. Daily FX Analysis - Forex pairs stabilize, await economic cues.

Daily FX Analysis – Forex pairs stabilize, await economic cues.

Daily FX Analysis – Forex pairs stabilize, await economic cues.

13 Mar 2024

Introduction

GBP/USD steadied near 1.2800 before the UK GDP data release, exhibiting minimal movement in early European trading on Wednesday. Meanwhile, EUR/USD maintains stability above 1.0900, with a focus on mid-tier EU data and ECB commentary. USD/CHF remains stagnant below 0.8800 amid anticipation of US Retail Sales data. Additionally, the Japanese Yen hovers near weekly lows against the USD as traders evaluate Japan’s wage hike information.

Markets In Focus Today – GBP/USD

GBP/USD consolidates near 1.2800 ahead of UK GDP data.

GBP/USD is trading modestly flat near 1.2800 in early Europe on Wednesday, consolidating the previous rebound from the weekly low. Traders refrain from placing fresh bets ahead of the UK monthly GDP and industrial figures. GBP/USD came under bearish pressure on Monday and registered daily losses for the first time this month. The pair stays on the back foot early Tuesday and trades in negative territory below 1.2800 ass market focus shifts to US February inflation data. February inflation data might not be able to alter the market pricing of the Federal Reserve’s interest rate outlook. Nevertheless, a stronger-than-expected increase in the monthly Core CPI could help the USD gather strength with the immediate reaction.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2760 | Positive Crossover | Bullish
  • MA 20 : 1.2720 | Positive Crossover | Bullish
  • MA 50 : 1.2675 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2747 | Positive Crossover | Bullish
  • MA 20 : 1.2693 | Positive Crossover | Bullish
  • MA 50 : 1.2683 | Positive Crossover | Bullish

RSI (Relative Strength Index): 61.7919 | Buy Zone | Bullish

Stochastic   Oscillator : 67.9138 | Buy Zone | Neutral

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: 1.2783 | Take Profit: 1.2825 | Stop Loss: 1.2759

EUR/USD

EUR/USD trades sideways above 1.0900, mid-tier EU data, ECB-speak-eyed.

EUR/USD is oscillating in a narrow band above 1.0900 in the European morning on Wednesday. The US Dollar struggles to extend the rebound inspired by hot US CPI data, underpinning the pair ahead of mid-tier EU data and ECB-speak. The steady resurgence of the US Dollar (USD) exerted fresh downward pressure on EUR/USD, leading it to extend the decline for the third session in a row and revisit the proximity of the 1.0900 support. Looking at the broader macroeconomic landscape, both the Federal Reserve (Fed) and the European Central Bank (ECB) are expected to commence their easing cycles early in the summer, likely in June. However, the pace of subsequent interest rate cuts could differentiate the approaches of both central banks. Nonetheless, the ECB is unlikely to lag far behind the Fed.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0898 | Positive Crossover | Bullish
  • MA 20 : 1.0870 | Positive Crossover | Bullish
  • MA 50 : 1.0854 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0891 | Positive Crossover | Bullish
  • MA 20 : 1.0852 | Positive Crossover | Bullish
  • MA 50 : 1.0853 | Positive Crossover | Bullish

RSI (Relative Strength Index): 63.0206 | Buy Zone | Bullish

Stochastic   Oscillator : 70.3387 | 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: 1.0915 | Take Profit: 1.0978 | Stop Loss: 1.0881

USD/CHF

USD/CHF flat-lines below 0.8800, US Retail Sales eyed.

USD/CHF traded sideways around 0.8776 in Wednesday’s Asian session. The US CPI figure climbed 3.2% from a year earlier in February vs. 3.1% prior. The rising Middle East geopolitical tensions and risk-averse environment could lift the CHF. Traders will watch the Swiss Producer and Import Prices and US Retail Sales February, due on Thursday. The USD/CHF pair remains confined in a narrow trading range of 0.8765-0.8780 during the Asian trading hours on Wednesday. The stronger-than-expected US CPI inflation data in February lifted the US Dollar (USD). Nonetheless, the risk-averse environment might boost safe-haven demand and benefit the Swiss Franc (CHF). The pair currently trades near 0.8776, adding 0.02% on the day.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.8791 | Negative Crossover | Bearish
  • MA 20 : 0.8785 | Negative Crossover | Bearish
  • MA 50 : 0.8748 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.8805 | Negative Crossover | Bearish
  • MA 20 : 0.8802 | Negative Crossover | Bearish
  • MA 50 : 0.8705 | Positive Crossover | Bullish

RSI (Relative Strength Index): 50.9942 | Buy Zone | Bullish

Stochastic   Oscillator : 27.5425 | Sell Zone | Positive

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: 0.8783 | Take Profit: 0.8715 | Stop Loss: 0.8836

USD/JPY

Japanese Yen hangs near the weekly low against the USD as traders assess Japan’s wage hike data.

The Japanese Yen attracts some buyers following the overnight fall to the weekly low. Positive news on wage hikes revives BoJ rate hike bets and lends some support to the JPY. The USD fades the warmer US CPI-led spike and fails to provide impetus to USD/JPY. The Japanese Yen (JPY) struggles to capitalize on its modest intraday gains and turns lower for the second straight day on Tuesday, albeit manages to hold its neck above the weekly low touched against its American counterpart the previous day. The overnight dovish remarks by the Bank of Japan (BoJ) Governor Kazuo Ueda cooled bets for an early interest rate hike. Apart from this, the underlying strong bullish sentiment across the global equity markets turns out to be a key factor acting as a headwind for the safe-haven JPY. The downside, however, seems limited amid bets for an imminent shift in the BoJ’s policy stance.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 148.4293 | Negative Crossover | Bearish
  • MA 20 : 148.8531 | Negative Crossover | Bearish
  • MA 50 : 148.3224 | Negative Crossover | Bearish

Simple :

  • MA 10 : 148.7356 | Negative Crossover | Bearish
  • MA 20 : 149.5280 | Negative Crossover | Bearish
  • MA 50 : 148.2383 | Negative Crossover | Bearish

RSI (Relative Strength Index): 41.0794 | Neutral Zone | Neutral

Stochastic   Oscillator : 21.6563 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 150.8153 R2 : 151.9920
  • S1 : 147.0060 S2 : 145.8293

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 147.79 | Take Profit: 146.34 | Stop Loss: 148.79

Elsewhere In The Forex Market

NZD/USD up 0.22% to 0.6163, The AUD/USD up 0.13% to 0.6614. The EUR/GBP is down 0.01% at 0.8546. USD/CAD is up 0.01% at 1.3492. AUD/NZD was down 0.06% at 1.0730, The USD/CNY was up 0.15% at 7.1904, and AUD/SEK was up 0.13% at 6.7709, at the time of writing.

Key Economic Events & Data Release Today:

(GBP) Manufacturing Production (MoM) (Jan) Forecast 0.0%, Previous 0.8% at 12:30. (GBP) GDP (YoY) (Jan) Forecast –0.3%, Previous 0.0% at 12:30. (GBP) GDP (MoM) (Jan) Forecast 0.2%, Previous –0.1% at 12:30. (EUR) Industrial Production (MoM) (Jan) Forecast –1.8%, Previous 2.6% at 06:00. (USD) Crude Oil Inventories Forecast 0.900M, Previous 1.367M at 10:30.