. Daily FX Analysis -GBP, EUR, AUD, and USD Face Economic Forces

Daily FX Analysis- GBP, EUR, AUD, and USD Face Economic Forces.

Daily FX Analysis- GBP, EUR, AUD, and USD Face Economic Forces.

03 Oct 2023

Introduction:

In the ever-shifting landscape of global currency markets, GBP/USD finds itself on shaky ground below 1.2100, grappling with multi-month lows due to sustained USD strength. Various factors, including the unexpected BoE pause, are conspiring against the British Pound, making it an attractive prospect for bearish speculators. Meanwhile, EUR/USD is mired near year-to-date lows at 1.0450, with a resurgent US Dollar driven by hawkish Fed expectations and risk aversion. In the Southern Hemisphere, AUD/USD languishes at 11-month lows as the RBA maintains interest rates, while USD/JPY remains below 150.00, awaiting crucial US employment data.

GBP/USD:

GBP/USD seems vulnerable below 1.2100, a multi-month low on sustained buying of USD.

GBP/USD is still in a defensive position close to the multi-month low reached on Tuesday. Several variables work together to push the USD to a new YTD high and drag down the major. The GBP continues to suffer from the BoE’s unexpected pause, which benefits bearish speculators.

Early in the morning in Europe, GBP/USD increased to 1.2220 before losing momentum and finishing negative for the day below 1.2200. Technical buyers may become interested after the pair stabilizes above 1.2200 and establishes that level as support.

The ISM will publish the September Manufacturing PMI survey later in the day. It is expected that the manufacturing sector’s activity will continue to shrink as the headline PMI registers at 47.7.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.2109 | Negative Crossover | Bearish
  • MA 20: 1.2719 Negative Crossover | Bearish
  • MA 50: 1.2291 | Negative Crossover | Bearish

Simple:

  • MA 5: 1.2113 | Negative Crossover | Bearish
  • MA 20: 1.2169 | Negative Crossover | Bearish
  • MA 50: 1.2309 | Negative Crossover | Bearish

RSI (Relative Strength Index): 32.26 | Sell Zone | Bearish

Stochastic Oscillator: 36.31| Sell Zone | Negative

Resistance And Support Levels:

  • R1: 1.2132| R2: 1.2316
  • S1: 1.2047| S2: 1.1892

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.1998 | Take Profit: 1.1892 | Stop Loss: 1.2073

EUR/USD:

EUR/USD is stuck at YTD lows near 1. 0450.

In the early hours of Tuesday morning in Europe, the EUR/USD is trading at YTD lows close to 1.0450. The US Dollar’s upward trend is being supported by hawkish Fed predictions and aversion to risk, which weighs on the pair. A quiet EU economic calendar is followed by attention on US JOLTS Job Openings data.

The EUR/USD dropped below 1.0500 to reach multi-month lows on Monday, extending the downward trend that began during the American session on Friday. The pair remains under pressure after the short-lived rebound.

The unemployment rate in the Eurozone dropped as expected in August, falling from 6.5% to 6.4%. The Manufacturing PMI for the area’s final the reading was confirmed at 43.4. On Tuesday, no data is projected from the Eurozone.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.0498| Negative Crossover | Bearish
  • MA 20: 1.0553 | Negative Crossover | Bearish
  • MA 50: 1.0624 | Negative Crossover | Bearish

Simple:

  • MA 5: 1.0503 | Negative Crossover | Bearish
  • MA 20: 1.0554 | Negative Crossover | Bearish
  • MA 50: 1.0634 | Negative Crossover | Bearish

RSI (Relative Strength Index): 33.78| Sell Zone | Bearish

Stochastic Oscillator: 31.24 | Sell Zone | Negative

Resistance And Support Levels:

  • R1: 1.0619| R2: 1.0758
  • S1: 1.0473| S2: 1.0322

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell 1.0426| Take Profit: 1.0322 | Stop Loss: 1.0503

AUD/USD:

Following RBA’s extension on rate pause, AUD/USD drops to 11-month lows.

Due to a stronger US Dollar, the Australian Dollar continues to lose strength. The RBA keeps its interest rate at 4.10% at this time. According to the Australian Bureau of Statistics, there were more permits issued for new construction projects in August. The US dollar is strengthened by rising US Treasury yields and mixed US statistics.

Tuesday’s increase in the US Dollar (USD) and US Treasury yields causes the Australian Dollar (AUD) to keep falling. In addition, the Reserve Bank of Australia (RBA) decision to raise interest rates has put pressure on the AUD/USD pair.

The Australian dollar may come under pressure if the central bank of Australia maintains the status quo and leaves the current interest rate at 4.10% in its policy meeting on Tuesday.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.6353 | Negative Crossover | Bearish
  • MA 20: 0.6394| Negative Crossover | Bearish
  • MA 50: 0.6413 | Negative Crossover | Bearish

Simple:

  • MA 5: 0.6358 | Negative Crossover | Bearish
  • MA 20: 0.6398 | Negative Crossover | Bearish
  • MA 50: 0.6422| Negative Crossover | Bearish

RSI (Relative Strength Index): 36.61 | Sell Zone | Bearish

Stochastic Oscillator: 14.91| Sell Zone| Negative

Resistance And Support Levels:

  • R1: 0.6450 | R2: 0.6571
  • S1: 0.6316 | S2: 0.6206

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 0.6275 | Take Profit: 0.6196 | Stop Loss: 0.6337

USD/JPY:

The USD/JPY remains below 150.00, awaits US employment data.

USD/JPY is trading below its peak level for the past eleven months. Traders keep an eye out for BoJ action, which might stop the Japanese Yen from losing more money. The US Dollar is supported by rising US Treasury yields.

The market’s concern regarding the trajectory of interest rates set by the US Federal Reserve (Fed) is also boosting confidence in the US Dollar (USD). The demand for the US Dollar as a safe-haven currency may rise as a result of this prudence.

The ADP report will be released on Wednesday, and the Nonfarm Payrolls will be released on Friday. Market participants are anticipating the US employment statistics.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 149.74 | Positive Crossover | Bullish
  • MA 20: 149.24| Positive Crossover | Bullish
  • MA 50: 148.39 | Positive Crossover | Bullish

Simple:

  • MA 5: 149.79 | Positive Crossover | Bullish
  • MA 20: 149.26| Positive Crossover | Bullish
  • MA 50: 148.22| Positive Crossover | Bullish

RSI (Relative Strength Index): 68.56| Buy Zone | Bullish

Stochastic Oscillator: 63.27| Buy | Neutral Zone

Resistance And Support Levels:

  • R1: 149.87 | R2: 152.02
  • S1: 147.88| S2: 145.81

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 150.38 | Take Profit: 152.02 | Stop Loss: 149.18

Elsewhere in the Forex Market

NZD/USD down 0.49% to 0.5916. The USD/CAD up 0.11% to 1.3691. The EUR/GBP up 0.06% at 0.8673. USD/CHF up 0.17% at 0.9198, CAD/JPY down 0.14% at 109.42 The USD/CNY down 0.00% at 7.3015, AUD/SEK down 0.75% at 6.9842, at the time of writing.

Key Economic Events & Data Release Today:

(USD) FOMC Member Mester Speaks at 05:20.

(AUD) RBA Interest Rate Decision (Oct) Actual 4.10%, Forecast 4.10%, Previous 4.10% at 09:00.

(AUD) RBA Rate Statement at 09:00.

(USD) JOLTs Job Openings (Aug) Forecast 8.800M, Previous 8.827M at 19:30.

(EUR) ECB’s Lane Speaks at 11:40.