**Weekly Forex Analysis: EUR/USD, GBP/USD, AUD/USD and More**
*Adapted and expanded from the original FXStreet article by Dhwani Mehta, with additional insights included for comprehensive coverage.*
—
The foreign exchange market continued its volatile trajectory as we step deeper into June 2024. Multiple factors ranging from economic data releases, central bank policy speculation, and global risk sentiment are influencing the major currency pairs. This analysis covers key pairs like EUR/USD, GBP/USD, AUD/USD, USD/JPY, and examines the forces at play that are shaping their movements. Additionally, we look into forecasts, market sentiment, and technical setups for traders to consider in the week ahead.
## Market Context Overview
FX markets found themselves at the cusp of a pivotal period as central banks signal diverging policy stances. While the Federal Reserve remains largely data-driven and cautious toward rate cuts, the European Central Bank and others have displayed openness toward monetary easing. This divergence is stirring volatility in G10 currencies.
### Key Drivers Impacting Forex Markets
– **US Economic Data**: Important indicators like nonfarm payrolls, inflation prints, and retail sales continue to be central as traders adjust Fed rate cut expectations.
– **Central Bank Meetings**: Decisions and forward guidance from the Fed, ECB, and other major central banks are shaping monetary policy divergence.
– **Geopolitical Risks**: Ongoing tensions in Eastern Europe and shifts in global trade sentiment affect risk appetite and safe-haven demand.
– **Commodities Fluctuations**: Movements in crude oil and base metal prices have a direct effect on commodity-linked currencies such as AUD and CAD.
## EUR/USD: Sluggish Momentum Despite ECB Dovishness
The euro started the week trading in consolidation against the dollar, following the European Central Bank’s recent policy meeting. The ECB cut rates by 25 basis points as was widely expected, marking the first rate cut since 2019. However, cautious language and revised economic forecasts limited any significant follow-through gains in the euro.
#### Technical Picture
– **Resistance Levels**: 1.0900 (psychological level), followed by 1.1000
– **Support Levels**: 1.0800, then 1.0750
– **Indicators**: The pair hovers near its 200-day simple moving average, with RSI pointing to neutral/bearish territory.
– **Chart Pattern**: The euro remains entrenched within a broad sideways channel, failing to claim new highs and vulnerable to dollar strength.
#### Fundamental Backdrop
– **EU Growth Concerns**: Disappointing Eurozone GDP and inflation data continue to weigh on bullish prospects.
– **ECB Guidance**: While the ECB opened the door to further loosening, policymakers remain data-dependent, limiting aggressive euro selling.
#### Outlook
– Market participants are likely to focus on US CPI and retail sales data this week. A renewed bid for the US dollar could test
Read more on AUD/USD trading.