. Daily FX Analysis - GBP/USD, EUR/USD, USD/JPY, AUD at Key Levels

Daily FX Analysis – GBP/USD, EUR/USD, USD/JPY, AUD at Key Levels

Daily FX Analysis – GBP/USD, EUR/USD, USD/JPY, AUD at Key Levels

27 Oct 2023

Introduction:

In the currency markets today, multiple factors are at play, influencing the trading dynamics of various currency pairs. GBP/USD is holding above 1.2100, seeking direction from the upcoming US PCE inflation data while grappling with geopolitical pressures. EUR/USD remains below 1.0550, influenced by the European Central Bank’s cautious stance and a weaker US Dollar. AUD/USD is recovering, driven by the prospect of an RBA interest rate hike, while the US Dollar faces pressure from discouraging Core PCE data. USD/JPY is experiencing fluctuations as it retraces from recent highs, with tensions in the Gaza Strip and speculation about Japanese authorities’ intervention contributing to the mix.

GBP/USD:

GBP/USD holds steady above 1.2100, looks to US PCE for fresh impetus.

Early in the European session on Friday, the GBP/USD pair is facing downward pressure while trading just above the 1.2100 level.

Despite a general weakness in the US Dollar and a positive risk sentiment, the pair is struggling to find support. Geopolitical tensions in the Middle East are still exerting downward pressure on the pair, with the upcoming focus turning to the release of US PCE inflation data.

On Wednesday, GBP/USD experienced a drop of over 50 pips, and it slipped below the 1.2100 level as Thursday began. In the short term, the pair still exhibits a bearish technical outlook, and the prevailing negative market sentiment indicates that a substantial rebound may prove to be a challenging endeavour.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.2122 | Negative Crossover | Bearish
  • MA 20: 1.2148 | Negative Crossover | Bearish
  • MA 50: 1.2179 | Negative Crossover | Bearish

Simple:

  • MA 5: 1.2114 | Negative Crossover | Bearish
  • MA 20: 1.2150 | Negative Crossover | Bearish
  • MA 50: 1.2182| Negative Crossover | Bearish

RSI (Relative Strength Index): 44.04| Neutral Zone | Neutral

Stochastic Oscillator: 29.71| Sell Zone | Positive

Resistance And Support Levels:

  • R1: 1.2300| R2: 1.2505
  • S1: 1.2103| S2: 1.1856

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.2030 | Take Profit: 1.1855 | Stop Loss: 1.2170

EUR/USD:

EUR/USD remains on the defensive below 1.0550, awaits US PCE inflation.

EUR/USD is currently trading under the 1.0550 level and is encountering difficulties in leveraging the rebound from the prior day during the Friday morning session in Europe. The pair is still being influenced by expectations of a cautious stance from the European Central Bank, even though the US Dollar is weaker and market sentiment is positive. Investors are keeping a close watch on US PCE inflation data.

The EUR/USD hit a low point at 1.0521, aligning with the lows from the previous week. Traders interpreted the European Central Bank (ECB) as taking on a more cautious position, while the US Dollar did not gain from stronger-than-anticipated US economic growth data.

Despite the encouraging GDP data in the United States, the US Dollar did not capitalize on it, as US Treasury yields reversed course and declined in the American session, contributing to the recovery in EUR/USD.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.0563| Negative Crossover | Bearish
  • MA 20: 1.0576| Negative Crossover | Bearish
  • MA 50: 1.0578 | Negative Crossover | Bearish

Simple:

  • MA 5: 1.0557 | Negative Crossover | Bearish
  • MA 20: 1.0585 | Negative Crossover | Bearish
  • MA 50: 1.0568 | Negative Crossover | Bearish

RSI (Relative Strength Index): 46.5| Buy Zone | Bullish

Stochastic Oscillator: 13.04| Sell zone | Positive

Resistance And Support Levels:

  • R1: 1.0661| R2: 1.0795
  • S1: 1.0540| S2: 1.0370

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.0504| Take Profit: 1.0370 | Stop Loss: 1.0607

AUD/USD:

Australian dollar retraces gains ahead of US PCE price index.

The Australian Dollar has made a recovery from its annual lows thanks to a correction in the US Dollar. The Aussie Dollar is being lifted by the anticipation of an interest rate hike by the RBA. Meanwhile, the US Dollar is under pressure due to the discouraging Core PCE data, which has led to higher demand for US bonds.

The Australian Dollar (AUD) is making a recovery from its annual lows, marking a second consecutive day of gains on Friday. This rebound is attributed to the correction in the US Dollar (USD) and the increasing probability of the Reserve Bank of Australia (RBA) implementing another interest rate hike on November 7.

According to current market expectations, the upcoming Federal Open Market Committee (FOMC) meeting scheduled for next week is expected to maintain the current interest rates without any adjustments.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.8970 | Positive Crossover | Bullish
  • MA 20: 0.8962| Positive Crossover | Bullish
  • MA 50: 0.8998 | Negative Crossover | Bearish

Simple:

  • MA 5: 0.6333 | Positive Crossover | Bullish
  • MA 20: 0.6333 | Positive Crossover | Bullish
  • MA 50: 0.6348| Negative Crossover | Bearish

RSI (Relative Strength Index): 52.24| Buying Zone| Bullish

Stochastic Oscillator: 56.18| Buy Zone | Positive

Resistance And Support Levels:

  • R1: 0.6354| R2: 0.6481
  • S1: 0.6268 | S2: 0.6168

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.6385 | Take Profit: 0.6481 | Stop Loss: 0.6316

USD/JPY:

100-hour SMA near 150.00 holds the key for bulls ahead of US PCE data.

During the Asian session on Friday, the USD/JPY pair is showing a slight decline, putting a halt to a three-day streak of gains that had taken it to its highest level since October 2022, in the vicinity of the 150.75-150.80 range achieved the day before.

On Thursday, the Japanese Yen (JPY) experiences significant fluctuations against the US Dollar (USD) over a wide range. Several factors are influencing this pair, including escalating tensions in the Gaza Strip, the release of important US data, and rumours of Japanese authorities intervening in the foreign exchange markets.

The Yen initially lost ground against the US Dollar, which was boosted by safe-haven demand and increased US bond yields.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 150.15 | Negative Crossover | Bearish
  • MA 20: 149.95| Positive Crossover | Bullish
  • MA 50: 149.57| Positive Crossover | Bullish

Simple:

  • MA 5: 150.23 | Negative Crossover | Bearish
  • MA 20: 149.94| Positive Crossover | Bullish
  • MA 50: 149.51| Positive Crossover | Bullish

RSI (Relative Strength Index): 55.11| Buy Zone | Bullish

Stochastic Oscillator: 46.95| Buy | Negative

Resistance And Support Levels:

  • R1: 150.20| R2: 152.09
  • S1: 148.41| S2: 146.40

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 150.48| Take Profit: 152.09 | Stop Loss: 149.45

Elsewhere in the Forex Market

NZD/USD down 0.01% to 0.5814. The USD/CAD down 0.09% to 1.3819. The USD/CHF up 0.02% at 0.8989. EUR/GBP up 0.20% at 0.8708, EUR/JPY down 0.16% at 158.55., The USD/CNY up 0.03% at 7.3173, AUD/SEK up 0.28% at 7.0788, at the time of writing.

Key Economic Events & Data Release Today:

(EUR) Spanish (GDP) (QoQ) (Q3) Actual 0.3%, Forecast 0.2%, Previous 0.5% at 03:00.

(EUR) EU Leaders Summit at 06:00

(CAD) Wholesale Sales (MoM) Previous 2.3% at 08:30.

(USD) Core PCE Price Index (MoM) (Sep) Forecast 0.3%, Previous 0.1% at 08:30.