Forex Analysis: 12 April 2024 EURUSD EURGBP & Stocks Update

by | Apr 12, 2024 | Forex Analysis

Euro Dollar Notes with text Forex Analysis 12 Apr 2024 - ForexTabs

Forex and Stock Market Analysis

Currency Overview:

Euro Dynamics Post-ECB Decision:

  • The euro weakened against the U.S. dollar and British pound following the European Central Bank’s dovish statements in its April meeting.
  • EUR/USD fell 0.2% to 1.0725, while EUR/GBP dropped 0.3% to 0.8542, slipping below its 50-day moving average.
  • ECB hinted at potential easing measures, spurring expectations for a rate cut as early as June amidst disinflationary pressures.
  • In contrast, firmer monetary policies by the Fed due to robust inflation and labor market data support the U.S. dollar, with the Bank of England poised for more conservative rate cuts starting August.

Technical Analysis:

EUR/USD:

  • After reaching a two-month low, support levels are eyed at 1.0695 with further potential drops to 1.0640 and 1.0450.
  • Resistance could form near the 50-day and 200-day moving averages at 1.0825, with a breakout potentially testing 1.0865.

EUR/GBP:

  • Initial resistance at 0.8585 led to a decline; now trading below the 50-day average.
  • Key support stands at 0.8285, with a break below this level posing significant risks.
  • Resistance hurdles include the 50-day moving average at 0.8550 and a five-month descending trendline at 0.8575.

Stock Market Insights:

Quarterly Performance of Major Banks:

  • Big banks like JPMorgan, Wells Fargo, Citigroup, and Bank of America reported mixed Q1 2024 results—profits increased from the previous quarter but declined year-over-year, marking the first such drop since rate hikes began in Q2 2022.

Challenges and Market Expectations:

  • The banking sector grapples with slower loan demand and rising bad debt provisions, especially in credit card loans, expected to jump by 76%.
  • Despite challenges, stock performance for Citigroup, Wells Fargo, and JPMorgan has been robust, with gains outpacing major indices due to sustained high interest incomes.
  • Goldman Sachs and Morgan Stanley face weaker M&A advisory markets but are potentially bolstering efforts in bond underwriting and IPOs.
  • Regional banks confront more severe conditions due to higher interest rates affecting deposit costs and exposure to troubled commercial real estate loans.
  • Overall, analysts forecast a 4% profit increase for major banks in 2024, while regional and smaller banks might see a 9-10% profit decline.

Cryptocurrency Update:

Bitcoin and Ether Movement:

  • Bitcoin remains stable at $70,564.
  • Ether shows an increase of 1.71%, reaching $3,466.

Keep up to date with the latest trends in forex, stocks, and cryptocurrencies as you navigate significant economic events and market shifts. Dive into detailed analyses and strategic insights at Forextabs.com to inform and enhance your investment strategies.