. Daily FX Analysis - GBP/USD Strong, EUR/USD Rebounds, USD/JPY Surges, AUD/USD Declines

Daily FX Analysis – GBP/USD Strong, EUR/USD Rebounds, USD/JPY Surges, AUD/USD Declines

Daily FX Analysis – GBP/USD Strong, EUR/USD Rebounds, USD/JPY Surges, AUD/USD Declines

23 Oct 2023

Introduction:

In the world of Forex trading, GBP/USD is maintaining its position above 1.2150, influenced by risk aversion. Meanwhile, EUR/USD is rebounding above 1.0600 due to a weaker US Dollar. AUD/USD is declining as the US Dollar strengthens and the Reserve Bank of Australia is expected to implement more interest rate hikes. USD/JPY is looking to approach 150.00, driven by the strong US Dollar, and recent Japanese elections had mixed results for the ruling LDP.

GBP/USD:

GBP/USD holds steady above 1.2150, risk aversion weighs.

The GBP/USD exchange rate is currently holding firm above the 1.2150 level and is facing challenges in maintaining its recent winning streak in the early European trading session on Monday. The pair is under the influence of a slight strengthening of the US Dollar and the ongoing Hamas-Israel conflict, which poses a potential threat as we approach this week’s significant data releases for the UK and the US.

GBP/USD experienced renewed downward pressure, dropping to around 1.2100, but it made a modest recovery during the European session. Based on the short-term technical analysis, the bearish sentiment remains dominant.

However, the negative shift in market sentiment on Friday is aiding the US Dollar in maintaining its strength, despite Chairman Powell’s cautious remarks.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.2153 | Positive Crossover | Bullish
  • MA 20: 1.2165 | Positive Crossover | Bullish
  • MA 50: 1.2198 | Negative Crossover | Bearish

Simple:

  • MA 5: 1.2149 | Positive Crossover | Bullish
  • MA 20: 1.2161 | Positive Crossover | Bullish
  • MA 50: 1.2178| Negative Crossover | Bearish

RSI (Relative Strength Index): 48.48| Buy Zone | Bullish

Stochastic Oscillator: 72.63| Buy Zone | Positive

Resistance And Support Levels:

  • R1: 1.2173| R2: 1.2333
  • S1: 1.2062| S2: 1.1902

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 1.2215 | Take Profit: 1.2333 | Stop Loss: 1.2135

EUR/USD:

EUR/USD re-takes 1.0600 as US dollar turns south.

On Monday’s European session, EUR/USD is hovering near the 1.0600 mark, making a recovery. The pair is benefiting from a weakened US Dollar, despite US Treasury bond yields rising and a prevailing cautious risk sentiment. We are now awaiting sentiment data from the European Union.

After a relatively calm Asian trading session, EUR/USD started to show signs of strength and shifted into positive territory, just above the 1.0600 mark. Should the pair maintain its position above this level, it may pique the interest of potential buyers.

Market participants will closely monitor the S&P Global PMI surveys for Germany, the Euro area, and the US on Tuesday, in anticipation of the European Central Bank (ECB) monetary policy announcements scheduled for Thursday.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.0587| Positive Crossover | Bullish
  • MA 20: 1.0569 | Positive Crossover | Bullish
  • MA 50: 1.0573 | Positive Crossover | Bullish

Simple:

  • MA 5: 1.0586 | Positive Crossover | Bullish
  • MA 20: 1.0558 | Positive Crossover | Bullish
  • MA 50: 1.0551 | Positive Crossover | Bullish

RSI (Relative Strength Index): 58.82| Buy Zone | Bullish

Stochastic Oscillator: 88.34| Buy zone | Negative

Resistance And Support Levels:

  • R1: 1.0616| R2: 1.0740
  • S1: 1.0507| S2: 1.0371

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 1.0662| Take Profit: 1.0741 | Stop Loss: 1.0610

AUD/USD:

AUD/USD extend losses ahead of Australia PMI data.

The Australian Dollar remains on a downward trend as the US Dollar makes a comeback.

The Reserve Bank of Australia is anticipated to enact additional interest rate increases.

For the fourth consecutive session, the Australian Dollar (AUD) is experiencing a declining trend on Monday. The AUD/USD pair is encountering obstacles as a result of the US Dollar’s (USD) resurgence, driven by positive movements in US Treasury yields.

It is expected that the Reserve Bank of Australia (RBA) will adopt more stringent monetary policies. Governor Michele Bullock of the RBA has indicated that if inflation continues to exceed the anticipated levels, the RBA is ready to implement appropriate policy actions.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.6311 | Negative Crossover | Bearish
  • MA 20: 0.6331| Negative Crossover | Bearish
  • MA 50: 0.6355 | Negative Crossover | Bearish

Simple:

  • MA 5: 0.6309 | Negative Crossover | Bearish
  • MA 20: 0.6327 | Negative Crossover | Bearish
  • MA 50: 0.6357| Negative Crossover | Bearish

RSI (Relative Strength Index): 41.57| Neutral Zone| Neutral

Stochastic Oscillator: 18.12| Sell Zone | Negative

Resistance And Support Levels:

  • R1: 0.6376| R2: 0.6480
  • S1: 0.6301 | S2: 0.6202

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 0.6277 | Take Profit: 0.6202 | Stop Loss: 0.6341

USD/JPY:

USD/JPY looks to approach 150.00 on the stronger US dollar.

USD/JPY continues to advance for a second consecutive trading session, driven by the strong performance of the US Dollar.

In recent by-elections, Japan’s ruling LDP secured victory in the lower house but faced a setback in the House of Councilors poll.

The US Dollar gains momentum as US Treasury yields rise.

During the Asian trading session on Monday, USD/JPY is trading at around 149.90, experiencing upward movement. This upward momentum is attributed to the remarks made by Bank of Japan (BoJ) Governor Kazuo Ueda last Friday.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 149.87 | Positive Crossover | Bullish
  • MA 20: 149.68| Positive Crossover | Bullish
  • MA 50: 149.29| Positive Crossover | Bullish

Simple:

  • MA 5: 149.88 | Positive Crossover | Bullish
  • MA 20: 149.70| Positive Crossover | Bullish
  • MA 50: 149.37| Positive Crossover | Bullish

RSI (Relative Strength Index): 59.76| Buy Zone | Bullish

Stochastic Oscillator: 55.07| Buy | Negative

Resistance And Support Levels:

  • R1: 149.95| R2: 152.11
  • S1: 148.40| S2: 146.68

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 150.38| Take Profit: 152.11 | Stop Loss: 149.35

Elsewhere in the Forex Market

NZD/USD down 0.11% to 0.5819. The USD/CAD down 0.04% to 1.3711. The USD/CHF up 0.03% at 0.8924. USD/JPY up 0.06% at 149.92, EUR/JPY up 0.18% at 159.01., The USD/CNY up 0.01% at 7.3162, AUD/SEK up 0.18% at 6.9413, at the time of writing.

Key Economic Events & Data Release Today:

(SGD) Core CPI (YoY) (Sep) Actual 3.00%, Forecast 3.10%, Previous 3.40% at 10:30.

(SGD) CPI (YoY) (Sep) Actual 4.1%, Forecast 4.1%, Previous 4.0% at 10:30