. Daily FX Analysis - Forex majors brace, traders await CPI.

Daily FX Analysis – Forex majors brace, traders await CPI.

Daily FX Analysis – Forex majors brace, traders await CPI.

11 Mar 2024

Introduction

GBP/USD maintains its position near 1.2850 in early Europe, with the US Dollar pausing its decline amid cautious market sentiment before the crucial US CPI report on Tuesday. The pair, which saw a more than 0.5% rise on Thursday, faces potential overbought conditions as investors await the US February jobs report. Meanwhile, EUR/USD hovers below 1.0950 in the European morning, consolidating after reaching a seven-week high, with attention turning to the upcoming US CPI data. In Australia, the S&P/ASX 200 retreats from all-time highs, leading to a pause in the Australian Dollar’s winning streak, while NZD/USD remains capped below 0.6200 as investors anticipate the US CPI data, following dovish signals from Fed Chair Jerome Powell.

Markets In Focus Today – GBP/USD

GBP/USD holds lower ground near 1.2850.

GBP/USD is holding lower ground near 1.2850 in early Europe on Monday. The US Dollar stalls its losing streak, as markets turn risk-averse ahead of the all-important US CPI report due on Tuesday. Range trade is likely to extend in the day ahead. GBP/USD rose more than 0.5% on Thursday, closing the fifth consecutive trading day in positive territory. The pair continued to edge higher early Friday and touched its highest level since August above 1.2800. The pair’s near-term technical outlook points to overbought conditions as investors gear up for the US February jobs report. On the other hand, a disappointing NFP print could further weigh on the USD. Nevertheless, week-end flows could limit GBP/USD’s upside, especially given the overbought conditions.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2751 | Positive Crossover | Bullish
  • MA 20 : 1.2708 | Positive Crossover | Bullish
  • MA 50 : 1.2667 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2727 | Positive Crossover | Bullish
  • MA 20 : 1.2674 | Positive Crossover | Bullish
  • MA 50 : 1.2678 | Positive Crossover | Bullish

RSI (Relative Strength Index): 71.4747 | Buy Zone | Bullish

Stochastic   Oscillator : 91.1185 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.2735 R2 : 1.2794
  • S1 : 1.2541 S2 : 1.2482

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 1.2823 | Take Profit: 1.2895 | Stop Loss: 1.2783

EUR/USD

EUR/USD treads water below 1.0950 as markets stay cautious.

EUR/USD is trading in a tight range below 1.0950 in the European morning on Monday, extending its sideways movement amid a steady US Dollar and a tepid risk tone. Traders refrain from placing fresh bets on the major ahead of Tuesday’s US CPI data release. EUR/USD extended its rally and reached its highest level in seven weeks above 1.0950. The pair stays in a consolidation phase below 1.0950 as the market focus shifts to the February jobs report from the US. The European Central Bank (ECB) left key rates unchanged following the March policy meeting, as expected. The revised projections showed a downward revision to inflation and growth forecasts for 2024. In the post-meeting press conference, ECB President Christine Lagarde acknowledged that they have started discussing the dialing-back of the restrictive policy stance.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0888 | Positive Crossover | Bullish
  • MA 20 : 1.0859 | Positive Crossover | Bullish
  • MA 50 : 1.0849 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0876 | Positive Crossover | Bullish
  • MA 20 : 1.0832 | Positive Crossover | Bullish
  • MA 50 : 1.0854 | Positive Crossover | Bullish

RSI (Relative Strength Index): 66.1251 | Buy Zone | Bullish

Stochastic   Oscillator : 86.4568 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.0876 R2 : 1.0924
  • S1 : 1.0722 S2 : 1.0674

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 1.0923 | Take Profit: 1.0982 | Stop Loss: 1.0890

AUD/USD

The Australian Dollar could end its winning streak ahead of US CPI.

Australian Dollar halts its winning streak amid a muted US Dollar. Australia’s S&P/ASX 200 Index retreats from all-time highs as investors booked profits. China’s CPI YoY and MoM increased by 0.7% and 1.0%, respectively, in February. US Nonfarm Payrolls rose by 275K in February, surpassing the expected 200K and 229K prior. The Australian Dollar (AUD) snaps its three-day winning streak on Monday, amid a weaker US Dollar (USD). The benchmark S&P/ASX 200 Index witnessed a decline at the beginning of the week, retreating notably from all-time highs as investors booked profits. The drop was particularly pronounced in the materials and healthcare sectors. Additionally, Australian shares followed a decline in technology stocks on Wall Street on Friday, which has tempered the strength of the AUD/USD pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6568 | Positive Crossover | Bullish
  • MA 20 : 0.6555 | Positive Crossover | Bullish
  • MA 50 : 0.6566 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6549 | Positive Crossover | Bullish
  • MA 20 : 0.6538 | Positive Crossover | Bullish
  • MA 50 : 0.6578 | Positive Crossover | Bullish

RSI (Relative Strength Index): 60.0606 | Buy Zone | Bullish

Stochastic   Oscillator : 82.3633 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 0.6580 R2 : 0.6620
  • S1 : 0.6453 S2 : 0.6413

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 0.6578 | Take Profit: 0.6626 | Stop Loss: 0.6548

NZD/USD

NZD/USD remains capped under the 0.6200 barrier, investors await US CPI data.

NZD/USD weakens near 0.6172 despite the softer USD in Monday’s Asian session. The highlight of this week will be the US February CPI, due on Tuesday. The NZD/USD pair remains capped under the 0.6200 barrier during the Asian session on Monday. The downtick of the pair might be limited as the US Dollar (USD) is likely to remain on its back foot after the dovish comments from Federal Reserve (Fed) Chair Jerome Powell and the mixed jobs data last week. At press time, NZD/USD is trading at 0.6172, down 0.03% on the day. Last week, Fed’s Powell suggested that the path for easing policy may not be far off as the US central bank isn’t far from getting the evidence needed to be confident inflation is returning sustainably to the 2% target. The dovish remarks from Powell triggered the expectation for rate cuts in June, with the market now pricing in 100 basis points (bps) of total easing this year. This, in turn, exerts some selling pressure on the Greenback and acts as a tailwind for the NZD/USD pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6144 | Positive Crossover | Bullish
  • MA 20 : 0.6138 | Positive Crossover | Bullish
  • MA 50 : 0.6136 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6128 | Positive Crossover | Bullish
  • MA 20 : 0.6135 | Positive Crossover | Bullish
  • MA 50 : 0.6144 | Positive Crossover | Bullish

RSI (Relative Strength Index): 56.9392 | Buy Zone | Bullish

Stochastic   Oscillator : 71.4158 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.6182 R2 : 0.6224
  • S1 : 0.6044 S2 : 0.6002

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 0.6152 | Take Profit: 0.6210 | Stop Loss: 0.6120

Elsewhere In The Forex Market

USD/JPY was down 0.07% to 146.94, and USD/CHF was down 0.03% to 0.8769. The EUR/GBP is down 0.01% at 0.8546. USD/CAD is down 0.04% at 1.3480. AUD/NZD is down 0.5% at 1.0709, The USD/CNY is down 0.01% at 7.1844, and AUD/SEK is down 0.16% at 6.7560, at the time of writing.

Key Economic Events & Data Release Today:

(AUD) Building Approvals (MoM) Forecast –1.0%, Previous –10.1% at 20:30.