. Daily FX Analysis - AUD, USD, GBP, NZD Levels

Daily FX Analysis – AUD, USD, GBP, NZD Levels

Daily FX Analysis – AUD, USD, GBP, NZD Levels

07 Nov 2023

Introduction:

The AUD/USD pair remains below a significant level after incurring intraday losses, driven by the Reserve Bank of Australia’s recent interest rate hike. Similarly, GBP/USD is subdued as the USD rebounds from a multi-week low, impacted by a downbeat economic outlook from the Bank of England. Meanwhile, USD/CAD advances beyond 1.3700, influenced by bearish oil prices and a recovering USD. Lastly, NZD/USD nears 0.5950 amidst a strengthening USD and attention turns to China’s Trade Balance data and New Zealand’s Inflation Expectations.

AUD/USD:

AUD/USD hovers below the major level post-intraday losses.

The Australian Dollar continued its decline as the Reserve Bank of Australia (RBA) raised interest rates by 25 basis points. The RBA increased the Official Cash Rate (OCR) from 4.10% to 4.35% following four consecutive meetings where the interest rate remained unchanged.

Despite the Reserve Bank of Australia (RBA) implementing a 25-basis-point interest rate hike on Tuesday, the Australian Dollar (AUD) remains on a downward trend. Additionally, the AUD/USD pair experienced losses due to the strong performance of US Treasury yields, which helped the US Dollar (USD) rebound from its two-month low.

Investors are expected to closely monitor RBA Governor Michele Bullock’s dedication to the recent more aggressive stance, which suggests potential future interest rate increases.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.6459 | Negative Crossover | Bearish
  • MA 20: 0.6427 | Positive Crossover | Bullish
  • MA 50: 0.6392 | Positive Crossover | Bullish

Simple:

  • MA 5: 0.6475 | Negative Crossover | Bearish
  • MA 20: 0.6416 | Positive Crossover | Bullish
  • MA 50: 0.6367| Positive Crossover | Bullish

RSI (Relative Strength Index): 54.15| Buy Zone | Bullish

Stochastic Oscillator: 66.78| Buy Zone | Negative

Resistance And Support Levels:

  • R1: 0.6441| R2: 0.6583
  • S1: 0.6355| S2: 0.6271

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.6491 | Take Profit: 0.6583 | Stop Loss: 0.6430

GBP/USD:

GBP/USD remains depressed below mid-1.2300s as USD recovers further from a multi-week low.

The GBP/USD pair is drifting away from a recent multi-week high, primarily due to a slight increase in the strength of the USD.

The pessimistic economic forecast from the Bank of England (BoE) is also eroding confidence in the GBP and adding to the relatively weak sentiment. Investors are currently focusing on speeches by influential FOMC members before making new strategic decisions.

Hence, attention will stay firmly fixed on addresses given by prominent FOMC members, such as the upcoming appearances of Fed Chair Jerome Powell on both Wednesday and Thursday.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.2332| Negative Crossover | Bearish
  • MA 20: 1.2255| Positive Crossover | Bullish
  • MA 50: 1.2214 | Positive Crossover | Bullish

Simple:

  • MA 5: 1.2352 | Negative Crossover | Bearish
  • MA 20: 1.2225| Positive Crossover | Bullish
  • MA 50: 1.2183 | Positive Crossover | Bullish

RSI (Relative Strength Index): 64.17| Buy Zone | Bullish

Stochastic Oscillator: 72.2| Buy zone | Negative

Resistance And Support Levels:

  • R1: 1.2339| R2: 1.2541
  • S1: 1.2168| S2: 1.1996

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 1.2385| Take Profit: 1.2541 | Stop Loss: 1.2282

USD/CAD:

USD/CAD climbs further beyond 1.3700 amid bearish oil prices and modest USD strength.

The USD/CAD pair is advancing for the second consecutive day, benefiting from a mix of factors. Declining Crude Oil prices weigh down on the Canadian Dollar (Loonie) and provide support as the US Dollar (USD) continues to recover.

However, there’s a possibility that the belief that the Federal Reserve has finished raising interest rates could restrict additional USD and pair gains.

For the second consecutive day on Tuesday, the USD/CAD pair garners buying interest, continuing its solid recovery from the 1.3630-1.3625 range, which marked a nearly three-week low. This upward momentum pushes spot prices beyond the 1.3700 level during the Asian session and is fuelled by a mix of various factors.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.3708 | Positive Crossover | Bullish
  • MA 20: 1.3746| Negative Crossover | Bearish
  • MA 50: 1.3736 | Negative Crossover | Bearish

Simple:

  • MA 5: 1.3691 | Positive Crossover | Bullish
  • MA 20: 1.3780 | Negative Crossover | Bearish
  • MA 50: 1.3744| Negative Crossover | Bearish

RSI (Relative Strength Index): 44.09| Neutral Zone| Neutral

Stochastic Oscillator: 31.83 |Sell Zone | Positive

Resistance And Support Levels:

  • R1: 1.3762| R2: 1.3879
  • S1: 1.3701 | S2: 1.3559

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.3662 | Take Profit: 1.3559 | Stop Loss: 1.3726

NZD/USD:

NZD/USD moves near 0.5950 amid US Dollar rebound, China data eyed.

The NZD/USD pair continues to decline as the US Dollar gains strength, driven by improved US Treasury yields. Gloomy labour data in New Zealand raises concerns that the Reserve Bank of New Zealand (RBNZ) might delay an interest rate hike in the December meeting.

Investors are anticipating China’s Trade Balance and New Zealand’s Inflation Expectations for the fourth quarter.

During Tuesday’s Asian session, the NZD/USD pair is trading below 0.5950, marking its second consecutive session of decline. On Monday, the US Dollar (USD) began to regain ground, fuelled by the boost in US bond yields, reversing its recent losses.

Market participants may monitor the release of China’s October Trade Balance data later in the day.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.5942 | Negative Crossover | Bearish
  • MA 20: 0.5907| Positive Crossover | Bullish
  • MA 50: 0.5890| Positive Crossover | Bullish

Simple:

  • MA 5: 0.5957 | Negative Crossover | Bearish
  • MA 20: 0.5890| Positive Crossover | Bullish
  • MA 50: 0.5865| Positive Crossover | Bullish

RSI (Relative Strength Index): 54.75| Buying Zone | Bullish

Stochastic Oscillator: 70.66| Buy Zone | Negative

Resistance And Support Levels:

  • R1: 0.5928 | R2: 0.6043
  • S1: 0.5851 | S2: 0.5770

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.5959| Take Profit: 0.6043 | Stop Loss: 0.5909.

Elsewhere in the Forex Market

EUR/USD down 0.06% to 0.5992. The USD/JPY up 0.25% to 150.34. The EUR/GBP up 0.1% at 0.8682. USD/CHF up 0.04% at 0.8995, EUR/JPY up 0.15% at 160.98, The USD/CNY up 0.21% at 7.2846, AUD/SEK down 1.01% at 7.0260, at the time of writing.

Key Economic Events & Data Release Today:

(JPY) Household Spending (MoM) (Sep) Actual 0.3%, Forecast –0.4%, Previous 3.9% at 05:00.

(AUD) RBA Interest Rate Decision (Nov) Actual 4.35%, Forecast 4.35%, Previous 4.10% at 09:00.

(AUD) RBA Rate Statement at 09:00.

(EUR) German Industrial Production (MoM) (Sep) Actual –1.4%, Forecast –0.1%, Previous –0.2% at 12:30.

(USD) FOMC Member Williams Speaks at 22:30