. Daily FX Analysis - GBP/USD soars, others hold steady.

Daily FX Analysis – GBP/USD soars, others hold steady.

Daily FX Analysis – GBP/USD soars, others hold steady.

19 Feb 2024

Introduction

GBP/USD inches above 1.2600 as the US Dollar weakens, driven by market sentiment anticipating delayed Fed rate cuts. With USD under pressure, GBP/USD consolidates gains. Meanwhile, EUR/USD maintains modest gains below 1.0800 in light trading, impacted by the US Dollar’s decline. Australian Dollar consolidates after gains, supported by dovish Fed comments. USD/JPY retreats to near 150.00 amid improved Japanese Machinery Orders and a subdued US Dollar following Friday’s volatile session. US markets observe a bank holiday on President’s Day.

Markets In Focus Today – GBP/USD

GBP/USD inches higher above 1.2600 on USD weakness.

GBP/USD is consolidating gains above 1.2600 in early Europe on Monday. The US Dollar experiences downward pressure, influenced by market sentiment leaning towards the delayed Fed rate cuts. A US holiday-thinned trading is likely to extend. GBP/USD benefited from the renewed US Dollar (USD) weakness and snapped a three-day losing streak on Thursday. The pair, however, lost its recovery momentum after testing 1.2600 and edged lower in the early European session on Friday. The 10-year US Treasury bond yield continued to correct lower following the disappointing Retail Sales data from the US on Thursday and weighed on the USD. Meanwhile, Bank of England’s Monetary Policy Committee (MPC) member Megan Greene reiterated on Thursday that the monetary policy will need to remain restrictive for some time, further supporting GBP/USD.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2614 | Positive Crossover | Bullish
  • MA 20 : 1.2633 | Negative Crossover | Bearish
  • MA 50 : 1.2631 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2607 | Positive Crossover | Bullish
  • MA 20 : 1.2644 | Negative Crossover | Bearish
  • MA 50 : 1.2676 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 47.9409 | Buy Zone | Bullish

Stochastic   Oscillator : 35.0461 | Sell Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.2763 R2 : 1.2807
  • S1 : 1.2618 S2 : 1.2574

Overall Sentiment : Neutral Market Direction : Buy

Trade Suggestion : Stop Buy : 1.2632 | Take Profit : 1.2727 | Stop Loss : 1.2573

EUR/USD

EUR/USD sticks to modest gains below 1.0800 amid light trading.

EUR/USD trades on the front foot below 1.0800 in the European morning on Monday. The US Dollar drops amid holiday-thinned trading and repositioning ahead of Wednesday’s Fed Minutes. German Bundesbank’s monthly report is next in focus. EUR/USD stays in a consolidation phase above 1.0750 on Friday after closing the previous two days in positive territory. Although the pair’s near-term technical outlook points to a buildup of bullish momentum, buyers could remain on the sidelines unless 1.0800 is flipped into support. According to the CME FedWatch Tool, markets are currently pricing in a near 70% probability of the Federal Reserve (Fed) leaving the policy rate unchanged at the next two policy meetings.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0773 | Positive Crossover | Bullish
  • MA 20 : 1.0799 | Negative Crossover | Bearish
  • MA 50 : 1.0836 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0762 | Positive Crossover | Bullish
  • MA 20 : 1.0797 | Negative Crossover | Bearish
  • MA 50 : 1.0891 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 45.6166 | Buy Zone | Bullish

Stochastic   Oscillator : 40.7901 | Sell Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.0982 R2 : 1.1041
  • S1 : 1.0790 S2 : 1.0731

Overall Sentiment : Neutral Market Direction : Buy

Trade Suggestion : Stop Buy : 1.0791 | Take Profit : 1.0862 | Stop Loss : 1.0745

AUD/USD

Australian Dollar consolidates after intraday gains amid subdued US Dollar.

Australian Dollar gains ground on the weaker US Dollar on Monday. Australia’s ASX 200 index rises on higher mining stocks.US Dollar loses ground after dovish comments from the former Fed official James Bullard. Upbeat US PPI data increased the market bias of no rate cut by the Fed in March. The Australian Dollar (AUD) starts the week by continuing its four-day winning streak on Monday. The US Dollar (USD) gained support from Friday’s release of better-than-anticipated Producer Price Index (PPI) data from the United States. However, gains were tempered by dovish remarks from former St. Louis Federal Reserve (Fed) president, James Bullard, thereby boosting the AUD/USD pair.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6523 | Positive Crossover | Bullish
  • MA 20 : 0.6544 | Positive Crossover | Bullish
  • MA 50 : 0.6578 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6513 | Positive Crossover | Bullish
  • MA 20 : 0.6539 | Positive Crossover | Bullish
  • MA 50 : 0.6640 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 47.9189 | Buy Zone | Bullish

Stochastic   Oscillator : 49.6437 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 0.6763 R2 : 0.6837
  • S1 : 0.6524 S2 : 0.6449

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Stop Buy : 0.6546 | Take Profit : 0.6617 | Stop Loss : 0.6500

USD/JPY

USD/JPY depreciates to near 150.00, Japan Machinery Orders improves.

USD/JPY retraces its recent gains on subdued the US Dollar. The better-than-expected Machinery Orders showed improved business confidence in Japan’s manufacturing industry.US markets will observe Monday as a bank holiday on President’s Day. USD/JPY edges lower to near 150.00 during the Asian session on Monday after registering a volatile session in the previous session. The Japanese Yen (JPY) cheers the improved Machinery Orders data from the country. However, the USD/JPY pair soared on better-than-expected Producer Price Index (PPI) data from the United States on Friday. However, gains were trimmed after dovish remarks on the Federal Reserve’s (Fed) policy from James Bullard, former president of the St. Louis Fed.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 149.5678 | Positive Crossover | Bullish
  • MA 20 : 148.7146 | Positive Crossover | Bullish
  • MA 50 : 147.4506 | Positive Crossover | Bullish

Simple :

  • MA 10 : 149.5427 | Positive Crossover | Bullish
  • MA 20 : 148.6240 | Positive Crossover | Bullish
  • MA 50 : 145.8660 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 62.2372 | Buy Zone | Bullish

Stochastic   Oscillator : 82.7250 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 148.5761 R2 : 150.4646
  • S1 : 142.4626 S2 : 140.5741

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 149.54 | Take Profit : 150.93 | Stop Loss : 148.77

Elsewhere In The Forex Market

EUR/GBP up 0.01% to 0.8545. The USD/CHF up 0.08% to 0.8812. The USD/CAD down 0.07% at 1.3475. NZD/USD up 0.49% at 0.6149. AUD/NZD down 0.14% at 1.0639, The USD/CNY up 0.06% at 7.1975, AUD/SEK down 0.06% at 6.8191, at the time of writing.

Key Economic Events & Data Release Today:

(AUD) RBA Meeting Minutes at 19:30. (CNY) PBoC Loan Prime Rate (Feb) Forecast 3.45%, Previous 3.45% at 20:45.