. Daily FX Analysis - 2024's Fiscal Thrills, Pound, Asia, Aussie, Loonie Rise

Daily FX Analysis – 2024’s Fiscal Thrills, Pound, Asia, Aussie, Loonie Rise

Daily FX Analysis – 2024’s Fiscal Thrills, Pound, Asia, Aussie, Loonie Rise

12 Dec 2023

Introduction

“Welcome to today’s Currency Market Highlights, where we provide insights into the latest movements and developments shaping the forex landscape. In our spotlight today, we explore the stability of the British Pound around the $1.26 mark as traders eagerly anticipate the Bank of England’s policy meeting. Additionally, we delve into the limited activity observed in Asian currency markets, with the U.S. dollar holding steady ahead of key data releases and the Federal Reserve meeting. Join us as we navigate through the technical overviews and trade suggestions for GBP/USD, USD/JPY, and more, shedding light on critical factors influencing these currency pairs. Let’s dive into the world of forex and uncover the dynamics driving today’s market sentiments.”

Markets In Focus Today – GBP/USD

British Pound Hovers at $1.26 as Traders Assess Data and Anticipate BoE Meeting

The British pound has steadied around the $1.26 mark, with investors digesting a range of economic data and eagerly awaiting the Bank of England’s upcoming policy meeting scheduled for Thursday. The latest UK jobs report revealed that total pay growth in Britain slowed more than expected to 7.2% in the three months leading up to October, significantly below the market’s anticipation of 7.7%. Regular pay growth also eased more than forecasted to 7.3%, while the unemployment rate remained unchanged at 4.2%. On the monetary policy front, the UK central bank is expected to maintain interest rates at a 15-year high during its last meeting of 2023. Traders are particularly focused on policymakers’ perspectives regarding growth and inflation, seeking cues about the potential timing for the first rate cut. Market projections suggest the first anticipated cut by the BoE might occur in June, differing from the forecasts of March for the ECB and May for the Federal Reserve.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.26 | Negative Crossover | Bearish
  • MA 20 : 1.25 | Positive Crossover | Bullish
  • MA 50 : 1.25 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.26 | Negative Crossover | Bearish
  • MA 20 : 1.26 | Neutral Crossover | Neutral
  • MA 50 : 1.24 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 55.19 | Neutral Zone | Neutral

Stochastic   Oscillator : 34.48 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.27 R2 : 1.29
  • S1 : 1.22 S2 : 1.21

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.26 | Take Profit : 1.29 | Stop Loss : 1.25

USD/JPY

“Asia FX Markets Show Limited Activity as Dollar Holds Steady Ahead of Key CPI Data and Federal Reserve Developments”

On Tuesday, most Asian currencies maintained a narrow range, while the U.S. dollar stabilized following recent gains. Traders adopted a cautious stance ahead of crucial U.S. inflation data and an upcoming Federal Reserve meeting. Although the dollar index and its futures dipped slightly during Asian trade, the greenback remained above 104 against a basket of currencies. Uncertainty surrounding the Federal Reserve’s plans for interest rate cuts in 2024 attracted some flows into the dollar. The release of consumer price index data later in the day was expected to reveal a slight easing of inflation in November, but traders remained cautious due to the possibility of a stickier reading, especially after better-than-expected nonfarm payrolls data from the previous week.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 146.41 | Negative Crossover | Bearish
  • MA 20 : 147.43 | Negative Crossover | Bearish
  • MA 50 : 148.16 | Negative Crossover | Bearish

Simple :

  • MA 10 : 146.44 | Negative Crossover | Bearish
  • MA 20 : 147.87 | Negative Crossover | Bearish
  • MA 50 : 149.11 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 38.36 | Neutral Zone | Neutral

Stochastic   Oscillator : 47.66 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 150.92 R2 : 152.15
  • S1 : 146.92 S2 : 141.460

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Buy : 146.302 | Take Profit : 141.460 | Stop Loss : 147.200

AUD/USD

“Australian Dollar Rises Following Comments by Governor Bullock”

The Australian dollar advanced, approaching the $0.66 mark, recovering losses from recent sessions. This uptick followed remarks from Reserve Bank of Australia Governor Michele Bullock, who emphasized the central bank’s cautious stance on monetary policy. Bullock stated that the RBA would closely monitor incoming data and asserted that Australia is not lagging behind in the global fight against inflation. While market expectations suggest that the RBA has concluded its tightening measures, there is anticipation of a slower resurgence of inflation to the target level in Australia compared to other major economies. On the economic front, a report revealed that Australian consumer sentiment in 2023 experienced its second-worst year on record, impacted by a surge in the cost of living and elevated interest rates. Additionally, business sentiment declined in November across various industries. Investors are now looking forward to a crucial U.S. inflation reading and interest rate decisions from major central banks scheduled for the current week.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.66 | Positive Crossover | Bullish
  • MA 20 : 0.66 | Positive Crossover | Bullish
  • MA 50 : 0.65 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.66 | Negative Crossover | Bearish
  • MA 20 : 0.66 | Positive Crossover | Bullish
  • MA 50 : 0.65 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 56.04 | Neutral Zone | Neutral

Stochastic   Oscillator : 32.67 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.67 R2 : 0.68
  • S1 : 0.64 S2 : 0.63

Trade Suggestion : Limit Buy : 0.64 | Take Profit : 0.63492 | Stop Loss : 0.66

USD/CAD

“The Canadian Dollar Gains Ground as Investors Assess the Federal Reserve’s Rate Outlook”

The Canadian dollar saw a slight increase against the U.S. dollar on Monday, buoyed by higher oil prices and investor expectations that the Federal Reserve would not raise interest rates in the upcoming meeting. The USDCAD pair traded 0.2% higher at 1.3565, or 73.72 U.S. cents, fluctuating within a range of 1.3551 to 1.3604. Financial markets remained subdued in anticipation of upcoming events, particularly the U.S. consumer price index data scheduled for Tuesday and the Federal Reserve meeting on Wednesday. Both events are crucial in gauging investor sentiment regarding potential interest rate adjustments in the coming year. Economists anticipate the Federal Reserve to maintain current interest rates and potentially begin cutting rates in early to mid-2024, a prospect that tends to weaken the U.S. dollar, according to Darren Richardson, Chief Operating Officer at Richardson International Currency Exchange. Given Canada’s significant role as a commodities producer, particularly in oil, the Canadian dollar often reacts to changes in risk appetite. Although oil prices experienced an uptick, concerns about potential oversupply in crude heading into the next year persisted. U.S. crude prices were up by 0.4% at $71.54 per barrel. Speculators reduced their bearish positions on the Canadian dollar, as indicated by data from the U.S. Commodity Futures Trading Commission. As of December 5, net long positions decreased to 57,848 contracts from 63,242 the previous week. Canadian government bond yields showed an overall increase, with the 10-year yield up 5.1 basis points at 3.426%. This marked an extension of its rebound from a five-month low last Wednesday at 3.264%. The gap between the Canadian 10-year yield and its U.S. counterpart narrowed by 4.7 basis points to 82.8 basis points, favoring the U.S. no

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.36 | Negative Crossover | Bearish
  • MA 20 : 1.36 | Negative Crossover | Bearish
  • MA 50 : 1.36 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.36 | Negative Crossover | Bearish
  • MA 20 : 1.36 | Negative Crossover | Bearish
  • MA 50 : 1.37 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 40.54 | Neutral Zone | Neutral

Stochastic   Oscillator : 33.40 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.38 R2 : 1.39
  • S1 : 1.35 S2 : 1.33

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Buy : 1.35 | Take Profit : 1.33 | Stop Loss : 1.36

Elsewhere In The Forex Market

“The Indian rupee saw a marginal increase on Tuesday, as traders anticipate a limited trading range while awaiting the release of a significant U.S. inflation report and the outcome of the Federal Reserve meeting. As of 10:15 a.m. IST, the rupee stood at 83.3650 against the U.S. dollar, marking a 0.03% rise from its previous closing at 83.3925. While the dollar index remained relatively stable at 103.97, several Asian currencies experienced declines, with the Thai baht leading losses by 0.8%. Amit Pabari, the managing director at the foreign exchange advisory firm CR Forex, noted that the rupee appears to be stuck in an exceptionally narrow trading range, requiring noteworthy events or substantial flows to prompt a reversal. Throughout December, the rupee has fluctuated between 83.2475 and 83.40, and the Reserve Bank of India has reportedly intervened multiple times to curtail losses near the 83.40 mark. With the anticipation of the U.S. inflation data and the Fed’s policy outcome, a forex trader at a private bank mentioned a lack of expectations for significant rupee movement on the day. The U.S. consumer inflation data, expected on Tuesday, is projected to reveal a rise in core CPI to 0.3% month-on-month in November, up from 0.2% in October, according to a Reuters poll. The Fed is expected to maintain unchanged rates on Wednesday, but investors will closely monitor the projections and commentary for insights into future policy rates. Fed futures, as indicated by CME Group’s FedWatch tool, are currently pricing in approximately 125 basis points of rate cuts through 2024. Additionally, India is set to report retail inflation data on Tuesday, with expectations that year-on-year CPI rose to 5.70% in November, up from 4.87% in October, according to a Reuters poll.”

Key Economic Events & Data Release Today:

3:30PM(IST)-EUR-German ZEW Economic Sentiment 7:00PMM(IST-USD-CPI m/m