Introduction:

In the world of currency trading, the GBP/USD pair hovers above 1.2400 as traders closely monitor the US Consumer Sentiment Index. Amidst challenges posed by the US GDP data and shifting policy expectations from the Bank of England, GBP/USD remains locked in a narrow range. Meanwhile, the EUR/USD struggles near six-month lows due to ECB actions and the strengthening USD. AUD/USD sees a resurgence, driven by Chinese stimulus and positive Australian data, while USD/JPY consolidates around 147.40, influenced by strong US economic indicators and weakening Japanese Yen.

GBP/USD:

Focus on the US Consumer Sentiment Index as the GBP/USD trades sideways above 1.2400

In the early trading hours of Friday’s Asian session, GBP/USD was unable to recoup the loss from the previous day, circling around 1.2410. Following the United States (US) better-than-expected GDP data, the pair is under downward pressure.

The GBP/USD pair oscillates in a constrained range on Wednesday as it struggles to take advantage of the overnight recovery from the vicinity of a theoretically critical 200-day Simple Moving Average (SMA). Spot prices are still below the crucial level of 1.2500 in the early European session, and they are still quite close to the more than three-month low reached on Wednesday.

The prospects of a more aggressive policy tightening by the Bank of England (BoE) are fading, which is seen as a headwind for the GBP/USD pair, and the British Pound (GBP) maintains its relative underperformance.

Technical Overview :

Moving Averages:

Exponential:

• MA 5: 1.2444 | Negative Crossover | Bearish
• MA 20: 1.2490| Negative Crossover | Bearish
• MA 50: 1.2558 | Negative Crossover | Bearish

Simple:

• MA 5: 1.2455 | Negative Crossover | Bearish
• MA 20: 1.2479 | Negative Crossover | Bearish
• MA 50: 1.2569 | Negative Crossover | Bearish

RSI (Relative Strength Index): 34.69 | Sell Zone | Negative

Stochastic Oscillator: 15.11| Sell Zone | Negative

Resistance And Support Levels: 

• R1: 1.2503 | R2: 1.2633
• S1: 1.2389 | S2: 1.2267

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.2340 | Take Profit: 1.2273 | Stop Loss: 1.2392

EUR/USD:

The EUR/USD is stuck close to a six-month low and is susceptible below the mid-1.0600s.

Following the overnight post-ECB plunge, EUR/USD entered a negative consolidation period. Bets that the ECB has stopped raising interest rates put pressure on the common currency. Hawkish Fed predictions help the USD and increase the likelihood of future declines.

Following the European Central Bank’s 25 basis point rate increase, the Euro fell everywhere. Markets believe it to be the last increase. The US figures, on the other hand, exceeded expectations. The EUR/USD exchange rate fell once again, falling through 1.0650.

At the Euro-group meeting on Friday in Spain, ECB President Lagarde will make another statement. There doesn’t seem to be anything left to say after the post-meeting news conference. Labor Costs and Trade Balance for Q2 will be published by Euro-stat. The German Wholesale Price Index is also due.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 1.0678 | Negative Crossover | Bearish
• MA 20: 1.0722 | Negative Crossover | Bearish
• MA 50: 1.0773 | Negative Crossover | Bearish

Simple:

• MA 5: 1.0688 | Negative Crossover | Bearish
• MA 20: 1.0714 | Negative Crossover | Bearish
• MA 50: 1.0777 | Negative Crossover | Bearish

RSI (Relative Strength Index): 34.19| Sell Zone | Negative

Stochastic Oscillator: 7.3 | Sell Zone | Negative

Resistance And Support Levels: 

• R1: 1.0752| R2: 1.0861
• S1: 1.0625 | S2: 1.0510

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell 1.0595| Take Profit: 1.0510 | Stop Loss: 1.0661

AUD/USD:

AUD/USD regains 0.6450 despite conflicting data from China and stimulus optimism.

In Friday’s Asian trade, the AUD/USD is regaining 0.6450 while seeing a solid increase. The euphoria around China’s stimulus program and the encouraging data for retail sales and industrial production underpins the pair. The US Dollar’s uptrend has paused, which is also helping the Australian dollar recover.

After reaching weekly highs of 0.6459, the AUD/USD pair fell back to below 0.6450. The pair remained range-bound because of the strong US Dollar and risk aversion.

Australia’s employment increased by 64.9K in August, above predictions of 23K. The figures for July were also increased. As anticipated, the unemployment rate stayed the same at 3.7%. The Aussie gained a little after the release of these data. These figures are not likely to alter the present outlook for interest rates, though. At its upcoming meetings, the Reserve Bank of Australia (RBA) is anticipated to leave interest rates unchanged.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 0.6442 | Positive Crossover | Bullish
• MA 20: 0.6425 | Positive Crossover | Bullish
• MA 50: 0.6436 | Positive Crossover | Bullish

Simple:

• MA 5: 0.6444 | Positive Crossover | Bullish
• MA 20: 0.6412 | Positive Crossover | Bullish
• MA 50: 0.6431 | Positive Crossover | Bullish

RSI (Relative Strength Index): 60.76 | Buying Zone | Bullish

Stochastic Oscillator: 99.27| Buy Zone | Positive

Resistance And Support Levels: 

• R1: 0.6471 | R2: 0.6595
• S1: 0.6382 | S2: 0.6302

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.6510 | Take Profit: 0.6595 | Stop Loss: 0.6456

USD/JPY:

Prior to the US UoM confidence report, USD/JPY consolidated in a constrained range of around 147.40.

In a constrained range below the mid-147.00s during the early Asian trading hours on Friday, the USD/JPY pair maintains its recent advances. Strong US economic indicators support the higher US dollar (USD). The US Dollar Index (DXY), a gauge of the USD’s value relative to six other important currencies, maintains above 105.35 and is almost at its best daily close since March. The pair is now down 0.02% for the day as it trades close to 147.45.

During the first half of trading on Wednesday, the USD/JPY picked up some momentum for the second straight day and rose to a brand-new weekly high. However, as traders eagerly await the US consumer inflation numbers before placing new directional bets, spot prices have remained below the mid-147.00s during the early European session.

On the other side, weaker domestic data that show that annual wholesale inflation, as assessed by the Corporate Goods Price Index (CGPI), decreased in August for the eighth consecutive month is what is weighing down the Japanese Yen (JPY).

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 147.34 | Positive Crossover | Bullish
• MA 20: 147.11 | Positive Crossover | Bullish
• MA 50: 146.54 | Positive Crossover | Bullish

Simple:

• MA 5: 147.34 | Positive Crossover | Bullish
• MA 20: 147.19 | Positive Crossover | Bullish
• MA 50: 146.59 | Positive Crossover | Bullish

RSI (Relative Strength Index): 55.01 | Buy Zone | Negative

Stochastic Oscillator: 62.21| Buy Zone | Neutral

Resistance And Support Levels: 

• R1: 147.80 | R2: 150.47
• S1: 146.50 | S2: 144.69

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 148.40 | Take Profit: 150.47 | Stop Loss: 147.02

Elsewhere in the Forex Market

NZD/USD up 0.27% to 0.5927. The EUR/JPY up 0.03% to 157.00. The USDCHF is down 0.01% at 0.8955. USD/CAD is down 0.05% at 1.3500, EUR/GBP is down 0.08% at 0.8571. The USD/CNY is down 0.32% at 7.2539, and AUD/SEK is up 0.27% at 7.221, at the time of writing.

Key Economic Events & Data Release Today:

(CNY) Industrial Production (YoY) (Aug) Actual 4.5%, Forecast 4.0%, Previous 3.7% at 07:30.

(EUR) ECB President Lagarde Speaks at 15:15.

(NZD) Annual Budget Release at 17:30.

(CAD) Manufacturing Sales (MoM) (Jul) Forecast 0.7%, Previous –1.7% at 18:00.

(USD) Industrial Production (MoM) (Aug) Forecast 0.1%, Previous 1.0% at 18:45.