. Daily FX Analysis - EUR/USD soars, GBP/USD defies fears, AUD/USD grapples, USD/JPY rebounds.

Daily FX Analysis – EUR/USD soars, GBP/USD defies fears, AUD/USD grapples, USD/JPY rebounds.

Daily FX Analysis – EUR/USD soars, GBP/USD defies fears, AUD/USD grapples, USD/JPY rebounds.

18 Jan 2024

Introduction

EUR/USD reclaims 1.0900 as US Dollar weakens; ECB’s hawkish stance supports. GBP/USD maintains gains below 1.2700 amid reduced expectations of a Bank of England rate cut. Australian Dollar struggles against USD after solid US Retail Sales data. Japanese Yen sees modest recovery, hindered by expectations of a dovish BoJ and diminished bets on a March Fed rate cut.

Markets In Focus Today – EUR/USD

EUR/USD buyers retake 1.0900, Lagarde’s speech, US data eyed.

EUR/USD is flirting with the 1.0900 mark, finding demand in Asian trading on Thursday—the pair gains amid renewed weakness in the US Dollar. The ECB hawks have pushed back against expectations of an early rate cut, lending further support to the currency pair. Lagarde and US data are on tap. EUR/USD traded mostly on the defensive on Wednesday, briefly dipping to new multi-week lows in the 1.0845/40 band and bouncing off that zone to the 1.0870 region as the NA session drew to a close. The continuation of the uptrend in the greenback was propped up by firmer readings from US Retail Sales during December, which in turn maintained the downside pressure on bets on an interest rate cut by the Fed in March.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0891 | Negative Crossover | Bearish
  • MA 20: 1.0927 | Negative Crossover |
  • MA 50 : 1.0964 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0881 | Negative Crossover | Bullish
  • MA 20 : 1.0920 | Negative Crossover | Bullish
  • MA 50 : 1.0965 | Positive Crossover | Bearish

RSI (Relative Strength Index): 41.94 | Sell Zone | Bearish

Stochastic   Oscillator : 44.23 | Neutral Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.0918 R2 : 1.1013
  • S1 : 1.0843 S2 : 1.0753

Overall Sentiment: Neutral Market Direction: Sell

Trade Suggestion: Limit Sell: 1.0909 | Take Profit: 1.0800 | Stop Loss: 1.0986

GBP/USD

GBP/USD holds below 1.2700, Bear cross-eyed.

The GBP/USD pair gains ground below the 1.2700 barrier during the early European session on Thursday. The major pair trades in positive territory for the second consecutive day as traders slashed their bets on an early interest rate cut by the Bank of England (BoE). GBP/USD reversed its direction after dipping below 1.2700 and closed in positive territory above 1.2750 on Thursday. The positive shift in risk mood supports the pair on Friday as markets await Producer Price Index (PPI) data from the US. Inflation figures provided a boost to the US Dollar (USD) with the initial reaction. Still, they seemingly failed to persuade markets that the Federal Reserve (Fed) could refrain from lowering the policy rate in March.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2678 | Positive Crossover | Bullish
  • MA 20 : 1.2710 | Negative Crossover | Bearish
  • MA 50 : 1.2807 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2664 | Positive Crossover | Bullish
  • MA 20 : 1.2710 | Negative Crossover | Bearish
  • MA 50 : 1.2707 | Negative Crossover | Bearish

RSI (Relative Strength Index): 49.77 | Buy Zone | Bullish

Stochastic   Oscillator : 61.37 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.2708 R2 : 1.2822
  • S1 : 1.2609 S2 : 1.2498

Overall Sentiment: Neutral Market Direction: Buy

Trade Suggestion: Limit Buy: 1.2680 | Take Profit: 1.2787 | Stop Loss: 1.2615

AUD/USD

Australian Dollar trims intraday losses after moderate Aussie economic data.

Australian Dollar attempts to halt its losing streak as the US Dollar improves on risk aversion. Australian Consumer Inflation Expectations and Unemployment Rate remained consistent at 4.5% and 3.9%, respectively. The solid US Retail Sales data reinforced the strength of the Greenback. The Australian Dollar (AUD) grapples to retrace its losses on Thursday that began on January 11. The robust economic data emanating on Wednesday from the United States (US) played a role in diminishing the strength of the AUD/USD pair. Traders’ expectations have been trimmed for the Fed’s first rate cut in March.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6564 | Negative Crossover | Bearish
  • MA 20 : 0.6640 | Negative Crossover | Bearish
  • MA 50 : 0.6714 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6555 | Positive Crossover | Bullish
  • MA 20 : 0.6641 | Negative Crossover | Bearish
  • MA 50 : 0.6710 | Negative Crossover | Bearish

RSI (Relative Strength Index): 30.77 | Sell Zone | Bearish

Stochastic   Oscillator : 17.35 | Sell Zone | Positive

Resistance   And Support Levels :

  • R1 : 0.6660 R2 : 0.6783
  • S1 : 0.6535 S2 : 0.6431

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 0.6613 | Take Profit: 0.6533 | Stop Loss: 0.6673

USD/JPY

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

The Japanese Yen recovered a bit from a multi-week low touched against the USD on Wednesday. Expectations that the BoJ will stick to its dovish stance in January should cap gains for the JPY.Reduced bets for a March Fed rate cut to act as a tailwind for the USD and the USD/JPY pair. The Japanese Yen (JPY) attracted some buyers on Thursday and recovered a part of its weekly losses against the US Dollar (USD) registered over the past three days. Furthermore, the upbeat US Retail Sales data released on Wednesday dashed hopes for a March Fed rate cut, which, in turn, should act as a tailwind for the Greenback.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 147.68 | Positive Crossover | Bullish
  • MA 20 : 146.18 | Positive Crossover | Bullish
  • MA 50 : 144.23 | Positive Crossover | Bullish

Simple :

  • MA 10 : 147.86 | Positive Crossover | Bullish
  • MA 20 : 146.18 | Positive Crossover | Bullish
  • MA 50 : 144.23 | Positive Crossover | Bullish

RSI (Relative Strength Index): 70.28 | Buy Zone | Bullish

Stochastic   Oscillator : 85.04 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 148.18 R2 : 149.71
  • S1 : 146.57 S2 : 145.00

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 147.54 | Take Profit: 149.14 | Stop Loss: 146.61

Elsewhere In The Forex Market

EUR/GBP up 0.05% to 0.8588. The NZD/USD up 0.07% to 0.6121. The USD/CHF is down 0.02% at 0.8643. USD/CAD is down 0.14% at 1.3485. EUR/JPY is up 0.43% at 160.73, The USD/CNY is down 0.02% at 7.1947, and the AUD/SEK is down 0.09% at 6.8392, at the time of writing.

Key Economic Events & Data Release Today:

(AUD) Employment Change (Dec) Forecast 17.6K, Previous 61.5K at 06:00. (JPY) Industrial Production (MoM) (Nov) Forecast –0.9%, Previous 1.3% at 10:00. (ECB) ECB Publishes Account of Monetary Policy Meeting at 18:00. (USD) Building Permits (Dec) Forecast 1.426M, Previous 1.560M at 19:00. (USD) Initial Jobless Claims Forecast 270K, Previous 202K at 19:00. (EUR) ECB President Lagarde Speaks at 20:45.