. Daily FX Analysis - Forex market reacts to economic events.

Daily FX Analysis – Forex market reacts to economic events.

Daily FX Analysis – Forex market reacts to economic events.

12 Mar 2024

Introduction

GBP/USD maintains stability near 1.2800 following UK jobs data, with the ILO Unemployment Rate rising to 3.9%. The pair retreated from 1.2860 as rate cut expectations from the Bank of England shifted to August. Investors await US Consumer Price Index (CPI) data. In parallel, EUR/USD clings to gains below 1.0950 amid USD weakness, awaiting US CPI results. NZD/USD holds modest gains around 0.6175-80, with a focus on the US CPI report. USD/CHF hovers above mid-0.8700s as markets await the US February CPI inflation data, while Middle East concerns influence the Swiss Franc.

Markets In Focus Today – GBP/USD

GBP/USD holds steady near 1.2800 after the UK jobs data.

GBP/USD remains sidelined near 1.2800 in the early European session on Tuesday. The data from the UK showed that the ILO Unemployment Rate edged higher to 3.9% from 3.8%, making it difficult for Pound Sterling to gather bullish momentum. GBP/USD pared away some gains on Monday, falling from 1.2860 back into the 1.2800 price handle as markets trim rate cut expectations from the Bank of England (BoE). According to the Union Bank of Switzerland (UBS), the BoE is expected to deliver a first-rate trim in August versus the previously expected May. Investors are looking ahead to Tuesday’s UK labor figures, followed by the US Consumer Price Index (CPI) inflation print. Markets continue to chew on hopes for a rate cut from the BoE and the Federal Reserve (Fed).

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2755 | Positive Crossover | Bullish
  • MA 20 : 1.2714 | Positive Crossover | Bullish
  • MA 50 : 1.2671 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2735 | Positive Crossover | Bullish
  • MA 20 : 1.2683 | Positive Crossover | Bullish
  • MA 50 : 1.2681 | Positive Crossover | Bullish

RSI (Relative Strength Index): 63.7206 | Buy Zone | Bullish

Stochastic   Oscillator : 76.9237 | 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: 1.2791 | Take Profit: 1.2844 | Stop Loss: 1.2760

EUR/USD

EUR/USD clings to gains below 1.0950 ahead of US inflation data.

EUR/USD is holding minor gains below 1.0950 in Tuesday’s European trading. A renewed US Dollar weakness alongside the US Treasury bond yields underpins the pair. However, further upside in EUR/USD hinges on the US CPI data release. The resurgence of a modest rebound in the US Dollar (USD) put EUR/USD under some fresh downside pressure, motivating it to start the new trading week on the defensive and clock its second consecutive day of losses. In the meantime, the USD Index (DXY) managed to regain a small smile and rose to the vicinity of the 103.00 hurdle as investors continued to assess Friday’s publication of US Non-farm Payrolls, where the economy added 275K jobs in February, although the jobless rate ticked higher (3.9%) and wage inflation cooled somewhat.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0894 | Positive Crossover | Bullish
  • MA 20 : 1.0865 | Positive Crossover | Bullish
  • MA 50 : 1.0852 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0883 | Positive Crossover | Bullish
  • MA 20 : 1.0842 | Positive Crossover | Bullish
  • MA 50 : 1.0853 | Positive Crossover | Bullish

RSI (Relative Strength Index): 64.3003 | Buy Zone | Bullish

Stochastic   Oscillator : 75.5346 | Buy Zone | Neutral

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: 1.0986 | Stop Loss: 1.0889

NZD/USD

NZD/USD sticks to modest gains around the 0.6175-80 region, and lacks follow-through ahead of US CPI.

NZD/USD regained positive traction on Tuesday and is supported by subdued USD demand. Traders, however, seem reluctant and look to the key US CPI report for a fresh impetus. The NZD/USD pair attracted some dip-buying during the Asian session on Tuesday, albeit lacks follow-through and remains confined within the previous day’s range. Spot prices currently trade around the 0.6170-0.6175 zone and for now, seem to have stalled the recent pullback from the highest level since February 22 touched last week. The US Dollar (USD) continues with its struggle to attract any meaningful buyers or build on its recovery from a nearly two-month low touched in reaction to mixed US jobs report on Friday amid bets for a shift in the Federal Reserve’s (Fed) policy stance. The markets are now pricing in a greater chance that the US central bank will start cutting interest rates in June, which is reinforced by a further decline in the US Treasury bond yields. This, in turn, keeps the USD bulls on the defensive and lends some support to the NZD/USD pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6148 | Positive Crossover | Bullish
  • MA 20 : 0.6140 | Positive Crossover | Bullish
  • MA 50 : 0.6137 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6128 | Positive Crossover | Bullish
  • MA 20 : 0.6140 | Positive Crossover | Bullish
  • MA 50 : 0.6142 | Positive Crossover | Bullish

RSI (Relative Strength Index): 55.8741 | Buy Zone | Bullish

Stochastic   Oscillator : 69.0636 | Buy Zone | Neutral

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: 0.6151 | Take Profit: 0.6206 | Stop Loss: 0.6120

USD/CHF

USD/CHF oscillates above the mid-0.8700s, and US CPI data looms.

USD/CHF consolidates near 0.8772 in Tuesday’s early European session. Fed officials highlighted that the central bank remained data-dependent before they were confident that inflation is sustainably returning 2% target. The rising concerns in the Middle East could lift the Swiss Franc, a safe-haven currency. Market players will closely monitor the US February CPI inflation data on Tuesday. The USD/CHF pair trades sideways above the mid-0.8700s during the early European session on Tuesday. Investors prefer to wait on the sidelines ahead of the key US inflation report later in the day. In the meantime, a cautious mood in the market could provide some support to the Swiss Franc (CHF). USD/CHF currently trades around 0.8772, unchanged for the day.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.8793 | Negative Crossover | Bearish
  • MA 20 : 0.8785 | Negative Crossover | Bearish
  • MA 50 : 0.8747 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.8806 | Negative Crossover | Bearish
  • MA 20 : 0.8806 | Negative Crossover | Bearish
  • MA 50 : 0.8699 | Positive Crossover | Bullish

RSI (Relative Strength Index): 49.7221 | Buy Zone | Bullish

Stochastic   Oscillator : 26.6012 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.8888 R2 : 0.8966
  • S1 : 0.8634 S2 : 0.8556

Overall Sentiment: Neutral Market Direction: Sell

Trade Suggestion: Limit Sell: 0.8779 | Take Profit: 0.8704 | Stop Loss: 0.8833

Elsewhere In The Forex Market

USD/JPY up 0.29% to 147.35, The AUD/USD up 0.04% to 0.6616. The EUR/GBP is down 0.01% at 0.8546. USD/CAD is down 0.08% at 1.3472. AUD/NZD is up 0.9% at 1.0723, The USD/CNY is down 0.08% at 7.1758, and the AUD/SEK is up 0.19% at 6.7732, at the time of writing.

Key Economic Events & Data Release Today:

(GBP) Average Earnings Index + Bonus (Jan) Forecast 5.7%, Previous 5.8% at 03:00. (EUR) German CPI (MoM) (Feb) Forecast 0.4%, Previous 0.2% at 03:00. (USD) Core CPI (MoM) (Feb) Forecast 0.3%, Previous 0.4% at 08:30. (USD) CPI (MoM) (Feb) Forecast 0.4%, Previous 0.3% at 08:30. (USD) CPI (YoY) (Feb) Forecast 3.1%, Previous 3.1% at 08:30.