that a July increase was not entirely unthinkable.

Secondly, the Consumer Price Index (CPI) data for June in Tokyo will be released on Friday. If the reading falls below the BoJ's 2% target, the yen could be further weakened, dampening expectations for a July rate hike. 

Traders will analyze the Summary of Opinions to ascertain the probability of a July movement. If the yen is disappointed again, it may continue to decline.

USDJPY

The daily USDJPY price chart shows a stable bullish trend, with the most recent price supported by the 50-day SMA. Considering the long-term market outlook, the upward continuation is potent, as it may extend the momentum above the 164.00 psychological line. 

On the other hand, any downside correction below the 157.75 level could increase the possibility of joining the bullish rally at a discounted price.

XAUUSD

The Federal Reserve's anticipated interest rate cuts later this year restricted the USD's support, as evidenced by the feeble US economic data released on Thursday. This, in turn, benefits gold, a non-interest-bearing asset.

On Thursday, the Bank of England's dovish posture fueled the gold fire, increasing bets on an August rate cut. This action is consistent with those taken by the European Central Bank (ECB) earlier this month and the Swiss National Bank (SNB) on Thursday. The recent technical breach and coordinated easing by major central banks indicate that gold prices are rising.

Consequently, any declines in gold are anticipated to be transient and perceived as purchasing opportunities, particularly as investors anticipate the release of new economic data from the forthcoming interim global Purchasing Managers' Indexes (PMIs).

XAUUSD

In the XAUUSD daily chart, the potential Head & Shoulders formation is still valid, with the neckline marked at the 2286.74 level. As the recent price remains sideways at the 50-day EMA level, a downside continuation with a daily candle below the neckline support could present a strong bearish opportunity, targeting the 2145.21 support level. 

On the other hand, any bullish rebound from the dynamic support could increase the possibility of reaching the 2439.79 resistance level.

BTCUSD

The German government's deposit of over 1,700 BTC into exchanges, decreasing outflows from US spot ETFs, and on-chain data showing no indications of BTC DeFi liquidation are factors that appear to be driving a slight decline in Bitcoin (BTC) this week. Technical indicators indicate that BTC may undergo a 3% correction shortly before resuming its upward trajectory.

According to data from Lookchain, the German government has deposited 1,700 BTC, valued at $110.88 million, into multiple centralized exchanges this week. If this sell-off continues, FUD in the crypto markets could intensify, further depressing Bitcoin's price. This is even though the German government still retains $3.06 billion in BTC.

BTCUSD

A sideways market is visible in the BTCUSD daily chart, where the current price trades within a falling wedge pattern. Therefore, a valid bullish reversal with a daily candle above the 67389.22 level could be a potential long opportunity, targeting the 80000.00 level.

 

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