. Daily FX Analysis - GBP/USD trends, EUR/USD pressure, USD/CAD at 1.3500, NZD/USD defense.

Daily FX Analysis – GBP/USD trends, EUR/USD pressure, USD/CAD at 1.3500, NZD/USD defense.

Daily FX Analysis – GBP/USD trends, EUR/USD pressure, USD/CAD at 1.3500, NZD/USD defense.

26 Jan 2024

Introduction

GBP/USD remains in a consolidation phase below a month-old descending trend-line resistance, hovering just above the 1.2700 level. The pair, which saw a bullish surge earlier in the week, stabilized above 1.2700 despite a minor correction. Meanwhile, EUR/USD faces renewed bearish pressure, slipping below 1.0850, driven by USD strength amid risk aversion. The European Central Bank (ECB) maintained key rates, and USD/CAD is trading lower at 1.3472. NZD/USD is on the defensive above 0.6100, influenced by a stronger USD following robust US GDP data, with the Core PCE in focus for further market direction.

Markets In Focus Today – GBP/USD

GBP/USD consolidates below one-month-old descending trend-line resistance.

The GBP/USD pair struggles to gain meaningful traction on Friday and oscillates in a narrow trading band, just above the 1.2700 mark. Spot prices, meanwhile, remain well within striking distance of a nearly two-week high touched on Wednesday. GBP/USD gathered bullish momentum and advanced to its highest level in nearly two weeks above 1.2770 on Wednesday. Although the pair staged a downward correction in the American session, it managed to post daily gains by stabilizing above 1.2700. The PMI data from the UK showed that the private sector’s economic activity continued to expand at an accelerating pace in early January.

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 | Positive Crossover | Bullish

Simple :

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

RSI (Relative Strength Index): 50.13 | Buy Zone | Bullish

Stochastic   Oscillator : 57.85 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.28 R2 : 1.29
  • S1 : 1.26 S2 : 1.25

Overall Sentiment: Neutral Market Direction: Buy

Trade Suggestion: Limit Buy: 1.2650 | Take Profit: 1.2767 | Stop Loss: 1.2568

EUR/USD

EUR/USD drops below 1.0850 as USD benefits from risk aversion.

EUR/USD came under renewed bearish pressure and declined to its lowest level in five weeks below 1.0850 in the European morning on Friday. The cautious market stance ahead of US PCE inflation data supports the USD and weighs on the pair. After closing in negative territory on Thursday, EUR/USD extended its slide and touched its lowest level since mid-December below 1.0850. The near-term technical outlook points to a build-up of bearish momentum and additional losses could be seen if 1.0800 support fails. The European Central Bank (ECB) left key rates unchanged as expected following the January policy meeting and made no significant changes to the statement language.

Technical   Overview With Chart :

Moving Averages :

Exponential :

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

Simple :

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

RSI (Relative Strength Index): 39.27 | Sell Zone | Bearish

Stochastic   Oscillator : 18.73 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.11 R2 : 1.12
  • S1 : 1.08 S2 : 1.07

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 1.0855 | Take Profit: 1.0755 | Stop Loss: 1.0927

USD/CAD

USD/CAD remains capped under the 1.3500 mark, with all eyes on US PCE data.

USD/CAD drifts lower to 1.3472 amid the modest USD decline GDP expanded at a 3.3% annualized rate in the fourth quarter of 2023, stronger than expected. A rise in oil prices amid Middle East geopolitical tensions might lift the commodity-linked Loonie. The USD/CAD pair trades in negative territory for the second consecutive day during the early Asian trading hours on Friday. The release of the Core Personal Consumption Expenditures Price Index (Core PCE) for December, the Fed’s preferred inflation measure, will be closely watched on Friday. At press time, USD/CAD is trading at 1.3472, losing 0.01% on the day.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.35 | Positive Crossover | Bullish
  • MA 20 : 1.34 | Positive Crossover | Bullish
  • MA 50 : 1.35 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.35 | Negative Crossover | Bearish
  • MA 20 : 1.34 | Positive Crossover | Bullish
  • MA 50 : 1.35 | Positive Crossover | Bullish

RSI (Relative Strength Index): 54.26 | Buy Zone | Bullish

Stochastic   Oscillator : 74.34 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.35 R2 : 1.36
  • S1 : 1.32 S2 : 1.31

Overall Sentiment: Neutral Market Direction: Sell

Trade Suggestion: Stop Sell: 1.3439 | Take Profit: 1.3308 | Stop Loss: 1.3536

NZD/USD

NZD/USD remains on the defensive above the 0.6100 mark, with a focus on US PCE data.

NZD/USD loses ground near 0.6109 on the firmer USD.US GDP data in Q4 was stronger than markets or the Fed expected. New Zealand’s CPI inflation was in line with expectations in the fourth quarter. The USCore Personal Consumption Expenditures Price Index (Core PCE) will be in the spotlight on Friday. The NZD/USD pair traded on a weaker note above the 0.6100 mark during the early Asian session on Friday. The stronger GDP growth number lends some support to the US Dollar (USD) and weighs on the NZD/USD pair. Investors will take more cues from the US Core Personal Consumption Expenditures Price Index (Core PCE) on Friday for fresh impetus. This event might trigger volatility in the market. At press time, the pair trades at 0.6109, down 0.03% for the day.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.61 | Negative Crossover | Bearish
  • MA 20 : 0.62 | Negative Crossover | Bearish
  • MA 50 : 0.61 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.61 | Negative Crossover | Bearish
  • MA 20 : 0.62 | Negative Crossover | Bearish
  • MA 50 : 0.62 | Negative Crossover | Bearish

RSI (Relative Strength Index): 35.79 | Sell Zone | Bearish

Stochastic   Oscillator : 20.41 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.64 R2 : 0.64
  • S1 : 0.61 S2 : 0.61

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 0.6122 | Take Profit: 0.6042 | Stop Loss: 0.6177

Elsewhere In The Forex Market

EUR/GBP down 0.04% to 0.8531. The USD/CHF was down 0.04% to 0.8666. The AUD/USD up 0.02% at 0.6582. USD/JPY up 0.11% at 147.84. EUR/JPY is down 0.37% at 160.42, USD/CNY is up 0.17% at 7.814, and AUD/SEK is up 0.05% at 6.8784, at the time of writing.

Key Economic Events & Data Release Today:

(USD) Core PCE Price Index (MoM) (Dec) Forecast 0.2%, Previous 0.1% at 08:30. (CAD) Wholesale Sales (MoM) Previous 0.9% at 8:30. (USD) Pending Home Sales (MoM) (Dec) Forecast 1.5%, Previous 0.0% at 10:00.