. Daily FX Analysis - GBP/USD, EUR/USD, AUD/USD, USD/JPY on Edge

Daily FX Analysis – GBP/USD, EUR/USD, AUD/USD, USD/JPY on Edge

Daily FX Analysis – GBP/USD, EUR/USD, AUD/USD, USD/JPY on Edge

30 Oct 2023

Introduction:

In the world of forex, GBP/USD grapples with direction while EUR/USD treads steadily at 1.0550, both eyes fixed on key economic data. Meanwhile, AUD/USD holds above 0.6350 on the back of strong Australian Retail Sales, while USD/JPY, with a positive lean below 150.00, gears up for central bank meetings. This week, markets are primed for potential central bank actions, which could influence these currency pairs’ trajectories.

GBP/USD:

GBP/USD struggles for a firm direction.

The GBP/USD pair is still encountering difficulties in establishing significant momentum and is currently fluctuating within a trading range that has persisted for several days. This range centres around the 1.2100 level as the Asian session unfolds on Monday.

The UK’s central bank is expected to maintain its vigilant stance against the persistently high inflation rate and may even consider the possibility of further tightening. This uncertainty, in response, is discouraging traders from making bold, one-sided bets on the British Pound (GBP) and is a key factor contributing to the GBP/USD pair’s price movements remaining within a defined range.

Looking forward, there is no significant market-affecting economic data scheduled for release on Monday, both from the UK and the US.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.2122 | Negative Crossover | Bearish
  • MA 20: 1.2143 | Negative Crossover | Bearish
  • MA 50: 1.2175 | Negative Crossover | Bearish

Simple:

  • MA 5: 1.2124 | Negative Crossover | Bearish
  • MA 20: 1.2149 | Negative Crossover | Bearish
  • MA 50: 1.2181| Negative Crossover | Bearish

RSI (Relative Strength Index): 44.15| Neutral Zone | Neutral

Stochastic Oscillator: 27.48| Sell Zone | Negative

Resistance And Support Levels:

  • R1: 1.2304| R2: 1.2517
  • S1: 1.2109| S2: 1.1856

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.2031 | Take Profit: 1.1856 | Stop Loss: 1.2167

EUR/USD:

EUR/USD keeps range near 1.0550 ahead of the German GDP, CPI data.

As we enter the European morning on Monday, the EUR/USD pair is maintaining a lateral trajectory around the 1.0550 mark. Traders are exercising caution, abstaining from making new Euro-related investments in anticipation of critical German GDP and inflation data. Additionally, ongoing geopolitical tensions continue to be a source of apprehension.

Market expectations suggest a further deterioration in European economic conditions. The upcoming German Gross Domestic Product (GDP) data is projected to show a contraction of 0.3% on a quarterly basis, in contrast to the 0.2% growth recorded in the previous report.

Market observers will closely monitor the release of the German Gross Domestic Product (GDP) data for the third quarter (Q3). Additionally, later on Monday, the preliminary Spanish Consumer Price Index (CPI) for October and the German CPI will be made available, attracting attention from market participants.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.0561| Negative Crossover | Bearish
  • MA 20: 1.0573| Negative Crossover | Bearish
  • MA 50: 1.0576 | Negative Crossover | Bearish

Simple:

  • MA 5: 1.0561 | Negative Crossover | Bearish
  • MA 20: 1.0585 | Negative Crossover | Bearish
  • MA 50: 1.0570 | Negative Crossover | Bearish

RSI (Relative Strength Index): 46.7| Buy Zone | Bullish

Stochastic Oscillator: 12.55| Sell zone | Neutral

Resistance And Support Levels:

  • R1: 1.0661| R2: 1.0783
  • S1: 1.0528| S2: 1.0352

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.0479| Take Profit: 1.0352 | Stop Loss: 1.0576

AUD/USD:

Australian dollar holds gains above 0.6350 after strong Australian Retail Sales data.

In Asian trading on Monday, the AUD/USD pair is maintaining its position above 0.6350, benefiting from robust Australian Retail Sales data that has heightened expectations for a November rate hike by the RBA. However, the potential for further upward movement may be limited due to increasing tensions in the Middle East.

Additionally, any indications of economic progress in China will bolster market confidence and could lead to an increase in the value of the Australian dollar, which is often influenced by developments in China. Market participants will closely monitor the Chinese PMI data scheduled for release on Tuesday.

The focus for this week will be on the Federal Reserve’s policy meeting, and this event has the potential to induce market volatility. Traders will closely watch these developments and seek trading opportunities with the AUD/USD pair based on the cues they receive.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.6338 | Positive Crossover | Bullish
  • MA 20: 0.6335| Positive Crossover | Bullish
  • MA 50: 0.6347 | Positive Crossover | Bullish

Simple:

  • MA 5: 0.6338 | Positive Crossover | Bullish
  • MA 20: 0.6333 | Positive Crossover | Bullish
  • MA 50: 0.6349| Positive Crossover | Bullish

RSI (Relative Strength Index): 52.41| Buying Zone| Bullish

Stochastic Oscillator: 61.44 |Buy Zone | Positive

Resistance And Support Levels:

  • R1: 0.6361| R2: 0.6481
  • S1: 0.6275 | S2: 0.6189

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.6392 | Take Profit: 0.6481 | Stop Loss: 0.6330

USD/JPY:

USD/JPY trades mild with positive bias blow of 150.00, looks to key central bank meetings.

The USD/JPY pair starts the week with a favorable performance, reclaiming a portion of the losses incurred on Friday.

The contrasting policy stances of the Bank of Japan (BoJ) and the Federal Reserve are viewed as a significant factor providing strength to this currency pair.

Concerns about potential interventions could potentially limit additional gains in anticipation of upcoming central bank-related events.

The Bank of Japan (BoJ) is set to reveal its decision on Tuesday, and there is increasing speculation regarding a potential adjustment to the yield curve control (YCC) policy. Nevertheless, it is improbable that the Japanese central bank will deviate from its current stance of maintaining negative policy rates.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 149.78 | Negative Crossover | Bearish
  • MA 20: 149.86| Negative Crossover | Bearish
  • MA 50: 149.56| Negative Crossover | Bearish

Simple:

  • MA 5: 149.89 | Negative Crossover | Bearish
  • MA 20: 149.90| Negative Crossover | Bearish
  • MA 50: 149.54| Negative Crossover | Bearish

RSI (Relative Strength Index): 43.39| Neutral Zone | Neutral

Stochastic Oscillator: 16.87| Sell Zone | Negative

Resistance And Support Levels:

  • R1: 150.73| R2: 152.02
  • S1: 149.35| S2: 147.28

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 148.93| Take Profit: 147.28 | Stop Loss: 150.43

Elsewhere in the Forex Market

NZD/USD up 0.37% to 0.5824. The USD/CAD down 0.11% to 1.3859. The USD/CHF up 0.11% at 0.9034. EUR/GBP up 0.09% at 0.8713, EUR/JPY down 0.06% at 157.96., The USD/CNY up 0.01% at 7.3180, AUD/SEK up 0.26% at 7.0909, at the time of writing.

Key Economic Events & Data Release Today:

(AUD) Retail Sales (MoM) (Sep) Actual 0.9%, Forecast 0.3%, Previous 0.2% at 06:00.

(EUR) German GDP (QoQ) (Q3) Forecast –0.3%, Previous 0.0% at 14:30.

(EUR) German CPI (MoM) (Oct) Forecast 0.2%, Previous 0.3% at 18:30.

(EUR) ECB`s De Guindos Speaks at 18:30.