. Daily FX Analysis - EUR/USD, GBP/USD, USD/JPY.

Daily FX Analysis – EUR/USD, GBP/USD, USD/JPY.

Daily FX Analysis – EUR/USD, GBP/USD, USD/JPY.

07 Mar 2024

Introduction

EUR/USD holds firm around 1.0900 in the Asian session, retracing slightly from its six-week peak of 1.0915 after dovish comments by Fed Chair Jerome Powell. The pair breached the crucial 1.0900 level, reaching multi-week highs amid increased selling pressure on the US Dollar. Meanwhile, GBP/USD maintains strength below 1.2750, buoyed by a weakened US Dollar and positive news from the UK Spring Budget. Japanese Yen rallies to 148.00 against USD as Bank of Japan officials raise rate hike expectations, while USD/CHF hovers above 0.8800, influenced by speculation of a Fed rate cut in June.

Markets In Focus Today – EUR/USD

EUR/USD holds steady near 1.0900 ahead of the ECB interest rate decision.

EUR/USD remains steady around 1.0900 during the Asian session on Thursday, retracing slightly from its six-week high of 1.0915 reached in the prior session following dovish remarks by Fed Chair Jerome Powell during his testimony before the House Financial Services Committee. Finally, EUR/USD managed to surpass the key 1.0900 barrier, advancing to multi-week tops on the back of heightened selling pressure hurting the US Dollar, particularly after discouraging prints from the ADP report and the lack of surprises from Fed Powell’s testimony. Meanwhile, the USD Index (DXY) retreated for the fourth session in a row, this time hovering over five-week lows in the low-103.00s and accompanied by further losses in US yields, always against the backdrop of steady speculation of a Fed’s rate cut in June.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0854 | Positive Crossover | Bullish
  • MA 20 : 1.0837 | Positive Crossover | Bullish
  • MA 50 : 1.0840 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0850 | Positive Crossover | Bullish
  • MA 20 : 1.0813 | Positive Crossover | Bullish
  • MA 50 : 1.0857 | Positive Crossover | Bullish

RSI (Relative Strength Index): 62.2448 | Buy Zone | Bullish

Stochastic   Oscillator : 87.0188 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.0876 R2 : 1.0924
  • S1 : 1.0722 S2 : 1.0674

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Stop Buy: 1.0909 | Take Profit: 1.0985 | Stop Loss: 1.0866

GBP/USD

GBP/USD trades on a stronger note below 1.2750 on a weaker US Dollar, UK’s budget.

GBP/USD trades in positive territory for the fifth consecutive day near 1.2735 on Thursday. Fed’s Chair Powell said rate cuts are likely at some point this year. The US weekly Initial Jobless Claims and Trade Balance will be released on Thursday. The GBP/USD pair breaks above the 1.2700 barrier and currently trades around 1.2735 during the early Asian session on Thursday. The uptick of the major pair is bolstered by the weaker US Dollar (USD) and encouraging news from the UK Spring Budget. The Federal Reserve (Fed) Chair Jerome Powell told House lawmakers on Wednesday that interest rates might start coming down this year, but also cautioned that the Fed would take its time until the central bank gains greater confidence that inflation is moving sustainably toward the 2% target. Powell’s comment indicated that the Fed officials remain cautious about not losing the progress made against inflation, and the decision-making will be based on incoming data.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2687 | Positive Crossover | Bullish
  • MA 20 : 1.2669 | Positive Crossover | Bullish
  • MA 50 : 1.2649 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2684 | Positive Crossover | Bullish
  • MA 20 : 1.2648 | Positive Crossover | Bullish
  • MA 50 : 1.2671 | Positive Crossover | Bullish

RSI (Relative Strength Index): 61.9229 | Buy Zone | Bullish

Stochastic   Oscillator : 85.4288 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.2735 R2 : 1.2794
  • S1 : 1.2541 S2 : 1.2482

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 1.2706 | Take Profit: 1.2809 | Stop Loss: 1.2653

USD/JPY

Japanese Yen rallies to 148.00 against USD as BoJ officials lift rate hike bets.

The Japanese Yen attracts strong follow-through buying amid renewed BoJ rate hike bets. The uncertainty about the Fed’s rate-cut path undermines the USD and weighs on USD/JPY. The fundamental backdrop supports prospects for a further depreciating move for the pair. The Japanese Yen (JPY) adds to its strong intraday gains against its American counterpart and drags the USD/JPY pair to a four-week low, around the 148.00 mark during the early European session on Thursday. A rise in Tokyo CPI, along with hawkish remarks by Bank of Japan (BoJ) officials, lifted bets that the central bank will exit the negative interest rates regime as soon as this month. This, along with a generally weaker tone around the equity markets, provides a goodish lift to the safe-haven JPY and drags the currency pair lower for the third successive day.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 149.7151 | Negative Crossover | Bearish
  • MA 20 : 149.5940 | Negative Crossover | Bearish
  • MA 50 : 148.4954 | Negative Crossover | Bearish

Simple :

  • MA 10 : 150.0419 | Negative Crossover | Bearish
  • MA 20 : 150.0625 | Negative Crossover | Bearish
  • MA 50 : 147.7939 | Positive Crossover | Bullish

RSI (Relative Strength Index): 40.8105 | Neutral Zone | Neutral

Stochastic   Oscillator : 22.9568 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 150.8153 R2 : 151.9920
  • S1 : 147.0060 S2 : 145.8293

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 148.67 | Take Profit: 147.37 | Stop Loss: 149.56

USD/CHF

USD/CHF finds some support above the 0.8800 mark, Swiss Unemployment Rate eyed.

USD/CHF loses momentum above 0.8800 in Thursday’s early European session. Fed Chair Powell thought the US rate had reached its peak and it would be cut later this year. The fall in Swiss inflation data prompted speculation that the SNB could cut interest rates later this month. Investors await the Swiss Unemployment Rate, US weekly initial Jobless Claims ahead of Fed Chair Powell’s testimony on Thursday. The USD/CHF pair finds some support above the 0.8800 mark during the early European session on Thursday. The pair trades in negative territory for the third consecutive day as the rising prospects of a rate cut by the Fed in June drag the US dollar (USD) lower. USD/CHF currently trades near 0.8810, down 0.12% on the day.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.8817 | Negative Crossover | Bearish
  • MA 20 : 0.8793 | Positive Crossover | Bullish
  • MA 50 : 0.8745 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.8817 | Negative Crossover | Bearish
  • MA 20 : 0.8810 | Positive Crossover | Bullish
  • MA 50 : 0.8680 | Positive Crossover | Bullish

RSI (Relative Strength Index): 56.8282 | Neutral Zone | Neutral

Stochastic   Oscillator : 52.8705 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.8888 R2 : 0.8966
  • S1 : 0.8634 S2 : 0.8556

Overall Sentiment: Neutral Market Direction: Sell

Trade Suggestion: Stop Sell: 0.8788 | Take Profit: 0.8693 | Stop Loss: 0.8864

Elsewhere In The Forex Market

NZD/USD up 0.3% to 0.6147, The AUD/USD up 0.34% to 0.6587. The EUR/GBP down 0.09% at 0.8552. USD/CAD is down 0.03% at 1.3507. AUD/NZD up 0.11% at 1.0712, The USD/CNY up 0.03% at 7.1987, AUD/SEK up 0.15% at 6.7590, at the time of writing.

Key Economic Events & Data Release Today:

(EUR) ECB Interest Rate Decision (Mar) Forecast 4.50%, Previous 4.50% at 08:15. (ECB) ECB Monetary Policy Statement at 08:15. (USD) Initial Jobless Claims Forecast 217K, Previous 215K at 08:30. (EUR) ECB Press Conference at 08:45. (ECB) ECB President Lagarde Speaks at 10:00.