. Daily FX Analysis - Forex gains, central bank buzz ahead.

Daily FX Analysis – Forex gains, central bank buzz ahead.

Daily FX Analysis – Forex gains, central bank buzz ahead.

21 Feb 2024

Introduction

In the forex market, GBP/USD maintains gains above 1.2600 driven by supportive remarks from BoE Governor Bailey and USD weakness. Attention now turns to FOMC Minutes and central bank communications. Meanwhile, EUR/USD holds above 1.0800, benefiting from a weak USD amid Fed rate cut speculations. USD/CHF declines to 0.8800, reflecting expectations of prolonged higher rates and subdued US Dollar sentiment. EUR/GBP retreats from February highs to 0.8560 as positive BoE comments strengthen the Pound against the Euro.

Markets In Focus Today – GBP/USD

GBP/USD clings to gains above 1.2600, and all eyes are on FOMC Minutes.

GBP/USD is holding the renewed upside above 1.2600 in early Europe on Wednesday. The pair continues to draw support from hawkish comments from BoE Governor Bailey and an extended US Dollar weakness. The focus now shifts to the Fed Minutes, BoE- and Fed-speak. After edging higher during the European trading hours, GBP/USD lost its traction and closed the first day of the week flat near 1.2600. The pair stays on the back foot early Tuesday and trades slightly below that level. Bank of England (BoE) Governor Andrew Bailey, Deputy Governor Ben Broadbent, and Monetary Policy Committee (MPC) members Swati Dhingra and Megan Greene will testify before the UK Treasury Select Committee starting at 10:15 GMT on Tuesday.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2614 | Positive Crossover | Bullish
  • MA 20 : 1.2629 | Negative Crossover | Bearish
  • MA 50 : 1.2629 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2607 | Positive Crossover | Bullish
  • MA 20 : 1.2635 | Negative Crossover | Bearish
  • MA 50 : 1.2677 | Negative Crossover | Bearish

RSI (Relative Strength Index): 48.6850 | Neutral Zone | Neutral

Stochastic   Oscillator : 37.9447 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.2762 R2 : 1.2806
  • S1 : 1.2617 S2 : 1.2573

Overall Sentiment: Neutral Market Direction: Buy

Trade Suggestion: Stop Buy: 1.2644 | Take Profit: 1.2710 | Stop Loss: 1.2608

EUR/USD

EUR/USD consolidates gains above 1.0800, awaits Fed Minutes.

EUR/USD is holding gains above 1.0800 early Wednesday, having hit two-week highs on Tuesday. The US Dollar remains broadly weak, despite a mixed market mood, as investors weigh Fed rate cut bets and US government shutdown risks ahead of the Fed Minutes. The EUR/USD pair managed to advance up to 1.0838, its highest since February 2, retaining the 1.0800 mark by the end of the American session. The pair benefited from the board US Dollar’s weakness, as investors kept dumping the currency on the back of speculation the Federal Reserve would further delay rate cuts. Market players are considering the June meeting for the initial hike ahead of the release of the Federal Open Market Committee (FOMC) Meeting Minutes.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0784 | Positive Crossover | Bullish
  • MA 20 : 1.0800 | Positive Crossover | Bullish
  • MA 50 : 1.0834 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0771 | Positive Crossover | Bullish
  • MA 20 : 1.0791 | Positive Crossover | Bullish
  • MA 50 : 1.0889 | Negative Crossover | Bearish

RSI (Relative Strength Index): 49.3708 | Buy Zone | Bullish

Stochastic   Oscillator : 51.1440 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.0982 R2 : 1.1041
  • S1 : 1.0790 S2 : 1.0731

Overall Sentiment: Bullish Market Direction: Neutral

Trade Suggestion: Limit Buy: 1.0795 | Take Profit: 1.0875 | Stop Loss: 1.0754

USDCHF

USD/CHF depreciates to near 0.8800 despite expectations of the Fed prolonging higher rates.

USD/CHF extends losses towards the vicinity of 0.8800 amid a subdued US Dollar. The US Fed is expected to uphold elevated policy rates to tackle persistent inflation. Swiss Franc gained support from favorable Swiss Trade Balance figures on Tuesday.USD/CHF moves downward for the second consecutive day, trading lower near 0.8800 during the Asian session on Wednesday. The weakening of the USD/CHF pair can be attributed to a softer US Dollar (USD), which is influenced by subdued US Treasury yields. This downturn may reflect market sentiment regarding potential rate cuts by the Federal Reserve (Fed) in upcoming meetings.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.8793 | Positive Crossover | Bullish
  • MA 20 : 0.8747 | Positive Crossover | Bullish
  • MA 50 : 0.8707 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.8803 | Positive Crossover | Bullish
  • MA 20 : 0.8728 | Positive Crossover | Bullish
  • MA 50 : 0.8628 | Positive Crossover | Bullish

RSI (Relative Strength Index): 62.5630 | Buy Zone | Bullish

Stochastic   Oscillator : 79.7586 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.8705 R2 : 0.8784
  • S1 : 0.8451 S2 : 0.8373

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 0.8796 | Take Profit: 0.8888 | Stop Loss: 0.8750

EUR/GBP

EUR/GBP trades around 0.8560 after retreating from February’s high marked on Tuesday.

EUR/GBP halts its five-day winning streak on Wednesday. The Pound Sterling strengthens from the positive comments of BoE Governor Andrew Bailey. The Euro depreciates as the market adopts caution due to reduced prospects for early rate cuts globally.EUR/GBP snaps its five-day winning streak, edging lower to near 0.8560 during the Asian session on Wednesday. The Pound Sterling (GBP) strengthens against the Euro (EUR) on the back of positive comments from the Bank of England (BoE) Governor Andrew Bailey. Governor Bailey and other policymakers testified before the United Kingdom Parliament on Tuesday. Bailey acknowledged that investors speculating on interest rate cuts this year are not unreasonable.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.8549 | Positive Crossover | Bullish
  • MA 20 : 0.8550 | Positive Crossover | Bullish
  • MA 50 : 0.8577 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.8543 | Positive Crossover | Bullish
  • MA 20 : 0.8539 | Positive Crossover | Bullish
  • MA 50 : 0.8588 | Negative Crossover | Bearish

RSI (Relative Strength Index): 51.9223 | Neutral Zone | Neutral

Stochastic   Oscillator : 79.1226 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.8640 R2 : 0.8681
  • S1 : 0.8508 S2 : 0.8467

Overall Sentiment: Bullish Market Direction: Neutral

Trade Suggestion: Limit Buy: 0.8563 | Take Profit: 0.8593 | Stop Loss: 0.8546

Elsewhere In The Forex Market

NZD/USD up 0.32% to 0.6183. The USD/CAD was down 0.06% to 1.3515. The AUD/USD up 0.17% at 0.6559. USD/JPY up 0.03% at 150.05. AUD/NZD is down 0.13% at 1.0605, The USD/CNY is up 0.06% at 7.1975, and the AUD/SEK is up 0.11% at 6.7937, at the time of writing.

Key Economic Events & Data Release Today:

(EUR) European Central Banking Non-monetary Policy Meeting at 03:00. (CAD) New Housing Price Index (MoM) (Jan) Forecast 0.1%, Previous 0.0% at 08:30. (USD) FOMC Meeting Minutes at 14:00.