Introduction:

In the ever-shifting landscape of currency markets, the GBP/USD, EUR/USD, AUD/USD, and USD/JPY pairs are facing unique challenges and opportunities. The GBP/USD is grappling with a multi-month low amid a robust USD, while the EUR/USD is struggling beneath 1.0600 due to a resurgent US Dollar. Meanwhile, the AUD/USD is cautiously eyeing the 0.6400 level as renewed demand for the US Dollar emerges. Lastly, the USD/JPY is flirting with an 11-month high of 149.00, potentially inviting Japanese intervention amidst a hawkish Fed stance. Each currency pair tells a distinct story in today’s dynamic forex market.

GBP/USD:

GBP/USD is hanging near a multi-month low and appears vulnerable around 1.2200 amid bullish USD.

During Tuesday’s early European session, the GBP/USD pair is still under selling pressure and is trading in the red for the fourth straight week. The important pair is trading close to 1.2203, down 0.07% for the day.

GBP/USD extended its decline to the 1.2250 region early on Friday after closing Thursday’s trading session in the red for the second straight day. The pair’s short-term technical picture shows oversold conditions, although a strong rebound may be difficult to achieve.

The BoE is expected to hold off on tightening policy further due to the deteriorating UK economic outlook. Therefore, the expanding policy gap between the Federal Reserve and the BoE may keep the GBP/USD pair in a downward trend.

Technical Overview :

Moving Averages:

Exponential:

• MA 5: 1.2205 | Negative Crossover | Bearish
• MA 20: 1.2293| Negative Crossover | Bearish
• MA 50: 1.2404 | Negative Crossover | Bearish

Simple:

• MA 5: 1.2208 | Negative Crossover | Bearish
• MA 20: 1.2305 | Negative Crossover | Bearish
• MA 50: 1.2424 | Negative Crossover | Bearish

RSI (Relative Strength Index): 20.03 | Sell Zone | Negative

Stochastic Oscillator: 0| Sell Zone | Negative

Resistance And Support Levels: 

• R1: 1.2304 | R2: 1.2454
• S1: 1.2160 | S2: 1.1982

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.2087 | Take Profit: 1.1981 | Stop Loss: 1.2169

EUR/USD:

Due to the stronger US Dollar and yields, the EUR/USD remains below 1.0600.

Early on Tuesday in Europe, the EUR/USD maintained its downward momentum despite stabilizing below 1.0600. The continuous rise in the US Dollar and US Treasury bond yields on the back of the Fed’s higher rates for a longer outlook continues to weigh on the pair.

The EUR/USD fell below 1.0630 and hit its lowest level since March at 1.0574. The Euro posted its fifth straight daily loss as its downturn continued. The US dollar was strong overall on Monday, but the Euro was under pressure.

The German IFO poll, which was among the Eurozone’s data on Monday, revealed a lesser fall than anticipated. The release of inflation statistics beginning on Thursday will be the key report of the week since there is no substantial data from the Eurozone slated for release on Tuesday.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 1.0603| Negative Crossover | Bearish
• MA 20: 1.0645 | Negative Crossover | Bearish
• MA 50: 1.0698 | Negative Crossover | Bearish

Simple:

• MA 5: 1.0606 | Negative Crossover | Bearish
• MA 20: 1.0651 | Negative Crossover | Bearish
• MA 50: 1.0694 | Negative Crossover | Bearish

RSI (Relative Strength Index): 38.38| Sell Zone | Bearish

Stochastic Oscillator: 31.06 | Sell Zone | Negative

Resistance And Support Levels: 

• R1: 1.0627| R2: 1.0789
• S1: 1.0514 | S2: 1.03317

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell 1.0444| Take Profit: 1.0331 | Stop Loss: 1.0531

AUD/USD:

As new demand for the US Dollar emerges, AUD/USD takes a defensive move toward 0.6400.

AUD/USD has shifted to the back foot near 0.6400, halting its recovery from Tuesday’s Asian session. In spite of the cautious atmosphere and sustained increase in US Treasury bond yields, the US dollar is seeing renewed demand. Awaiting US data and Fed speak.

Due to a stronger US Dollar, which was supported by higher Treasury yields and a cautious market stance on Monday, the AUD/USD lost momentum. The pair hit bottom at 0.6405 before surging in the direction of 0.6425. With a little slanted downside risk, it is still moving sideways.

The Monthly Consumer Price Index from Australia, which is due on Wednesday, will be the following important report. Consumer Confidence, New Home Sales, and the Richmond Fed Manufacturing Index are due in the US on Tuesday. The Core Personal Consumption Expenditure Price Index, which will be announced on Friday, will contain the most important data.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 0.6416 | Negative Crossover | Bearish
• MA 20: 0.6427 | Negative Crossover | Bearish
• MA 50: 0.6433 | Negative Crossover | Bearish

Simple:

• MA 5: 0.6418 | Negative Crossover | Bearish
• MA 20: 0.6434 | Negative Crossover | Bearish
• MA 50: 0.6422 | Negative Crossover | Bearish

RSI (Relative Strength Index): 43.13 | Neutral Zone | Neutral

Stochastic Oscillator: 15.09| Sell Zone | Negative

Resistance And Support Levels: 

• R1: 0.6486 | R2: 0.6591
• S1: 0.6393 | S2: 0.6266

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 0.6355 | Take Profit: 0.6266 | Stop Loss: 0.6434

USD/JPY:

Amid risks of a Japan intervention, the USD/JPY flirts with an 11-month high of 149.00.

In Tuesday’s Asian session, the USD/JPY maintained its recent rise to an 11-month high of 149.00. The pair is supported by the recent increase in US Treasury bond yields brought on by the Fed’s hawkish stance. Risks of Japanese FX intervention loom.

After the Bank of Japan (BoJ) decided to change its policy rate, the USD/JPY reversed its Thursday losses. The BoJ kept its current interest rates at -0.1%, as was generally predicted. At 148.30, the spot price is trading higher in the opening minutes of Friday’s European trading session.

The preliminary US S&P Global PMIs for September are among the economic data releases that market participants are watching for. These numbers may offer insightful information on the state of the US economy and help traders spot potential opportunities to trade the US Dollar (USD).

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 148.69 | Positive Crossover | Bullish
• MA 20: 148.17 | Positive Crossover | Bullish
• MA 50: 147.50 | Positive Crossover | Bullish

Simple:

• MA 5: 148.71 | Positive Crossover | Bullish
• MA 20: 148.11| Positive Crossover | Bullish
• MA 50: 147.53 | Positive Crossover | Bullish

RSI (Relative Strength Index): 65.39 | Buy Zone | Bullish

Stochastic Oscillator: 95.45| Buy | Positive

Resistance And Support Levels: 

• R1: 148.92 | R2: 151.76
• S1: 147.37 | S2: 145.81

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 149.69 | Take Profit: 151.76 | Stop Loss: 148.40

Elsewhere in the Forex Market

NZD/USD down 0.47% to 0.5939. The EUR/JPY up 0.02% to 157.69. The USDCHF is up 0.21% at 0.9138. USD/CAD up 0.03% at 1.3494, EUR/GBP up 0.18% at 0.8689. The USD/CNY up 0.1% at 7.3117, and AUD/SEK is down 0.18% at 7.0915, at the time of writing.

Key Economic Events & Data Release Today:

(USD) Building Permits Forecast 1.543M, Previous 1.443M at 17:30.

(CAD) Manufacturing Sales (MoM) Previous 1.6% at 18:00.

(USD) CB Consumer Confidence (Sep) Forecast 105.5, Previous 106.1 at 19:30.

(USD) New Home Sales (Aug) Forecast 700k, Previous 714K at 19:30.