Introduction:

In the world of currency markets, the GBP/USD pair grapples with losses near 1.2175, with a keen eye on impending US data. Recent positive data from the United States has bolstered expectations of another Fed rate hike, exerting pressure on the British pound. Meanwhile, EUR/USD hovers around six-month lows as the US Dollar stands firm, while the AUD/USD pair faces challenges despite surging Australian inflation. The USD/JPY pair, on the other hand, maintains its highest levels since November, driven by increased US Treasury yields amid global economic caution.

GBP/USD:

GBP/USD consolidates losses near 1.2175; attention is on US data.

Early on Wednesday in the European trading session, the GBP/USD is stabilizing to the south near 1.2150. Positive US data supports predictions for another Fed rate hike this year, supporting the US Dollar at the expense of the British pound. US data is pending.

On Monday, the GBP/USD currency pair experienced losses for the third straight trading day. It fell to a six-month low of 1.2167 during the Asian session before rising up near 1.2200. Although the pair is still technically oversold, given the risk-averse market climate, investors might decide against wagering on a sustained upward correction.

The September Consumer Confidence Index data will be presented on the US economic docket.

Technical Overview :

Moving Averages:

Exponential:

• MA 5: 1.2168 | Negative Crossover | Bearish
• MA 20: 1.2257| Negative Crossover | Bearish
• MA 50: 1.2376 | Negative Crossover | Bearish

Simple:

• MA 5: 1.2168 | Negative Crossover | Bearish
• MA 20: 1.2271 | Negative Crossover | Bearish
• MA 50: 1.2396 | Negative Crossover | Bearish

RSI (Relative Strength Index): 20.04 | Sell Zone | Bearish

Stochastic Oscillator: 6.2| Sell Zone | Neutral

Resistance And Support Levels: 

• R1: 1.2300 | R2: 1.2514
• S1: 1.2127 | S2: 1.1907

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.2061 | Take Profit: 1.1906 | Stop Loss: 1.2179

EUR/USD:

As the US Dollar remains firmer, EUR/USD remains near its lows of 1.0550.

In the European session on Wednesday, the EUR/USD crossed into a bearish consolidation phase and traded in a constrained range close to six-month lows near 1.0550. Despite declining US Treasury bond yields, which are negatively impacting the pair, the US Dollar is holding onto its recent gains.

Due to a stronger US Dollar globally, the EUR/USD kept falling and failed to maintain above 1.0600. Risk aversion helped Tuesday’s performance of the US dollar.

On Thursday, inflation statistics for Germany and Spain will be released, and on Friday, the US will issue its Core Personal Consumption Expenditure Index. Market players will keep a careful eye on these figures.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 1.0578| Negative Crossover | Bearish
• MA 20: 1.0626 | Negative Crossover | Bearish
• MA 50: 1.0684 | Negative Crossover | Bearish

Simple:

• MA 5: 1.0578 | Negative Crossover | Bearish
• MA 20: 1.0636 | Negative Crossover | Bearish
• MA 50: 1.0681 | Negative Crossover | Bearish

RSI (Relative Strength Index): 32.02| Sell Zone | Bearish

Stochastic Oscillator: 5.37 | Sell Zone | Negative

Resistance And Support Levels: 

• R1: 1.0661| R2: 1.0825
• S1: 1.0552 | S2: 1.0376

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell 1.0510| Take Profit: 1.0376 | Stop Loss: 1.0619

AUD/USD:

After sizzling inflation statistics, the Australian dollar is hovering around its monthly low..

Despite high monthly inflation, the Australian dollar declined. As predicted, Australia’s inflation rate increased from the previous 4.9% to 5.2%. The US dollar (USD) has fallen from its recent peak. Positive US Treasury yields may provide support for the dollar.

Despite strong Australian inflation figures, the Australian Dollar (AUD) appears to be headed for the monthly low against the US Dollar (USD). Due to risk aversion, the AUD/USD pair was unable to benefit from the positive Australian Consumer Price Index (CPI) data. The increase in the AUD is being restrained by the drop in commodity prices.

According to the Reserve Bank of Australia’s (RBA) minutes from the September monetary policy meeting, more tightening may be required if inflation turns out to be more persistent than anticipated. Higher inflation could have an impact on the RBA’s decision to stop raising interest rates.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 0.6395 | Negative Crossover | Bearish
• MA 20: 0.6418 | Negative Crossover | Bearish
• MA 50: 0.6428 | Negative Crossover | Bearish

Simple:

• MA 5: 0.6398 | Negative Crossover | Bearish
• MA 20: 0.6427 | Negative Crossover | Bearish
• MA 50: 0.6418 | Negative Crossover | Bearish

RSI (Relative Strength Index): 38.85 | Negative Zone | Bearish

Stochastic Oscillator: 0.95| Sell Zone | Negative

Resistance And Support Levels: 

• R1: 0.6454 | R2: 0.6564
• S1: 0.6364 | S2: 0.6265

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 0.6337 | Take Profit: 0.6265 | Stop Loss: 0.6389

USD/JPY:

The USD/JPY remains over 149.00, which is the highest level since November.

The USD/JPY pair was trading near the psychological threshold of 149.10 on Wednesday during the Asian session, only a little below the high reached in November. The US Dollar (USD) is supported against the Japanese Yen (JPY) because of increased US Treasury yields due to increased market caution.

Around 106.20, the US Dollar Index (DXY) reaffirmed a 10-month high as Fed policymakers supported tightening monetary policy even further to maintain price stability. In contrast to concerns about a global downturn, the US economy is robust because of declining inflation and favorable labor market conditions.

BoJ Ueda recommends continuing the expansionary monetary policy in the Japanese Yen market because inflation of 2% is not imminent. A slight increase in inflation supported by wage growth, according to Kazuo Ueda, would be a true win for the central bank.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 148.91 | Positive Crossover | Bullish
• MA 20: 148.39 | Positive Crossover | Bullish
• MA 50: 147.67 | Positive Crossover | Bullish

Simple:

• MA 5: 148.93 | Positive Crossover | Bullish
• MA 20: 148.31| Positive Crossover | Bullish
• MA 50: 147.69 | Positive Crossover | Bullish

RSI (Relative Strength Index): 65.31 | Buy Zone | Bullish

Stochastic Oscillator: 96.14| Buy | Neutral

Resistance And Support Levels: 

• R1: 149.09 | R2: 151.93
• S1: 146.93 | S2: 145.04

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 149.78 | Take Profit: 151.93 | Stop Loss: 148.49

Elsewhere in the Forex Market

NZD/USD down 0.19% to 0.5933. The EUR/JPY was down 0.08% to 157.42. The USDCHF up 0.06% at 0.9162. USD/CAD up 0.02% at 1.3518, and EUR/GBP is up 0.02% at 0.8697. The USD/CNY is down 0.02% at 7.3082, AUD/SEK down 0.34% at 7.0081, at the time of writing.

Key Economic Events & Data Release Today:

(JPY) Monetary Policy Meeting Minutes at 05:20.

(EUR) European Central Bank Non-monetary Policy Meeting at 12:30

(USD) Crude Oil Inventories Forecast –1.320M, Previous –2.867M at 20:00.