. Daily FX Analysis - EUR up, AUD faces, USD down, NZD reacts.

Daily FX Analysis – EUR up, AUD faces, USD down, NZD reacts.

Daily FX Analysis – EUR up, AUD faces, USD down, NZD reacts.

04 Jan 2024

Introduction:

In the forex market update, the EUR/USD pair strives to recover amidst caution over global growth. Meanwhile, the Australian Dollar faces challenges amid risk aversion, while USD/CHF trends lower despite a robust US Dollar. NZD/USD, influenced by Chinese data, experiences a downtrend, and economic data absence keeps the NZD/USD pair responsive to USD fluctuations.

EUR/USD:

EUR/USD is making an effort to recover from its recent declines and is currently trading in the vicinity of 1. 0920.

During the early European hours on Thursday, EUR/USD is endeavoring to recover from its recent losses and is currently trading close to 1.0920. The pair experienced downward pressure due to the strengthening of the US Dollar, driven by a market inclination towards caution amid apprehensions about global growth at the end of 2024.

For the fourth consecutive session on Wednesday, the bearish sentiment persisted in EUR/USD. This time, the pair experienced a brief decline, reaching the sub-1.0900 zone, driven by a significant upward movement in the US dollar.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.0937| Negative Crossover | Bearish
  • MA 20: 1.1013| Negative Crossover | Bearish
  • MA 50: 1.0949 | Negative Crossover | Bearish

Simple:

  • MA 5: 1.0930 | Negative Crossover | Bearish
  • MA 20: 1.1013 | Negative Crossover | Bearish
  • MA 50: 1.0949 | Positive Crossover | Bullish

RSI (Relative Strength Index): 39.89| Sell Zone | Bearish

Stochastic Oscillator: 4.02| Sell zone | Neutral

Resistance And Support Levels:

  • R1: 1.1007| R2: 1.1116
  • S1: 1.0923| S2: 1.0802

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.0895| Take Profit: 1.0802 | Stop Loss: 1.0964

AUD/USD:

The Australian Dollar is currently at a significant level as it anticipates the release of US employment data.

The Australian Dollar encountered difficulties amid a risk-off sentiment and declining commodity prices. In December, the Australian Services and Composite PMI decreased to 47.1 and 46.9, respectively.

Breaking its losing streak on Thursday, the Australian Dollar (AUD) faces downward pressure against the US Dollar (AUD/USD) amid a risk-off sentiment and a generally bearish session in the commodity complex.

The minutes from the Federal Open Market Committee (FOMC) in December indicate that participants believe the policy rate has either reached or is near its peak in the current tightening cycle.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.6749| Positive Crossover | Bullish
  • MA 20: 0.6798| Negative Crossover | Bearish
  • MA 50: 0.6733 | Positive Crossover | Bullish

Simple:

  • MA 5: 0.6740 | Positive Crossover | Bullish
  • MA 20: 0.6798 | Negative Crossover | Bearish
  • MA 50: 0.6733| Positive Crossover | Bullish

RSI (Relative Strength Index): 47.53| Positive Zone | Bullish

Stochastic Oscillator: 17.52| Sell zone | Positive

Resistance And Support Levels:

  • R1: 0.6767| R2: 0.6900
  • S1: 0.6670| S2: 0.6590

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.6783| Take Profit: 0.6900| Stop Loss: 0.6718

USD/CHF:

The USD/CHF is on a downward trend ahead of US employment data, trading near 0.8480.

Despite a stronger US Dollar, the USD/CHF encounters obstacles, suggesting potential intervention by the Swiss National Bank (SNB) in the foreign exchange market to bolster the Swiss Franc.

For the second consecutive session on Thursday, USD/CHF continues to decline, trading around 0.8480 during the Asian trading hours. The pair faces downward pressure despite the strengthening of the US Dollar (USD), possibly due to intervention in the foreign exchange market by the Swiss National Bank (SNB).

In the upcoming days, the market’s attention will be directed toward Thursday’s labor market data releases, such as ADP Employment Change and Initial Jobless Claims, offering additional insights into the economic landscape.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.8489 | Negative Crossover | Bearish
  • MA 20: 0.8476| Positive Crossover | Bullish
  • MA 50: 0.8594 | Negative Crossover | Bearish

Simple:

  • MA 5: 0.8499 | Negative Crossover | Bearish
  • MA 20: 0.8476 | Positive Crossover | Bullish
  • MA 50: 0.8594| Negative Crossover | Bearish

RSI (Relative Strength Index): 44.4| Neutral Zone| Neutral

Stochastic Oscillator: 82.23 |Buying Zone | Negative

Resistance And Support Levels:

  • R1: 0.8567| R2: 0.8690
  • S1: 0.8476 | S2: 0.8326

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 0.8448 | Take Profit: 0.8326 | Stop Loss: 0.8527

NZD/USD:

Following the release of Chinese Services PMI data, NZD/USD continues its decline below 0. 6250.

NZD/USD faces resistance near 0.6242 as the USD gains strength. China’s Caixin Services PMI exceeded expectations by rising to 52.9 in December from the previous 51.5.

During the early Asian trading hours on Thursday, the NZD/USD pair continued its decline below the mid-0.6200s, supported by the increased strength of the US Dollar (USD).

With no economic data reported from the New Zealand docket, the NZD/USD pair is subject to USD price dynamics. Currently, the pair is trading near 0.6242, registering a 0.04% decline for the day.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.6264 | Positive Crossover | Bullish
  • MA 20: 0.6303| Negative Crossover | Bearish
  • MA 50: 0.6248| Positive Crossover | Bullish

Simple:

  • MA 5: 0.6255 | Positive Crossover | Bullish
  • MA 20: 0.6303| Negative Crossover | Bearish
  • MA 50: 0.6248| Positive Crossover | Bullish

RSI (Relative Strength Index): 49.49| Buy Zone | Bullish

Stochastic Oscillator: 27.91| Buy Zone | Negative

Resistance And Support Levels:

  • R1: 0.6280 | R2: 0.6361
  • S1: 0.6214 | S2: 0.6105

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.6289| Take Profit: 0.6361 | Stop Loss: 0.6248.

Elsewhere in the Forex Market

EUR/GBP down 0.06% to 0.8617. The GBP/USD up 0.17% to 1.2685. The USD/CAD is down 0.24% at 1.3320. USD/JPY up 0.08% at 143.40. EUR/JPY is up 0.18% at 156.75, USD/CNY is up 0.05% at 7.1524, and AUD/SEK is up 0.17% at 6.9357, at the time of writing.

Key Economic Events & Data Release Today:

(USD) FOMC Meeting Minutes at 00:30.

(EUR) German CPI (MoM) (Dec) Forecast 0.1%, Previous –0.4% at 18:30.

(USD) ADP Nonfarm Employment Change (Dec) Forecast 115K, Previous 103K at 18:45.

(USD) Initial Jobless Claims Forecast 216K, Previous 218K at 19:00.

(USD) Crude Oil Inventories Forecast –3.200M, Previous –7.114M at 21:30.