. Daily FX Analysis -EUR strong, USD paused, JPY struggles, AUD surges.

Daily FX Analysis – EUR strong, USD paused, JPY struggles, AUD surges.

Daily FX Analysis – EUR strong, USD paused, JPY struggles, AUD surges.

07 Feb 2024

Introduction

EUR/USD holds steady above 1.0750 amidst a weakening US Dollar and market optimism, brushing off mixed German data. Despite a negative start to the week, the pair found stability amid shifting sentiments. Meanwhile, USD/CHF paused after a two-day winning streak, influenced by improved Swiss bond yields. The Japanese Yen struggles against the USD due to hawkish Fed expectations and potential BoJ policy changes. The Australian Dollar gains ground on a weaker US Dollar, fueled by the RBA’s hawkish remarks and Powell’s emphasis on monitoring inflation. Fed speeches remain in focus for further market direction.

Markets In Focus Today – EUR/USD

EUR/USD trades firmer above 1.0750 after German data.

EUR/USD is holding the fort above 1.0750 in European trading on Wednesday. The pair cheers a continued US Dollar pullback and the market’s optimism. The Euro shrugs off mixed German Industrial Production data. Fedspeak is next in focus. Following a negative start to the week, EUR/USD extended that pessimism and kept the trade near recent YTD lows in the 1.0725/20 band on turnaround Tuesday. The pair’s bearish price action was accompanied by a vacillating mood surrounding the greenback against the backdrop of some small corrections in US yields across various maturities.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0807 | Negative Crossover | Bearish
  • MA 20 : 1.0844 | Negative Crossover | Bearish
  • MA 50 : 1.0864 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0811 | Negative Crossover | Bearish
  • MA 20 : 1.0856 | Negative Crossover | Bearish
  • MA 50 : 1.0898 | Negative Crossover | Bearish

RSI (Relative Strength Index): 38.9615 | Sell Zone | Bearish

Stochastic   Oscillator : 15.8181 | Sell Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.0982 R2 : 1.1041
  • S1 : 1.0790 S2 : 1.0731

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 1.0782 | Take Profit: 1.0722 | Stop Loss: 1.0822

USD/CHF

USD/CHF maintains its position below 0.8700 amid a softer US Dollar.

USD/CHF takes a breather after two days of a winning streak. The Swiss Franc could receive support from the improved 10-year Swiss bond yield Dollar made profits on Fed Powell’s rejection of the rate cut in March amid upbeat economic data. USD/CHF trades lower after registering gains for consecutive two days, edging lower to near 0.8700 during the Asian session on Tuesday. The Swiss Franc (CHF) may be receiving support from the improved 10-year Swiss bond yield, standing at 0.93% by the press time. This movement in the bond yield could be influenced by global market sentiment after the recent comments from Federal Reserve Chair Jerome Powell, who indicated that a rate cut in March is premature.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.8658 | Positive Crossover | Bullish
  • MA 20 : 0.8636 | Positive Crossover | Bullish
  • MA 50 : 0.8657 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.8648 | Positive Crossover | Bullish
  • MA 20 : 0.8635 | Positive Crossover | Bullish
  • MA 50 : 0.8616 | Positive Crossover | Bullish

RSI (Relative Strength Index): 58.3623 | Buy Zone | Bullish

Stochastic   Oscillator : 79.3479 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.8705 R2 : 0.8784
  • S1 : 0.8451 S2 : 0.8373

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Stop Buy: 0.8699 | Take Profit: 0.8782 | Stop Loss: 0.8645

USD/JPY

Japanese Yen softens to 148 against USD, BoJ’s hawkish tilt could limit losses.

The Japanese Yen struggles to capitalize on the previous day’s recovery from the YTD trough. Hawkish Fed expectations underpin the USD and further lend support to the USD/JPY pair. Bets for an imminent shift in the BoJ’s policy stance should help limit the downside for the JPY. The Japanese Yen (JPY) attracted fresh sellers on Wednesday and for now, seems to have stalled its modest recovery move against its American counterpart, from the YTD low touched earlier this week. Data from the labor ministry released on Tuesday showed that Japan’s real wages fell for the 21st straight month in December and household spending dropped for a tenth successive month. This is seen as an unwelcome development for the Bank of Japan (BoJ), which, along with a generally positive tone around the equity markets, seems to undermine the safe-haven JPY.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 147.6990 | Positive Crossover | Bullish
  • MA 20 : 147.1295 | Positive Crossover | Bullish
  • MA 50 : 146.4947 | Positive Crossover | Bullish

Simple :

  • MA 10 : 147.6916 | Positive Crossover | Bullish
  • MA 20 : 147.4125 | Positive Crossover | Bullish
  • MA 50 : 145.3049 | Positive Crossover | Bullish

RSI (Relative Strength Index): 56.6518 | Buy Zone | Bullish

Stochastic   Oscillator : 75.1335 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 148.5458 R2 : 150.4342
  • S1 : 142.4322 S2 : 140.5438

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Stop Buy: 148.38 | Take Profit: 149.69 | Stop Loss: 147.62

AUD/USD

Australian Dollar gains ground amid a weaker US Dollar awaits speeches from Fed members.

The Australian Dollar rises as the US Dollar loses ground due to the downbeat US bond yields. Australia’s currency strengthens on hawkish remarks from RBA’s Bullock. Fed’s Powell emphasized closely monitoring inflation’s movement toward the 2% target. The Australian Dollar (AUD) extended its gains for the second consecutive day on a subdued US Dollar (USD), which could be attributed to the decline in the US bond yields. Moreover, the hawkish comments from the Reserve Bank of Australia (RBA) Governor Michele Bullock provided support to strengthening the Aussie Dollar, which in turn, underpinned the AUD/USD pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6547 | Negative Crossover | Bearish
  • MA 20 : 0.6581 | Negative Crossover | Bearish
  • MA 50 : 0.6603 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6554 | Negative Crossover | Bearish
  • MA 20 : 0.6580 | Negative Crossover | Bearish
  • MA 50 : 0.6653 | Negative Crossover | Bearish

RSI (Relative Strength Index): 38.9348 | Sell Zone | Bearish

Stochastic   Oscillator : 27.0994 | Sell Zone | Positive

Resistance   And Support Levels :

  • R1 : 0.6763 R2 : 0.6837
  • S1 : 0.6523 S2 : 0.6449

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 0.6543 | Take Profit: 0.6473 | Stop Loss: 0.6592

Elsewhere In The Forex Market

EUR/GBP down 0.05% to 0.8532. The NZD/USD up 0.11% to 0.6105. The USD/CAD is down 0.09% at 1.3481. GBP/USD up 0.21% at 1.2624. USD/CHF is down 0.49% at 0.6533, The USD/CNY is up 0.01% at 7.1913, and AUD/SEK is down 0.08% at 6.8479, at the time of writing.

Key Economic Events & Data Release Today:

(NZD) Employment Change (QoQ) (Q4) Actual 0.4%, Forecast 0.3%, Previous –0.2% at 03:15. (EUR) German Industrial Production (MoM) (Dec) Actual –1.6%, Forecast –0.4%, Previous –0.7% at 12:30. (USD) Crude Oil Inventories Forecast 1.700M, Previous 1.234M at 21:00.