. Daily FX Analysis - GBP, EUR, AUD, USD/JPY challenges, insights.

Daily FX Analysis – GBP, EUR, AUD, USD/JPY challenges, insights.

Daily FX Analysis – GBP, EUR, AUD, USD/JPY challenges, insights.

16 Feb 2024

Introduction

GBP/USD maintains stability around 1.2600 after UK retail sales data. Despite a 3.4% monthly increase in retail sales in the UK, Pound Sterling struggles to gain momentum. Meanwhile, EUR/USD faces bearish pressures near 1.0750, impacted by renewed US Dollar demand and dovish ECB comments. The US Dollar steadies after recent losses, influencing the Australian Dollar’s attempt to move into positive territory. Japanese Yen faces challenges near daily lows against USD due to uncertainty about the Bank of Japan’s policy shift and risk-on sentiment.

Markets In Focus Today – GBP/USD

GBP/USD holds steady near 1.2600 after UK data.

GBP/USD continues to fluctuate at around 1.2600 in the early European session on Friday. The data from the UK showed that Retail Sales rose 3.4% every month but failed to provide a boost to Pound Sterling. Focus shifts to US January PPI figures. The Pound Sterling (GBP) climbed during the North American session following a soft retail sales report that lifted the major from a crucial technical level. Consequently, the Greenback (USD) is on the defensive as the GBP/USD trades at 1.2586, up 0.17%, after jumping off a daily low of 1.2541. Pound Sterling edges high amid mixed US economic reports, BoE’s rate cut estimates.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2608 | Negative Crossover | Bearish
  • MA 20 : 1.2633 | Negative Crossover | Bearish
  • MA 50 : 1.2630 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2596 | Negative Crossover | Bearish
  • MA 20 : 1.2648 | Negative Crossover | Bearish
  • MA 50 : 1.2674 | Negative Crossover | Bearish

RSI (Relative Strength Index): 43.0909 | Neutral Zone | Neutral

Stochastic   Oscillator : 25.0329 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.2763 R2 : 1.2807
  • S1 : 1.2618 S2 : 1.2574

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Buy: 1.2604 | Take Profit: 1.2537 | Stop Loss: 1.2650

EUR/USD

EUR/USD keeps the bearish tone intact near 1.0750, US data eyed.

EUR/USD is trading on a softer note near 1.0750 in European trading on Friday. The renewed US Dollar demand and dovish comments from the ECB policymakers weigh on the pair. The focus now shifts to ECB-speak and US data. Another moderate decline in the US dollar (USD) led to a further advance in risk-oriented assets on Thursday, sponsoring extra gains in EUR/USD to the proximity of the key barrier at 1.0800 the figure. The decline in the Greenback coincided with a modest decrease in US bond yields across different maturities, all against the backdrop of steady speculation of a potential interest rate cut by the Federal Reserve (Fed) later in the year.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0767 | Negative Crossover | Bearish
  • MA 20 : 1.0799 | Negative Crossover | Bearish
  • MA 50 : 1.0838 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0757 | Positive Crossover | Bullish
  • MA 20 : 1.0801 | Negative Crossover | Bearish
  • MA 50 : 1.0890 | Negative Crossover | Bearish

RSI (Relative Strength Index): 42.3836 | Neutral Zone | Neutral

Stochastic   Oscillator : 28.8230 | Sell Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.0982 R2 : 1.1041
  • S1 : 1.0790 S2 : 1.0731

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Buy: 1.0787 | Take Profit: 1.0726 | Stop Loss: 1.0826

AUD/USD

Australian Dollar attempts to move into positive territory ahead of US PPI data.

The Australian Dollar depreciates as the US Dollar attempts to hold ground after recent losses. Australian employment data suggests that the RBA will avoid an interest rate hike in March. US Dollar holds ground over market sentiment suggesting that the Fed will postpone rate cuts in the upcoming meeting. The Australian Dollar (AUD) attempts to move into positive territory after trimming intraday losses on Monday. However, the US Dollar (USD) gains ground on improved US Treasury yields. The AUD/USD pair received upward support after mixed economic data from the United States (US). Additionally, the Aussie Dollar received upward support as the S&P/ASX 200 index improved following the overnight surge in Wall Street. Investors remain optimistic ahead of US Producer Price Index (PPI) data and Michigan Consumer Sentiment Index due on Friday.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6516 | Positive Crossover | Bullish
  • MA 20 : 0.6543 | Positive Crossover | Bullish
  • MA 50 : 0.6579 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6506 | Positive Crossover | Bullish
  • MA 20 : 0.6540 | Positive Crossover | Bullish
  • MA 50 : 0.6640 | Negative Crossover | Bearish

RSI (Relative Strength Index): 44.1664 | Neutral Zone | Neutral

Stochastic   Oscillator : 37.5734 | Sell Zone | Positive

Resistance   And Support Levels :

  • R1 : 0.6763 R2 : 0.6837
  • S1 : 0.6524 S2 : 0.6449

Overall Sentiment: Neutral Market Direction: Buy

Trade Suggestion: Limit Buy: 0.6527 | Take Profit: 0.6596 | Stop Loss: 0.6488

USD/JPY

Japanese Yen struggles near daily low against USD, intervention fears help limit losses.

The Japanese Yen stalls a two-day-old recovery trend from the YTD low touched on Tuesday. A positive risk tone and the uncertainty about BoJ’s policy shift undermine the safe-haven JPY. Reviving bets for an early rate cut by the Fed to cap the USD and act as a headwind for USD/JPY. The Japanese Yen (JPY) comes under some renewed selling pressure on Friday and remains depressed against its American counterpart heading into the European session, though managed to hold above the YTD low touched earlier this week. Data released on Thursday showed that Japan’s economy unexpectedly contracted again during the fourth quarter, confirming a technical recession. This raises the uncertainty about the likely timing of when the Bank of Japan (BoJ) will exit the negative interest rates policy, which, along with the prevalent risk-on mood, is seen weighing on the safe-haven JPY.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 149.4912 | Positive Crossover | Bullish
  • MA 20 : 148.5892 | Positive Crossover | Bullish
  • MA 50 : 147.3505 | Positive Crossover | Bullish

Simple :

  • MA 10 : 149.4204 | Positive Crossover | Bullish
  • MA 20 : 148.5328 | Positive Crossover | Bullish
  • MA 50 : 145.7908 | Positive Crossover | Bullish

RSI (Relative Strength Index): 64.2103 | Buy Zone | Bullish

Stochastic   Oscillator : 87.2911 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 148.5761 R2 : 150.4646
  • S1 : 142.4626 S2 : 140.5741

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 150.62 | Take Profit: 151.88 | Stop Loss: 149.93

Elsewhere In The Forex Market

EUR/GBP up 0.07% to 0.8555. The USD/CHF up 0.18% to 0.8814. The USD/CAD is up 0.11% at 1.3480. NZD/USD down 0.08% at 0.6099. AUD/NZD up 0.07% at 1.0688, The USD/CNY down 0.01% at 7.1936, AUD/SEK down 0.01% at 6.8207, at the time of writing.

Key Economic Events & Data Release Today:

(GBP) Retail Sales (MoM) (Jan) Forecast 1.5%, Previous –3.2% at 02:00. (CAD) Wholesale Sales (MoM) (Dec) Forecast 0.7%, Previous 0.9% at 08:30. (USD) Building Permits (Jan) Forecast 1.509M, Previous 1.493M at 08:30. (USD) PPI (MoM) (Jan) Forecast 0.1%, Previous –0.1% at 08:30.