. Daily FX Analysis - ECB's Lagarde, FOMC Shake Forex, USD/CHF Falls, Others Rise

Daily FX Analysis – ECB’s Lagarde, FOMC Shake Forex, USD/CHF Falls, Others Rise

Daily FX Analysis – ECB’s Lagarde, FOMC Shake Forex, USD/CHF Falls, Others Rise

22 Nov 2023

Introduction:

In currency markets, In the currency markets, EUR/USD maintains levels above 1.0900, supported by ECB President Lagarde’s hawkish remarks. Meanwhile, AUD/USD seeks recovery after FOMC minutes, NZD/USD shows resilience, and USD/CHF faces a downturn above 0.8800. Market focus turns to upcoming US economic data on Wednesday.

EUR/USD:

ECB Lagarde’s hawkish remarks caused the EUR/USD pair to remain above 1. 0900.

EUR/USD is making an effort to bounce back from the losses incurred in the prior session, edging slightly higher around 1.0910 in Wednesday’s Asian session. The hawkish remarks made by European Central Bank President Christine Lagarde overnight are offering some backing to the currency pair.

On Tuesday, the EUR/USD experienced a decline following a recent peak of 1.0964, marking a three-month high. This descent is viewed as a corrective move, attributed to the ongoing weakness of the Greenback.

The upcoming significant update from the Eurozone is expected on Thursday with the release of the preliminary November PMIs.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.0918 | Negative Crossover | Bearish
  • MA 20: 1.0864 | Positive Crossover | Bullish
  • MA 50: 1.0773 | Positive Crossover | Bullish

Simple:

  • MA 5: 1.0933 | Negative Crossover | Bearish
  • MA 20: 1.0866 | Positive Crossover | Bullish
  • MA 50: 1.0743| Positive Crossover | Bullish

RSI (Relative Strength Index): 63.06| Buy Zone | Bullish

Stochastic Oscillator: 23.51| Sell Zone | Negative

Resistance And Support Levels:

  • R1: 1.0923| R2: 1.1043
  • S1: 1.0832| S2: 1.0737

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 1.0951 | Take Profit: 1.1043 | Stop Loss: 1.0897

AUD/USD:

AUD/USD tries to regain some of its recent losses post-FOMC minutes.

The AUD/USD is positioned higher near the 0.6560 mark, reclaiming a portion of the losses incurred in the previous trading session. The Australian Dollar retreated from a three-month high as a result of a corrective action by the US Dollar following the release of the FOMC meeting minutes on Tuesday.

The AUD/USD attained new three-month peaks around 0.6600 before reversing direction as the US Dollar regained strength, rebounding from monthly lows. The FOMC meeting minutes revealed no unexpected developments, prompting a shift in focus to upcoming US data.

The US Dollar solidified its advancements after the publication of the FOMC minutes, revealing an absence of unexpected developments.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.6551| Negative Crossover | Bearish
  • MA 20: 0.6507| Positive Crossover | Bullish
  • MA 50: 0.6456 | Positive Crossover | Bullish

Simple:

  • MA 5: 0.6558 | Negative Crossover | Bearish
  • MA 20: 0.6501 | Positive Crossover | Bullish
  • MA 50: 0.6445 | Positive Crossover | Bullish

RSI (Relative Strength Index): 62.69| Buy Zone | Bullish

Stochastic Oscillator: 73.88| Buy zone | Negative

Resistance And Support Levels:

  • R1: 0.6563| R2: 0.6685
  • S1: 0.6461| S2: 0.6351

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.6594| Take Profit: 0.6685 | Stop Loss: 0.6535

NZD/USD:

NZD/USD continues to rise at the mid-0.6000s, with attention on US data.

In early Wednesday trading, NZD/USD is making advances around the mid-0.6000s. FOMC members express ongoing concerns about the potential persistence or escalation of inflation.

During the early Asian session on Wednesday, the NZD/USD pair maintains a positive stance for the fourth consecutive day. The support for NZD/USD is attributed to a softer US Dollar (USD) and declining US Treasury bond yields.

Additionally, the positive momentum of the New Zealand Dollar (NZD) is reinforced by optimistic sentiments regarding the economic outlook of China, a key trading partner.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.6040 | Negative Crossover | Bearish
  • MA 20: 0.6000| Positive Crossover | Bullish
  • MA 50: 0.5955 | Positive Crossover | Bullish

Simple:

  • MA 5: 0.6048 | Negative Crossover | Bearish
  • MA 20: 0.5996 | Positive Crossover | Bullish
  • MA 50: 0.5939| Positive Crossover | Bullish

RSI (Relative Strength Index): 60.05| Buying Zone| Bullish

Stochastic Oscillator: 62.88 |Buying Zone | Negative

Resistance And Support Levels:

  • R1: 0.6044| R2: 0.6161
  • S1: 0.5961 | S2: 0.5866

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.6082 | Take Profit: 0.6161 | Stop Loss: 0.6031

USD/CHF:

USD/CHF is holding a defensive position above 0.8800, with a focus on upcoming US Jobless Claims data.

Under the influence of a weakened USD, USD/CHF is experiencing selling pressure near 0.8830. The FOMC Minutes disclosed unanimous agreement among participants that policy decisions would be determined by the overall assessment of incoming information.

During the Asian session on Wednesday, the USD/CHF pair is seeing a decline. The diminished strength of the US Dollar is pulling the USD/CHF lower to its lowest point since September.

On Wednesday, attention will be directed toward the US weekly Jobless Claims, Durable Goods Orders, and the University of Michigan Consumer Sentiment survey.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.8838 | Negative Crossover | Bearish
  • MA 20: 0.8881| Negative Crossover | Bearish
  • MA 50: 0.8936| Negative Crossover | Bearish

Simple:

  • MA 5: 0.8836 | Positive Crossover | Bullish
  • MA 20: 0.8882| Negative Crossover | Bearish
  • MA 50: 0.8967| Negative Crossover | Bearish

RSI (Relative Strength Index): 31.87| Selling Zone | Bearish

Stochastic Oscillator: 49.66| Buy Zone | Positive

Resistance And Support Levels:

  • R1: 0.8911 | R2: 0.9013
  • S1: 0.8822 | S2: 0.8703

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 0.8784| Take Profit: 0.8703 | Stop Loss: 0.8849.

Elsewhere in the Forex Market

GBP/USD down 0.1% to 1.2536. The USD/CAD down 0.02% to 1.3700. The EUR/GBP up 0.05% at 0.8706. USD/JPY up 0.01% at 148.38, EUR/JPY up 0.09% at 161.97, The USD/CNY up 0.04% at 7.1379, AUD/SEK down 0.06% at 6.8573, at the time of writing.

Key Economic Events & Data Release Today:

(USD) FOMC Meeting Minutes at 00:30.

(USD) Initial Jobless Claims Forecast 225K, Previous 231K at 19:00.

(CAD) Manufacturing Sales (MoM) Previous 0.4% at 19:00.

(USD) Core Durable Goods Order (MoM) (Oct) Forecast 0.1%, Previous 0.5% at 19:00.

(USD) Crude Oil Inventories Forecast 0.900M, Previous 3.592M at 21:00.