. Daily FX Analysis - Euro defies, GBP soars, USD/CAD falls, USD/CHF rebounds amid Fed buzz.

Daily FX Analysis – Euro defies, GBP soars, USD/CAD falls, USD/CHF rebounds amid Fed buzz.

Daily FX Analysis – Euro defies, GBP soars, USD/CAD falls, USD/CHF rebounds amid Fed buzz.

28 Nov 2023

Introduction:

In currency markets, the EUR/USD grapples with the 1.0950 level amid scrutiny of the Federal Reserve and European Central Bank. The GBP/USD achieves its highest level since September, reflecting the Bank of England’s hawkish stance. USD/CAD weakens near 1.3600 on rising crude prices, while USD/CHF attempts a rebound above 0.8800. Swiss Real Retail Sales data is anticipated on Thursday. These dynamics shape current market sentiments, emphasizing key central bank speeches and economic indicators.

EUR/USD:

EUR/USD eases near 1.0950 as the Fed and ECB eyed.

EUR/USD is contending with the 1.0950 level, pulling back from the early Tuesday near three-month high of 1.0965. The pair encounters selling pressure as the US Dollar regains strength amid a mixed market sentiment and in anticipation of various Fed speeches. Speeches from ECB officials also hold significance.

Achieving its most elevated daily close in three months, the EUR/USD maintains a distinct bullish momentum, buoyed by a generally weakened US Dollar. The Greenback faces persistent pressure, with Treasury yields hovering around recent lows.

Christine Lagarde, President of the European Central Bank (ECB), cautioned that there is a possibility of a slight increase in headline inflation in the months ahead.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.0943 | Positive Crossover | Bullish
  • MA 20: 1.0912 | Positive Crossover | Bullish
  • MA 50: 1.0822 | Positive Crossover | Bullish

Simple:

  • MA 5: 1.0947 | Negative Crossover | Bearish
  • MA 20: 1.0925 | Positive Crossover | Bullish
  • MA 50: 1.0822| Positive Crossover | Bullish

RSI (Relative Strength Index): 65.25| Buy Zone | Bullish

Stochastic Oscillator: 74.79| Buying Zone | Positive

Resistance And Support Levels:

  • R1: 1.0954| R2: 1.1060
  • S1: 1.0874| S2: 1.0783

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 1.0974 | Take Profit: 1.1060 | Stop Loss: 1.0926

GBP/USD:

The GBP/USD attains its highest level since early September and is currently trading around 1. 2630.

The GBP/USD sustains its upward movement following a hawkish tone from the Bank of England (BoE). Governor Andrew Bailey acknowledged the challenge of returning inflation to the 2% target.

Reaching its peak since early September, GBP/USD touched 1.2644 on Monday. In the Asian session on Tuesday, the pair maintains its upward momentum, currently trading around 1.2630.

For the fourth consecutive day, the British Pound (GBP) continues to exhibit strength against the US Dollar (USD), showcasing the resilience of the UK economy despite the tightening measures implemented by the Bank of England (BoE).

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.2614| Positive Crossover | Bullish
  • MA 20: 1.2547| Positive Crossover | Bullish
  • MA 50: 1.2421 | Positive Crossover | Bullish

Simple:

  • MA 5: 1.2619 | Positive Crossover | Bullish
  • MA 20: 1.2549 | Positive Crossover | Bullish
  • MA 50: 1.2421 | Positive Crossover | Bullish

RSI (Relative Strength Index): 72.56| Buy Zone | Bullish

Stochastic Oscillator: 90.62| Buy zone | Neutral

Resistance And Support Levels:

  • R1: 1.2629| R2: 1.2781
  • S1: 1.2507| S2: 1.2385

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 1.2656| Take Profit: 1.2781 | Stop Loss: 1.2591

USD/CAD:

USD/CAD weakens close to the 1.3600 level, influenced by rising crude prices and positive risk sentiment.

USD/CAD remains on a downward trend due to favorable market sentiment. The Canadian Dollar gains support from the recovery in WTI prices.

For the third successive session, USD/CAD continued its decline, trading below the psychological level of 1.3600 during Tuesday’s Asian session. The Canadian Dollar (CAD) receives support from the recovery in crude oil prices and positive market sentiment.


In the upcoming days, attention is likely to be directed towards Canada’s Gross Domestic Product (GDP) report on Thursday, followed by the Net Change in Employment data on Friday.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.3620 | Negative Crossover | Bearish
  • MA 20: 1.3669| Negative Crossover | Bearish
  • MA 50: 1.3709 | Negative Crossover | Bearish

Simple:

  • MA 5: 1.3623 | Negative Crossover | Bearish
  • MA 20: 1.3678 | Negative Crossover | Bearish
  • MA 50: 1.3722| Negative Crossover | Bearish

RSI (Relative Strength Index): 32.72| Selling Zone| Bearish

Stochastic Oscillator: 0.31 |Selling Zone | Negative

Resistance And Support Levels:

  • R1: 1.3698| R2: 1.3823
  • S1: 1.3592 | S2: 1.3445

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.3550 | Take Profit: 1.3445 | Stop Loss: 1.3628

USD/CHF:

USD/CHF is trying to recover from its lowest point in three months and is currently trading above the 0.8800 level.

Attempting a rebound from its lowest point in three months, USD/CHF is presently trading above the 0.8800 level.

During Tuesday’s Asian session, USD/CHF is trading above the psychological level of 0.8800, recovering from the three-month low at 0.8793. The pair faces challenges in halting losses attributed to the weakened US Dollar (USD), driven by the expectation that the US Federal Reserve (Fed) is likely to conclude its monetary rate hike cycle.

Additionally, Swiss Real Retail Sales for October are set to be unveiled on Thursday, with an anticipated improvement of 0.2% compared to the preceding 0.6% decline.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.8807 | Negative Crossover | Bearish
  • MA 20: 0.8834| Negative Crossover | Bearish
  • MA 50: 0.8889| Negative Crossover | Bearish

Simple:

  • MA 5: 0.8805 | Negative Crossover | Bearish
  • MA 20: 0.8827| Negative Crossover | Bearish
  • MA 50: 0.8909| Negative Crossover | Bearish

RSI (Relative Strength Index): 28.76| Selling Zone | Bearish

Stochastic Oscillator: 17.58| Sell Zone | Negative

Resistance And Support Levels:

  • R1: 0.8861 | R2: 0.8951
  • S1: 0.8794 | S2: 0.8694

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 0.8770| Take Profit: 0.8694 | Stop Loss: 0.8820.

Elsewhere in the Forex Market

NZD/USD up 0.02% to 1.2629. The AUD/USD up 0.24% to 0.6621. The EUR/GBP down 0.07% at 0.8668. USD/JPY down 0.24% at 148.31, EUR/JPY down 0.30% at 162.35, The USD/CNY down 0.00% at 7.1526, AUD/SEK up 0.25% at 6.9043, at the time of writing.

Key Economic Events & Data Release Today:

(AUD) Retail Sales (MoM) (Oct) Actual –0.2%, Forecast 0.1%, Previous 0.9% at 06:00.

(USD) CB Consumer Confidence (Nov) Forecast 101.0, Previous 102.6 at 20:30.

(EUR) ECB President Lagarde Speaks at 21:30.

(GBP) MPC Member Haskel Speaks at 22:30.