. Daily FX Analysis - EUR/USD Resistance, GBP/USD Juncture, USD/CAD Support.

Daily FX Analysis – EUR/USD Resistance, GBP/USD Juncture, USD/CAD Support.

Daily FX Analysis – EUR/USD Resistance, GBP/USD Juncture, USD/CAD Support.

08 Jan 2024

Introduction

In the dynamic world of forex trading, the EUR/USD pair faces resistance at 1.0970, influenced by a stronger US Dollar and higher Treasury bond yields. Meanwhile, GBP/USD hovers near the crucial 1.2700 level, confronting potential downside risks. USD/CAD experiences modest gains, supported by elevated US bond yields and a softer risk tone. The Japanese Yen struggles to capitalize on intraday gains against the US Dollar amid uncertainties surrounding the Bank of Japan’s policy shift.

Markets In Focus Today – EUR/USD

EUR/USD The key resistance level is seen at 1.0970.

The EUR/USD pair loses ground around 1.0935 during the early European session on Monday. The downtick of the major pair is backed by a stronger US Dollar and higher US Treasury bond yields. The US labor data on Friday cast doubt on the Federal Reserve’s rate cut expectation. EUR/USD managed to erase its daily losses after dipping below 1.0900 on Friday but closed the first week of 2024 in negative territory. The pair’s near-term technical outlook fails to provide a directional clue in the near term and investors are likely to pay close attention to risk perception in the absence of high-tier macroeconomic data releases. Mixed macroeconomic data releases from the US caused EUR/USD to fluctuate wildly in the American session on Friday.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.10 | Negative Crossover | Bearish
  • MA 20 : 1.10 | Negative Crossover | Bearish
  • MA 50 : 1.09 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.10 | Negative Crossover | Bearish
  • MA 20 : 1.10 | Negative Crossover | Bearish
  • MA 50 : 1.09 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 49.68 | Buy Zone | Bullish

Stochastic   Oscillator : 22.48 | Sell Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.11 R2 : 1.12
  • S1 : 1.08 S2 : 1.07

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.0922 | Take Profit : 1.1033 | Stop Loss : 1.0860

GBP/USD

GBP/USD dives to near 1.2700 psychological support followed by 14-day EMA.

GBP/USD halts its three-day winning streak, trading around 1.2700 psychological level during the early European hours on Monday. The GBP/USD pair seems to face a critical juncture, with the possibility of a break below the psychological level. GBP/USD closed the previous week virtually unchanged on the back of a decisive recovery seen in the late American session on Friday. The pair holds steady at around 1.2700 but the negative shift seen in risk sentiment could make it difficult for Pound Sterling to find demand. The US Dollar (USD) gathered strength against its major rivals with the knee-jerk reaction to the December jobs report but failed to preserve its bullish momentum. The disappointing ISM Services PMI and the underlying details of the labor market data didn’t allow markets to scale back bets on a Federal Reserve policy pivot in March.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.27 | Positive Crossover | Bullish
  • MA 20 : 1.27 | Positive Crossover | Bullish
  • MA 50 : 1.26 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.27 | Negative Crossover | Bearish
  • MA 20 : 1.27 | Positive Crossover | Bullish
  • MA 50 : 1.26 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 54.08 | Buy Zone | Bullish

Stochastic   Oscillator : 40.55 | Neutral Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.28 R2 : 1.29
  • S1 : 1.26 S2 : 1.25

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.2681 | Take Profit : 1.2806 | Stop Loss : 1.2605

USD/CAD

USD/CAD trades with modest gains above mid-1.3300s, lacks bullish conviction.

USD/CAD attracts some buyers on Monday and is supported by a downtick in Crude Oil prices. Elevated US bond yields and a softer risk tone underpin the USD and further lend some support. The USD/CAD pair ticks higher during the Asian session on the first day of a new week, albeit lacks follow-through buying and remains confined in Friday’s broader trading range. Spot prices currently trade just above mid-1.3300s and seem poised to prolong the recent goodish recovery move from a five-month low touched in December. The aforementioned fundamental backdrop seems tilted in favour of the USD/CAD bulls and supports prospects for further gains. Market participants, however, might prefer to wait on the sidelines and look to the latest US consumer inflation figures, due on Thursday.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.33 | Positive Crossover | Bullish
  • MA 20 : 1.34 | Positive Crossover | Bullish
  • MA 50 : 1.35 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.33 | Positive Crossover | Bullish
  • MA 20 : 1.33 | Positive Crossover | Bullish
  • MA 50 : 1.35 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 49.31 | Buy Zone | Bullish

Stochastic   Oscillator : 82.73 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.35 R2 : 1.36
  • S1 : 1.32 S2 : 1.31

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.3362 | Take Profit : 1.3477 | Stop Loss : 1.3297

USD/JPY

Japanese Yen struggles to capitalize on its modest intraday gains against US Dollar.

The Japanese Yen attracts buyers on Monday and recovers a part of last week’s heavy losses. Diminishing odds that the BoJ will exit its ultra-lose policy in January cap any further upside. The Japanese Yen (JPY) attracts some haven flows on the first day of a new week and drags the USD/JPY pair away from over a three-week high, around the 146.00 neighbourhood touched on Friday. Against the backdrop of China’s economic woes and geopolitical risks, diminishing odds for a more aggressive policy easing by the Federal Reserve (Fed) weigh on investors’ sentiment and benefit the traditional safe-haven JPY. The Japanese Yen declined over 2% last week and recorded its worst weekly performance since June 2022 amid fading hopes for an imminent shift in the Bank of Japan’s policy shift later this month.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 143.31 | Positive Crossover | Bullish
  • MA 20 : 143.57 | Positive Crossover | Bullish
  • MA 50 : 145.27 | Negative Crossover | Bearish

Simple :

  • MA 10 : 142.65 | Positive Crossover | Bullish
  • MA 20 : 142.79 | Positive Crossover | Bullish
  • MA 50 : 146.52 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 52.92 | Buy Zone | Bullish

Stochastic   Oscillator : 81.40 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 146.29 R2 : 148.19
  • S1 : 140.10 S2 : 138.19

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 144.24 | Take Profit : 146.13 | Stop Loss : 143.20

Elsewhere In The Forex Market

EUR/GBP up 0.11% to 0.8610. The AUD/USD down 0.28% to 0.6696. The NZD/USD down 0.22% at 0.6229. USD/CHF up 0.03% at 0.8503. EUR/JPY up 0.07% at 158.41, The USD/CNY up 0.30% at 7.1609, AUD/SEK up 0.02% at 6.8895, at the time of writing.

Key Economic Events & Data Release Today:

(CHF) Retail Sales (YoY) (Nov) Actual 0.7%, Forecast 0.0%, Previous –0.1% at 13:00. (EUR) Retail Sales (MoM) (Nov) Forecast –0.3%, Previous 0.1% at 15:30. (EUR) Unemployment Rate (Nov) Previous 6.5% at 15:30.