. Daily FX Analysis - Forex braces for US NFP impact.

Daily FX Analysis – Forex braces for US NFP impact.

Daily FX Analysis – Forex braces for US NFP impact.

05 Apr 2024

Introduction

EUR/USD remains cautious below 1.0850 ahead of the US NFP release. Trading under pressure, the pair reflects market apprehension amidst escalating geopolitical tensions and anticipation of key US NFP data. With eyes on labor market figures, a significant outcome could sway market sentiment toward or away from a June rate cut. Similarly, GBP/USD retreats towards 1.2600 amid geopolitical risks and NFP anticipation. Japanese Yen weakens against USD, fueled by a risk-off environment and intervention speculation. Australian Dollar consolidates amid mixed data and US Dollar dynamics ahead of the NFP report.

Markets In Focus Today – EUR/USD

EUR/USD stays defensive below 1.0850 on market caution, ahead of US NFP.

EUR/USD is trading on the back foot below 1.0850 in European trading on Friday. The US Dollar stays supported by market caution on the back of escalating geopolitical tensions and nervousness ahead of the key US NFP data release. EUR/USD erased its daily gains and closed flat on Thursday after climbing to its highest level since March 21 above 1.0870. The pair fluctuates in a tight channel below 1.0850 in the early European session on Friday as investors gear up for the US labor market data. Nonfarm Payrolls (NFP) in the US are forecast to rise by 200,000 in March and the Unemployment Rate is expected to hold steady at 3.9%. Unless there is a significant revision to February’s NFP increase of 275,000, a strong NFP growth of 250,000 or higher could cause markets to refrain from pricing in a rate cut in June and provide a boost to the USD with an immediate reaction. On the other hand, a disappointing print below 200,000 could point to loosening conditions in the labor market and revive optimism about a policy pivot in June.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0821 | Positive Crossover | Bullish
  • MA 20 : 1.0832 | Positive Crossover | Bullish
  • MA 50 : 1.0843 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0810 | Positive Crossover | Bullish
  • MA 20 : 1.0850 | Negative Crossover | Bearish
  • MA 50 : 1.0828 | Positive Crossover | Bullish

RSI (Relative Strength Index): 50.1794 | Buy Zone | Bullish

Stochastic   Oscillator : 51.0938 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.0928 R2 : 1.0978
  • S1 : 1.0765 S2 : 1.0715

Overall Sentiment: Neutral Market Direction: Sell

Trade Suggestion: Limit Sell: 1.0848 | Take Profit: 1.0799 | Stop Loss: 1.0882

GBP/USD

GBP/USD drops toward 1.2600, with eyes on US NFP data, and geopolitical risks.

GBP/USD is losing ground toward 1.2600 in the European session on Friday. The pair is undermined by resurgent safe-haven demand for the US Dollar amid intensifying geopolitical tensions between Israel and Iran. Markets also trade with caution heading into the US NFP release. GBP/USD registered strong daily gains on Wednesday and continued to stretch higher early Thursday. The pair stays in positive territory above 1.2650 in the European session and the technical outlook points to a bullish tilt in the near term. The US economic calendar will offer weekly Initial Jobless Claims data. Ahead of Friday’s Nonfarm Payrolls (NFP) report for March, investors could refrain from taking large positions based on this data alone.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2631 | Negative Crossover | Bearish
  • MA 20 : 1.2653 | Negative Crossover | Bearish
  • MA 50 : 1.2662 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2618 | Positive Crossover | Bullish
  • MA 20 : 1.2678 | Negative Crossover | Bearish
  • MA 50 : 1.2665 | Negative Crossover | Bearish

RSI (Relative Strength Index): 45.7749 | Neutral Zone | Neutral

Stochastic   Oscillator : 37.3891 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.2819 R2 : 1.2894
  • S1 : 1.2576 S2 : 1.2501

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 1.2640 | Take Profit: 1.2587 | Stop Loss: 1.2683

USD/JPY

Japanese Yen slides to a fresh daily low against against USD, and US NFP looms large.

The Japanese Yen (JPY) meets with a fresh supply after rising to over a two-week high against its American counterpart earlier this Friday and drops to a daily low during the first half of the European session. The downfall could be attributed to some follow-through US Dollar (USD) buying, bolstered by the overnight hawkish remarks by Federal Reserve (Fed) officials. That said, any meaningful depreciating move seems elusive in the wake of the prevalent risk-off environment, which tends to drive flows toward the safe-haven JPY. Apart from this, speculations that Japanese authorities will intervene in the markets to prop up the domestic currency should help limit the downside for the JPY. Furthermore, Bank of Japan Governor Kazuo Ueda signaled a chance of a rate hike if the JPY moves affect inflation and wages, which might further hold back the JPY bears from placing fresh bets. This, in turn, warrants caution before confirming that the USD/JPY pair pullback from a multi-decade high has run its course as traders look to the US NFP for fresh impetus.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 151.2664 | Positive Crossover | Bullish
  • MA 20 : 150.7826 | Positive Crossover | Bullish
  • MA 50 : 149.6706 | Positive Crossover | Bullish

Simple :

  • MA 10 : 151.4408 | Negative Crossover | Bearish
  • MA 20 : 150.4009 | Positive Crossover | Bullish
  • MA 50 : 149.7365 | Positive Crossover | Bullish

RSI (Relative Strength Index): 60.8323 | Buy Zone | Bullish

Stochastic   Oscillator : 83.6032 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 152.0153 R2 : 153.3100
  • S1 : 147.8240 S2 : 146.5293

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 150.77 | Take Profit: 151.95 | Stop Loss: 149.99

AUD/USD

Australian Dollar consolidates amid improved US Dollar ahead of US Nonfarm Payrolls.

The Australian Dollar (AUD) snaps its three-day winning streak following the release of unchanged Final Retail Sales and downbeat Trade Balance data from Australia on Friday. However, the US Dollar (USD) faced downward pressure due to softer labor market data from the United States (US) on Thursday, supporting the AUD/USD pair. Australia’s Trade Surplus (Month-over-Month) narrowed to 7,280 million in March, falling short of the expected 10,400 million and February’s reading of 10,058 million, according to data published by the Australian Bureau of Statistics. Australia’s Exports decreased by 2.2% month-over-month, contrasting with the previous increase of 1.6%. Meanwhile, the nation’s Imports grew by 4.8%, compared to 1.3% prior.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6550 | Positive Crossover | Bullish
  • MA 20 : 0.6548 | Positive Crossover | Bullish
  • MA 50 : 0.6557 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6537 | Positive Crossover | Bullish
  • MA 20 : 0.6555 | Positive Crossover | Bullish
  • MA 50 : 0.6543 | Positive Crossover | Bullish

RSI (Relative Strength Index): 55.3061 | Buy Zone | Bullish

Stochastic   Oscillator : 62.0907 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.6628 R2 : 0.6673
  • S1 : 0.6483 S2 : 0.6438

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 0.6554 | Take Profit: 0.6612 | Stop Loss: 0.6519

Elsewhere In The Forex Market

NZD/USD down 0.15% to 0.6017, The USD/CAD up 0.17% to 1.3566. The EUR/GBP up 0.14% at 0.8584. USD/CHF up 0.26% at 0.9036. AUD/NZD is down 0.2% at 1.0924, The USD/CNY is up 0.01% at 7.2320, and AUD/SEK is down 0.00% at 7.0096, at the time of writing.

Key Economic Events & Data Release Today:

(EUR) Retail Sales (MoM) (Feb) Forecast –0.3%, Previous 0.1% at 14:30. (CAD) Employment Change (Mar) Forecast 25.9K, Previous 40.7K at 18:00. (USD) Unemployment Rate (Mar) Forecast 3.9%, Previous 3.9% at 18:00. (USD) Nonfarm Payrolls (Mar) Forecast 212K, Previous 275K at 18:00. (CAD) Ivey PMI (Mar) Forecast 54.5, Previous 53.9 at 19:30.