. Daily FX Analysis - EUR, GBP, NZD, USD dynamics, trends, and trades.

Daily FX Analysis – EUR, GBP, NZD, USD dynamics, trends, and trades.

Daily FX Analysis – EUR, GBP, NZD, USD dynamics, trends, and trades.

03 Jan 2024

Introduction:

In the forex market update, EUR/USD remains steady near 1.0950, closely monitoring upcoming US ISM data and Federal Reserve Minutes. GBP/USD holds onto gains above 1.2700, while NZD/USD trades above mid-0.6200s, driven by Chinese PMI expectations. USD/CAD, near a one-week peak, awaits momentum from US data and FOMC minutes. Traders focus on key events for potential market shifts.

EUR/USD:

EUR/USD remains stable near 1.0950, keeping a close watch on the upcoming US ISM data and Federal Reserve Minutes.

On the European morning of Wednesday, EUR/USD is experiencing moderate stability around 1.0950. The US Dollar is consolidating its earlier advances during a subdued market sentiment, limiting the potential for upward movement in the currency pair.

On Tuesday, the EUR/USD pair experienced a significant downward movement, reaching a low of 1.0940 and maintaining its proximity to this level until the close of Wall Street. The pair recorded a decline of approximately 90 pips on the initial trading day of 2024, with the US Dollar gaining strength amidst a deteriorating market sentiment. This shift was driven by macroeconomic data revealing ongoing economic contraction after 2023.

Attention is now directed towards influential events, namely the top-tier US ISM PMI and the release of the Fed Minutes, which are expected to provide new momentum.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.0970| Negative Crossover | Bearish
  • MA 20: 1.1027| Negative Crossover | Bearish
  • MA 50: 1.0940 | Positive Crossover | Bullish

Simple:

  • MA 5: 1.0966 | Negative Crossover | Bearish
  • MA 20: 1.1027 | Negative Crossover | Bearish
  • MA 50: 1.0945 | Positive Crossover | Bullish

RSI (Relative Strength Index): 43.01| Neutral Zone | Neutral

Stochastic Oscillator: 6.12| Sell zone | Neutral

Resistance And Support Levels:

  • R1: 1.0992| R2: 1.1135
  • S1: 1.0923| S2: 1.0783

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.0895| Take Profit: 1.0783 | Stop Loss: 1.0980

GBP/USD:

GBP/USD is holding onto its gains above the 1.2700 level, with anticipation for forthcoming US data.

In the early hours of Wednesday in Europe, GBP/USD is recovering above 1.2700, taking advantage of a stable US Dollar. Despite a negative market sentiment, the US Dollar is pausing its earlier upward trend as traders exercise caution in anticipation of crucial US jobs data and the release of the Fed Minutes.

Last week, GBP/USD reached its highest point in five months, surpassing 1.2800. However, it retraced its gains just before the New Year holiday, concluding the week with minimal changes.

Market participants will closely monitor ISM PMI surveys from the US and the December jobs report in the latter part of the week.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.2652| Negative Crossover | Bearish
  • MA 20: 1.2713| Negative Crossover | Bearish
  • MA 50: 1.2668 | Negative Crossover | Bearish

Simple:

  • MA 5: 1.2649 | Negative Crossover | Bearish
  • MA 20: 1.2713 | Negative Crossover | Bearish
  • MA 50: 1.2668| Negative Crossover | Bearish

RSI (Relative Strength Index): 42.04| Neutral Zone | Neutral

Stochastic Oscillator: 6.24| Sell zone | Negative

Resistance And Support Levels:

  • R1: 1.2713| R2: 1.2825
  • S1: 1.2629| S2: 1.2495

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.2612| Take Profit: 1.2495| Stop Loss: 1.2688

NZD/USD:

NZD/USD is trading with strength above the mid-0.6200s in anticipation of the Chinese PMI.

Buyers are showing interest in NZD/USD around the 0.6256 mark, resulting in a 0.08% gain for the day. The Federal Open Market Committee (FOMC) indicated the possibility of approximately three 25 basis points (bps) rate cuts in 2024.

During the early Asian trading hours on Wednesday, the NZD/USD pair is advancing. The revived demand for the US Dollar (USD) is putting some downward pressure on the pair. Currently, NZD/USD is trading around 0.6256, reflecting a 0.08% increase for the day.

Investors will direct their attention to the Chinese Caixin Service data and the US ISM Manufacturing PMI in anticipation of the release of the FOMC Minutes.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.6273 | Negative Crossover | Bearish
  • MA 20: 0.6309| Negative Crossover | Bearish
  • MA 50: 0.6241 | Positive Crossover | Bullish

Simple:

  • MA 5: 0.6273 | Negative Crossover | Bearish
  • MA 20: 0.6309 | Negative Crossover | Bearish
  • MA 50: 0.6241| Positive Crossover | Bullish

RSI (Relative Strength Index): 45.64| Buying Zone| Bullish

Stochastic Oscillator: 10.43 |Selling Zone | Positive

Resistance And Support Levels:

  • R1: 0.6272| R2: 0.6362
  • S1: 0.6205 | S2: 0.6118

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.6289 | Take Profit: 0.6362 | Stop Loss: 0.6244

USD/CAD:

USD/CAD is positioned close to its one-week peak, keeping a lookout for new momentum from US economic data and the release of the FOMC minutes.

USD/CAD continues its upward movement for the fifth consecutive day, finding support from a blend of influences. The Loonie faces pressure due to lower oil prices, while uncertainty regarding early Fed rate cuts favors the USD.

On Wednesday, the USD/CAD pair maintains a positive trend for the fifth consecutive day, hovering around the 1.3330 level, representing a one-week high in the Asian session.

Traders are currently turning their attention to US economic data in search of potential catalysts before the release of the FOMC meeting minutes.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 141.40 | Positive Crossover | Bullish
  • MA 20: 141.92| Positive Crossover | Bullish
  • MA 50: 143.12| Negative Crossover | Bearish

Simple:

  • MA 5: 1.3300 | Positive Crossover | Bullish
  • MA 20: 1.3244| Positive Crossover | Bullish
  • MA 50: 1.3364| Negative Crossover | Bearish

RSI (Relative Strength Index): 57.78| Buy Zone | Bullish

Stochastic Oscillator: 99.75| Buy Zone | Positive

Resistance And Support Levels:

  • R1: 1.3337 | R2: 1.3497
  • S1: 1.3245 | S2: 1.3150

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 1.3364| Take Profit: 1.3497 | Stop Loss: 1.3282.

Elsewhere in the Forex Market

EUR/GBP down 0.01% to 0.8670. The USD/CHF was down 0.04% to 0.8499. The AUD/USD up 0.06% at 0.6764. USD/JPY up 0.03% at 142.02. EUR/JPY is up 0.2% at 155.61, USD/CNY is up 0.02% at 7.1441, and AUD/SEK is down 0.26% at 6.8937, at the time of writing.

Key Economic Events & Data Release Today:

(EUR) German Unemployment Change (Dec) Forecast 20K, Previous 22K at 14:25.

(USD) ISM Manufacturing PMI (Dec) Forecast 47.1, Previous 46.7 at 20:30.

(USD) JOLTs Job Openings (Nov) Forecast 8.850M, Previous 8.733M at 20:30.