. Daily FX Analysis - GBP/USD Close to 1.2100, USD/JPY Below 150.00, EUR/USD Resilient

Daily FX Analysis – GBP/USD Close to 1.2100, USD/JPY Below 150.00, EUR/USD Resilient

Daily FX Analysis – GBP/USD Close to 1.2100, USD/JPY Below 150.00, EUR/USD Resilient

25 Oct 2023

Introduction:

In the dynamic world of currency markets, let’s take a quick look at some key developments. GBP/USD is on a downward trajectory, touching 1.2100 as market sentiment sours. Meanwhile, EUR/USD has reclaimed the 1.0600 level, thanks to a positive German IFO survey. Over in Australia, the AUD/USD pair is making gains after strong inflation data. And USD/JPY is hovering below the 150.00 mark, benefiting from a stable US dollar and the Japanese Prime Minister’s cautious approach. We’ll also explore what’s on the horizon, including important economic data releases for the US and Japan.

GBP/USD:

GBP/USD drifts lower towards 1.2100 as sentiment sours.

The GBP/USD currency pair is gradually declining towards the 1.2100 level, erasing some of its earlier gains during Wednesday’s European trading hours. The pair is facing downward pressure due to a general resurgence of the US Dollar, triggered by concerns about economic growth and rising US Treasury bond yields.

After reaching a high near 1.2300 earlier in the day, GBP/USD lost its upward momentum and settled around 1.2250, remaining relatively stable for the day. Despite this recent setback, the technical analysis indicates that the bullish sentiment remains intact.

Additionally, market participants will closely monitor the performance of US stocks during the American trading session. Should risk aversion continue to dominate financial markets, GBP/USD may begin to move upward.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.2168 | Negative Crossover | Bearish
  • MA 20: 1.2175 | Negative Crossover | Bearish
  • MA 50: 1.2197 | Negative Crossover | Bearish

Simple:

  • MA 5: 1.2186 | Negative Crossover | Bearish
  • MA 20: 1.2166 | Negative Crossover | Bearish
  • MA 50: 1.2188| Negative Crossover | Bearish

RSI (Relative Strength Index): 44.13| Neutral Zone | Neutral

Stochastic Oscillator: 25.4| Sell Zone | Negative

Resistance And Support Levels:

  • R1: 1.2300| R2: 1.2458
  • S1: 1.2127| S2: 1.1903

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.2046 | Take Profit: 1.1903 | Stop Loss: 1.2154

EUR/USD:

EUR/USD retakes 1.0600 after upbeat German IFO survey.

In the European trading session on Wednesday, EUR/USD is once again testing the 1.0600 level. The Euro is experiencing renewed demand following the release of Germany’s IFO survey, which indicated an improvement in business sentiment for October.

After suffering significant losses against the US Dollar on Tuesday, EUR/USD appears to be consolidating around the 1.0600 mark early on Wednesday. The pair’s technical analysis suggests a lack of interest from buyers, but market activity may remain subdued in anticipation of the European Central Bank’s (ECB) upcoming monetary policy announcements scheduled for Thursday.

In the early hours of Wednesday, the US Dollar is maintaining its position, with risk sentiment turning negative as evidenced by declining US stock index futures.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.0601| Negative Crossover | Bearish
  • MA 20: 1.0591| Negative Crossover | Bearish
  • MA 50: 1.0583 | Negative Crossover | Bearish

Simple:

  • MA 5: 1.0613 | Negative Crossover | Bearish
  • MA 20: 1.0584 | Negative Crossover | Bearish
  • MA 50: 1.0559 | Negative Crossover | Bearish

RSI (Relative Strength Index): 49.11| Buy Zone | Bullish

Stochastic Oscillator: 24.86| Sell zone | Negative

Resistance And Support Levels:

  • R1: 1.0671| R2: 1.0787
  • S1: 1.0573| S2: 1.0443

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.0536| Take Profit: 1.0443 | Stop Loss: 1.0608

AUD/USD:

AUD/USD trims some of its intraday gains post upbeat inflation data.

The Australian Dollar is on the rise, approaching a significant threshold, following the release of robust Australian Consumer Price Index (CPI) data. In the third quarter, Australia’s CPI surged to 1.2%, surpassing the market’s anticipated figure of 1.1%.

This positive development has raised expectations that the Reserve Bank of Australia (RBA) will implement a 25-basis point interest rate hike at its November meeting. On the other hand, the US Dollar found support in optimistic Purchasing Managers’ Index (PMI) data from the United States.

Investors will pay keen attention to RBA Governor Bullock’s statements about the state of the Australian economy as she provides testimony before the Senate Economics Legislative Committee in Canberra this Thursday.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.6354 | Negative Crossover | Bearish
  • MA 20: 0.6343| Negative Crossover | Bearish
  • MA 50: 0.6356 | Negative Crossover | Bearish

Simple:

  • MA 5: 0.6354 | Negative Crossover | Bearish
  • MA 20: 0.6338 | Positive Crossover | Bullish
  • MA 50: 0.6349| Negative Crossover | Bearish

RSI (Relative Strength Index): 50.03| Buying Zone| Bullish

Stochastic Oscillator: 79.83| Buy Zone | Negative

Resistance And Support Levels:

  • R1: 0.6430| R2: 0.6526
  • S1: 0.6343 | S2: 0.6230

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 0.6303 | Take Profit: 0.6230 | Stop Loss: 0.6360

USD/JPY:

USD/JPY hovers below 150.00 as US dollar stabilizes post recent gains.

USD/JPY is in a consolidation phase below the 150.00 level, with the US Dollar remaining steady following its recent advances. Japanese Prime Minister Kishida chose not to impact the JPY through verbal interventions.

The Bank of Japan’s (BoJ) measures, along with the USD/JPY approaching the critical 150 level, might not convey a comprehensive effort by the government to address the inflation issue.

Investors are expected to closely monitor the US Q3 Gross Domestic Product (GDP) report on Thursday, while giving particular attention to the US Core Personal Consumption Expenditures (PCE) and Japan’s Tokyo Consumer Price Index (CPI) data, which are slated for release on Friday.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 149.83 | Positive Crossover | Bullish
  • MA 20: 149.73| Positive Crossover | Bullish
  • MA 50: 149.40| Positive Crossover | Bullish

Simple:

  • MA 5: 149.79 | Positive Crossover | Bullish
  • MA 20: 149.79| Positive Crossover | Bullish
  • MA 50: 149.40| Positive Crossover | Bullish

RSI (Relative Strength Index): 57.48| Buy Zone | Bullish

Stochastic Oscillator: 54.3| Buy | Positive

Resistance And Support Levels:

  • R1: 149.87| R2: 152.11
  • S1: 148.14| S2: 146.16

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 150.38| Take Profit: 152.11 | Stop Loss: 149.35

Elsewhere in the Forex Market

NZD/USD up 0.11% to 0.5844. The USD/CAD up 0.11% to 1.3756. The USD/CHF up 0.12% at 0.8941. EUR/GBP up 0.18% at 0.8723, EUR/JPY up 0.03% at 158.76., The USD/CNY up 0.09% at 7.3157, AUD/SEK up 0.23% at 7.0832, at the time of writing.

Key Economic Events & Data Release Today:

(AUD) CPI (QoQ) (Q3) Actual 1.2%, Forecast 1.1%, Previous 0.8% at 06:00.

(USD) Building Permits Forecast 1.473M, Previous 1.541M at 17:30.

(USD) New Home Sales (Sep) Forecast 680K, Previous 675K at 19:30.

(CAD) BoC Interest Rate Decision Forecast 5.00%, Previous 5.00% at 19:30.

(USD) Crude Oil Inventories Forecast 0.239M, Previous –4.491M at 20:00.

(EUR) ECB president Lagarde Speaks at 22:30