. Daily FX Analysis - GBP/USD drops, EUR/USD navigates, NZD/USD strengthens, USD/CHF soars.

Daily FX Analysis – GBP/USD drops, EUR/USD navigates, NZD/USD strengthens, USD/CHF soars.

Daily FX Analysis – GBP/USD drops, EUR/USD navigates, NZD/USD strengthens, USD/CHF soars.

19 Jan 2024

Introduction

GBP/USD faces pressure, dropping towards 1.2650 after disappointing UK Retail Sales data. The pair grapples with a resurgent US Dollar and cautious market sentiment, awaiting crucial US data and Federal Reserve speeches. Meanwhile, EUR/USD remains stable below 1.0900, monitoring ECB President Lagarde’s speech. NZD/USD gains strength above 0.6100, while USD/CHF rises to nearly 0.8680 on SNB Chairman’s concerns about the appreciating Swiss Franc. Market dynamics continue to evolve as traders brace for upcoming economic indicators and central bank communications.

Markets In Focus Today – GBP/USD

GBP/USD drops toward 1.2650 after UK Retail Sales data.

GBP/USD is dropping toward 1.2650, under intense selling pressure after the UK Retail Sales dropped more than expected in December. The pair is also feeling the heat from a pause in the US Dollar decline, as sentiment remains tepid ahead of top-tier US data, Fedspeak. GBP/USD reversed its direction after dipping below 1.2700 and closed in positive territory above 1.2750 on Thursday. The positive shift seen in risk mood supports the pair on Friday as markets await Producer Price Index (PPI) data from the US. Inflation figures provided a boost to the US Dollar (USD) with the initial reaction but they seemingly failed to persuade markets that the Federal Reserve (Fed) could refrain from lowering the policy rate in March.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.27 | Negative Crossover | Bearish
  • MA 20 : 1.27 | Negative Crossover | Bearish
  • MA 50 : 1.26 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.27 | Negative Crossover | Bearish
  • MA 20 : 1.27 | Negative Crossover | Bearish
  • MA 50 : 1.26 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 49.84 | Neutral Zone | Neutral

Stochastic   Oscillator : 47.09 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.28 R2 : 1.29
  • S1 : 1.26 S2 : 1.25

Overall Sentiment : Neutral Market Direction : Buy

Trade Suggestion : Limit Buy : 1.2655 | Take Profit : 1.2754 | Stop Loss : 1.2595

EUR/USD

EUR/USD holds steady below 1.0900 ahead of Lagarde speech.

EUR/USD is holding steady below 1.0900 in European trading on Friday. A modest uptick in the US Dollar alongside the US Treasury bond yields, amid a cautious mood, is weighing on the pair. ECB Lagarde’s speech and US data awaited. The EUR/USD pair oscillates in a narrow range through the early European session on Friday and remains within the striking distance of over a one-month trough touched on Wednesday. Furthermore, ECB President Christine Lagarde declined to push back against bets for a cumulative of over 150 basis points (bps) rate cuts this year. Lagarde, however, cautioned against premature optimism in markets amid a rise in the Eurozone inflation, to the 2.9% YoY rate in December.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.09 | Negative Crossover | Bearish
  • MA 20 : 1.09 | Negative Crossover | Bearish
  • MA 50 : 1.09 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.09 | Negative Crossover | Bearish
  • MA 20 : 1.10 | Negative Crossover | Bearish
  • MA 50 : 1.09 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 42.65 | Neutral Zone | Neutral

Stochastic   Oscillator : 15.01 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.11 R2 : 1.12
  • S1 : 1.08 S2 : 1.07

Overall Sentiment : Neutral Market Direction : Buy

Trade Suggestion : Limit Buy : 1.0849 | Take Profit : 1.0928 | Stop Loss : 1.0799

NZD/USD

NZD/USD gathers strength above the 0.6100 mark, Michigan sentiment data looms.

NZD/USD gains ground near 0.6120, adding 0.13% for the day.US Initial Jobless Claims reached their lowest level since September 2022.New Zealand’s Business NZ PMI eased to 43.1 in December from November’s 46.7. The NZD/USD pair trades on a positive note during the early Asian session on Friday. The pair finds support near the 100-day Exponential Moving Average (EMA) at 0.6115 and currently trades around 0.6120. The New Zealand Consumer Price Index (CPI) next week will be a closely watched event and could offer hints about further monetary policy updates from the Reserve Bank of New Zealand (RBNZ).

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.62 | Negative Crossover | Bearish
  • MA 20 : 0.62 | Negative Crossover | Bearish
  • MA 50 : 0.62 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.62 | Negative Crossover | Bearish
  • MA 20 : 0.62 | Negative Crossover | Bearish
  • MA 50 : 0.62 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 32.71 | Sell Zone | Bearish

Stochastic   Oscillator : 9.42 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.64 R2 : 0.64
  • S1 : 0.61 S2 : 0.61

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Stop Sell : 0.6098 | Take Profit : 0.6021 | Stop Loss : 0.6157

USD/CHF

USD/CHF rises to near 0.8680, SNB Chairman concerns about appreciated Swiss Franc.

USD/CHF continues to gain ground after nervous comments from the SNB Chairman.SNB Chairman Thomas Jordan is concerned that excessive appreciation of CHF could drive inflation below zero.US Dollar gained ground on the diminished possibility of Fed rate cuts in March. USD/CHF seems to continue its winning streak that began on January 11. On Thursday, Swiss National Bank (SNB) Chairman Thomas Jordan issued a warning about the Swiss Franc’s (CHF) appreciating trend. As the Swiss Franc experienced rapid appreciation towards the end of 2023, the SNB is sounding the alarm, emphasizing that excessive appreciation could pose a threat to the Swiss economy.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.86 | Positive Crossover | Bullish
  • MA 20 : 0.86 | Positive Crossover | Bullish
  • MA 50 : 0.87 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.86 | Positive Crossover | Bullish
  • MA 20 : 0.85 | Positive Crossover | Bullish
  • MA 50 : 0.87 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 62.86 | Buy Zone | Bullish

Stochastic   Oscillator : 93.47 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.87 R2 : 0.88
  • S1 : 0.83 S2 : 0.82

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 0.8696 | Take Profit : 0.8822 | Stop Loss : 0.8624

Elsewhere In The Forex Market

EUR/GBP up 0.25% to 0.8580. The AUD/USD up 0.06% to 0.6575. The USD/JPY up 0.11% at 148.30. USD/CAD up 0.02% at 1.3490. EUR/JPY up 0.04% at 161.20, The USD/CNY down 0.02% at 7.1946, AUD/SEK up 0.20% at 6.9060, at the time of writing.

Key Economic Events & Data Release Today:

(JPY) National Core CPI (YoY) (Dec) Actual 2.3%, Forecast 2.3%, Previous 2.5% at 05:00. (GBP) Core Retail Sales (MoM) (Dec) Actual –3.2%, Forecast –0.5%, Previous 1.3% at 12:30. (ECB) ECB President Lagarde Speaks at 15:30. (CAD) Core Retail Sales (MoM) (Nov) Forecast –0.1%, Previous 0.6% at 19:00. (USD) Existing Home Sales (Dec) Forecast 3.82M, Previous 3.82M at 20:30. (EUR) ECB President Lagarde Speaks at 20:45.