. Daily FX Analysis - Forex majors navigate challenges in tranquil holiday markets.

Daily FX Analysis – Forex majors navigate challenges in tranquil holiday markets.

Daily FX Analysis – Forex majors navigate challenges in tranquil holiday markets.

15 Jan 2024

Introduction

Amid light trading, the EUR/USD holds firm above 1.0950 in early Europe, supported by a weaker US Dollar and cautious optimism. With a lack of significant economic data and a US holiday, risk sentiment plays a crucial role. Meanwhile, GBP/USD hovers near 1.2750, facing challenges from weaker US bond yields, UK recession risks, and geopolitical tensions. The Australian Dollar recovered losses on a subdued US Dollar and improved job advertisements. USD/JPY trades higher near 145.40, gaining support from risk aversion and potential BOJ inflation projections. The market anticipates a quiet day with Martin Luther King Jr. Day observance.

Markets In Focus Today – EUR/USD

EUR/USD trades firm above 1.0950 amid light trading.

EUR/USD is posting small gains while defending 1.0950 in early Europe on Monday. A broadly softer US Dollar and cautious optimism lend support to the pair. Due to the lack of top-tier economic data and a holiday in the US, risk sentiment is set to play a pivotal role ahead. EUR/USD remained inside Thursday’s trading range of 1.0930-1.1000 in Friday’s trading session. The upside remained capped as the European Central Bank (ECB) announced an end to the elongated rate-tightening regime while stubbornly higher consumer price inflation in the United States provided a cushion at the downside. The pair continues to trade listless inside Friday’s trading range on Monday due to an extended weekend in the US economy amid Martin Luther King’s Birthday

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.10 | Negative Crossover | Bearish
  • MA 20 : 1.10 | Positive Crossover | Bullish
  • MA 50 : 1.09 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.09 | Positive Crossover | Bullish
  • MA 20 : 1.10 | Negative Crossover | Bearish
  • MA 50 : 1.09 | Positive Crossover | Bullish

RSI (Relative Strength Index): 52.06 | Buy Zone | Bullish

Stochastic   Oscillator : 31.82 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.11 R2 : 1.12
  • S1 : 1.08 S2 : 1.07

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 1.0955 | Take Profit: 1.1037 | Stop Loss: 1.0909

GBP/USD

GBP/USD holds steady near 1.2750 on the subdued US Dollar.

GBP/USD is treading water near 1.2750 in the European morning on Monday. The US Dollar stays defensive due to weaker US bond yields and holiday-thinned market conditions. Mounting UK recession risks and geopolitical tensions cap the pair’s upside. GBP/USD reversed its direction after dipping below 1.2700 and closed in positive territory above 1.2750 on Thursday. The positive shift seen in risk mood supports the pair on Friday as markets await Producer Price Index (PPI) data from the US. Inflation figures provided a boost to the US Dollar (USD) with the initial reaction but they seemingly failed to persuade markets that the Federal Reserve (Fed) could refrain from lowering the policy rate in March.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.27 | Positive Crossover | Bullish
  • MA 20 : 1.27 | Positive Crossover | Bullish
  • MA 50 : 1.26 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.27 | Positive Crossover | Bullish
  • MA 20 : 1.27 | Positive Crossover | Bullish
  • MA 50 : 1.26 | Positive Crossover | Bullish

RSI (Relative Strength Index): 56.43 | Buy Zone | Bullish

Stochastic   Oscillator : 65.28 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.28 R2 : 1.29
  • S1 : 1.26 S2 : 1.25

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 1.2728 | Take Profit: 1.2803 | Stop Loss: 1.2662

AUD/USD

The Australian Dollar moves below the psychological level ahead of Aussie Consumer Confidence.

Australian Dollar retraces its losses on risk-on sentiment. Australian job advertisements improved by 0.1% in December from the 4.6% prior. The US Dollar remains steady despite downbeat US bond yields. The Australian Dollar (AUD) attempts to recover its losses on Monday after a decline in the previous two sessions. The Australian Dollar gains ground on a softer US Dollar (USD) amid subdued US Treasury yields. The market is anticipated to be relatively quiet regarding US economic data due to the observance of Martin Luther King Jr. Day on Monday.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.67 | Negative Crossover | Bearish
  • MA 20 : 0.67 | Negative Crossover | Bearish
  • MA 50 : 0.66 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.67 | Negative Crossover | Bearish
  • MA 20 : 0.68 | Negative Crossover | Bearish
  • MA 50 : 0.66 | Positive Crossover | Bullish

RSI (Relative Strength Index): 46.10 | Buy Zone | Bullish

Stochastic   Oscillator : 44.39 | Neutral Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.69 R2 : 0.69
  • S1 : 0.66 S2 : 0.65

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 0.6643 | Take Profit: 0.6728 | Stop Loss: 0.6594

USD/JPY

USD/JPY halts its losses despite downbeat US Treasury yields, trades higher near 145.40.

USD/JPY gains ground on improved US Dollar. Risk-averse sentiment contributes support to strengthening the Greenback. BOJ is expected to maintain its inflation projection near 2.0% target in the coming years. Moreover, the Greenback also faces a challenge on downbeat US Treasury yields, which could be attributed to the weaker-than-expected Producer Price Index (PPI) data from the United States (US). On Friday, reports indicated that the Bank of Japan (BOJ) is likely to lower its core inflation forecast for the fiscal year 2024 due to the recent decline in oil prices.Japan’s Consumer Price Index (CPI) data will be observed on Friday by the traders. On the US docket, traders will likely observe the Retail Sales data on Wednesday and housing data on Thursday.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 144.49 | Positive Crossover | Bullish
  • MA 20 : 144.19 | Positive Crossover | Bullish
  • MA 50 : 145.24 | Positive Crossover | Bullish

Simple :

  • MA 10 : 144.46 | Positive Crossover | Bullish
  • MA 20 : 143.31 | Positive Crossover | Bullish
  • MA 50 : 145.99 | Negative Crossover | Bearish

RSI (Relative Strength Index): 56.16 | Buy Zone | Bullish

Stochastic   Oscillator : 80.33 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 146.29 R2 : 148.19
  • S1 : 140.10 S2 : 138.19

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 144.97 | Take Profit: 146.64 | Stop Loss: 144.08

Elsewhere In The Forex Market

EUR/GBP up 0.16% to 0.8596. The NZD/USD was down 0.06% to 0.6200. The USD/CHF is up 0.06% at 0.8525. USD/CAD is down 0.10% at 1.3408. EUR/JPY is down 0.14% at 159.09, The USD/CNY is up 0.10% at 7.1734, and the AUD/SEK is up 0.09% at 6.8807, at the time of writing.

Key Economic Events & Data Release Today:

(EUR) Industrial Production (MoM) (Nov) Forecast -0.3%, Previous –0.7% at 15:30. (CAD) Manufacturing Sales (MoM) Forecast 1.0%, Previous –2.8% at 19:00. (CAD) Wholesale Sales (MoM) (Nov) Forecast 0.8%, Previous –0.5% at 19:00.