. Daily FX Analysis -GBP/USD falls, EUR/USD fights, AUD/USD fluctuates, USD/JPY rises.

Daily FX Analysis – GBP/USD falls, EUR/USD fights, AUD/USD fluctuates, USD/JPY rises.

Daily FX Analysis – GBP/USD falls, EUR/USD fights, AUD/USD fluctuates, USD/JPY rises.

05 Feb 2024

Introduction

GBP/USD faces a decline, reaching 1.2610, as the US Dollar gains strength on robust jobs data, reducing the likelihood of a Fed rate cut in March. Meanwhile, EUR/USD struggles below 1.0800 amid sustained USD strength, while AUD/USD recovers from a three-month low, supported by positive economic data. In contrast, USD/JPY sees a rally to a two-month peak, propelled by rising US bond yields and the BoJ’s hawkish stance amidst geopolitical concerns.

Markets In Focus Today – GBP/USD

GBP/USD extends losses to near 1.2610 as the Fed rate cut in March appears unlikely.

GBP/USD lost ground as US Dollar surged after blockbuster US jobs data. Fed Chair Jerome Powell reiterated that the March meeting is too soon to start rate cuts. BoE’s Huw Pill mentioned that the right time for the rate cuts is probably still some time away. GBP/USD continues its decline for the second consecutive session, edging lower to around 1.2610 during the Asian trading hours on Monday. The Pound Sterling (GBP) faces challenges as the US Dollar (USD), measured by the US Dollar Index (DXY), reaches an eight-week high. This strength in the USD is fueled by positive market sentiment as a March rate cut by the Federal Reserve appears unlikely. The sentiment is based on a promising labor market report released on Friday.

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 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.27 | Negative Crossover | Bearish
  • MA 20 : 1.27 | Negative Crossover | Bearish
  • MA 50 : 1.27 | Negative Crossover | Bearish

RSI (Relative Strength Index): 41.76 | Neutral Zone | Neutral

Stochastic   Oscillator : 36.14 | Sell Zone | Negative

Resistance   And Support Levels :

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

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 1.2632 | Take Profit: 1.2545 | Stop Loss: 1.2693

EUR/USD

EUR/USD stays defensive below 1.0800 on sustained USD strength.

EUR/USD is nursing losses below 1.0800 in the Asian session on Monday. The US Dollar firms up as Fed Chair Jerome Powell pushes back on the timing of rate cuts while Middle East geopolitical tensions also underpin the Greenback. EU Sentix and US ISM PMI awaited. After touching its lowest level since December 13 at 1.0780 in the European session on Thursday, EUR/USD reversed its direction in the second half of the day and closed in positive territory. The pair holds comfortably above 1.0850 early Friday and the near-term outlook points to a bullish tilt. The US Dollar (USD) came under selling pressure in the American session on Thursday as US Treasury bond yields continued to push lower following disappointing employment-related data releases.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.08 | Negative Crossover | Bearish
  • MA 20 : 1.09 | Negative Crossover | Bearish
  • MA 50 : 1.09 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.08 | Negative Crossover | Bearish
  • MA 20 : 1.09 | Negative Crossover | Bearish
  • MA 50 : 1.09 | Negative Crossover | Bearish

RSI (Relative Strength Index): 37.60 | Sell Zone | Bearish

Stochastic   Oscillator : 19.24 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.10 R2 : 1.10
  • S1 : 1.08 S2 : 1.07

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion : Limit Sell : 1.0803 | Take Profit : 1.0734 | Stop Loss : 1.0850

AUD/USD

AUD/USD remains pressured near 0.6500 amid risk-aversion.

AUD/USD is trading under pressure around 0.6500 early Monday. Escalating geopolitical tensions and soft China’s PMI are supporting the US Dollar after Friday’s stellar US NFP report. Fed Chair Powell dismisses a March rate cut while the Aussie ignores strong Australian trade data. The Australian Dollar (AUD) continued its upward momentum on Friday, recovering from a three-month low reached at 0.6508 on Thursday. The US Dollar (USD) faced downward pressure following mixed economic data from the United States (US). Moreover, the Australian Dollar (AUD) received support from improved Producer Price Index (PPI) data. Consequently, these factors collectively support the AUD/USD pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.66 | Negative Crossover | Bearish
  • MA 20 : 0.66 | Negative Crossover | Bearish
  • MA 50 : 0.66 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.66 | Negative Crossover | Bearish
  • MA 20 : 0.66 | Negative Crossover | Bearish
  • MA 50 : 0.67 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 32.77 | Sell Zone | Bearish

Stochastic   Oscillator : 17.93 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.68 R2 : 0.68
  • S1 : 0.65 S2 : 0.64

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 0.6517 | Take Profit: 0.6444 | Stop Loss: 0.6565

USD/JPY

Japanese Yen remains on the back foot against the USD, bears have the upper hand near the YTD low.

The Japanese Yen recovers a bit from the YTD low amid the BoJ’s hawkish tilt and geopolitical risks. The USD stalls the post-NFP rally to a nearly two-month peak and acts as a headwind for USD/JPY. Rising US bond yields favor the USD bulls and support prospects for a further move up for the pair. The Japanese Yen (JPY) touched a fresh YTD low against its American counterpart during the Asian session on Monday, albeit lacks follow-through selling in the wake of the Bank of Japan’s (BoJ) hawkish tilt. Meanwhile, investors remain worried about the risk of further escalating geopolitical tensions in the Middle East.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 147.57 | Positive Crossover | Bullish
  • MA 20 : 146.94 | Positive Crossover | Bullish
  • MA 50 : 146.37 | Positive Crossover | Bullish

Simple :

  • MA 10 : 147.68 | Positive Crossover | Bullish
  • MA 20 : 147.12 | Positive Crossover | Bullish
  • MA 50 : 145.28 | Positive Crossover | Bullish

RSI (Relative Strength Index): 61.31 | Buy Zone | Bullish

Stochastic   Oscillator : 69.95 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 148.58 R2 : 150.46
  • S1 : 142.46 S2 : 140.57

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Stop Buy: 148.63 | Take Profit: 149.81 | Stop Loss: 147.90

Elsewhere In The Forex Market

EUR/GBP up 0.13% to 0.8547. The NZD/USD up 0.17% to 0.6073. The USD/CAD is up 0.04% at 1.3472. EUR/JPY down 0.04% at 159.96. USD/CHF was down 0.49% at 0.6533, The USD/CNY was up 0.07% at 7.1967, AUD/SEK was up 0.15% at 6.8441, at the time of writing.

Key Economic Events & Data Release Today:

(GBP) Composite PMI (Jan) Forecast 53.8, Previous 53.4 at 4:30. (USD) Service PMI (Jan) Forecast 52.9, Previous 51.4 at 09:45. (USD) ISM Non-Manufacturing PMI (Jan) Forecast 52.0, Previous 50.6 at 10:00. (AUD) Retail Sales (MoM) (Dec) Forecast 0.4%, Previous 1.6% at 19:30. (AUD) RBA Interest Rate Decision (Feb) Forecast 4.35%, Previous 4.35% at 22:30.