GBP/USD Nears Vulnerability at 1.2500, EUR/USD Surges to 1.0760, AUD/USD Rebounds, and USD/JPY Faces CPI Challenges.

Introduction:

In currency trading, the GBP/USD, EUR/USD, AUD/USD, and USD/JPY pairs are making significant moves driven by various factors, including USD fluctuations, central bank decisions, and economic data releases. Let’s delve into the latest developments shaping these forex pairs.

GBP/USD:

Ahead of UK employment data, the GBP/USD holds steady at around 1.2,500.

The GBP/USD pair moved a little lower during Tuesday’s Asian session, extending the previous day’s late decline from the neighborhood of mid-1.2500s. Spot prices are currently trading towards the psychological level of 1.2500 and are still quite close to the three-month low reached last week.

The GBP/USD currency pair reversed higher in the Asian session on Friday after dropping more than 100 pips over the previous three days. However, the pair lost steam near 1.2500, underscoring the significance of this technical level.

Investors have decreased their predictions for the Bank of England’s (BoE) terminal rate because of officials’ circumspect remarks earlier this week. Markets are currently pricing in an 85% probability of a 5.75% BoE terminal rate, a considerable decrease from the 6.5% expected in July, according to Reuters. Investors might therefore continue to be hesitant to wager on a sustained GBP/USD recovery even if the market climate is more positive.

Technical Overview :

Moving Averages:

Exponential:

• MA 5: 1.2505 | Negative Crossover | Bearish
• MA 20: 1.2536 | Negative Crossover | Bearish
• MA 50: 1.2603 | positive Crossover | Bullish

Simple:

• MA 5: 1.2503 | Negative Crossover | Bearish
• MA 20: 1.2537 | Negative Crossover | Bearish
• MA 50: 1.2617 | positive Crossover | Bullish

RSI (Relative Strength Index): 42.31 | Neutral Zone | Neutral

Stochastic Oscillator: 86.24| Buy Zone | Positive

Resistance And Support Levels: 

• R1: 1.2555 | R2: 1.2671
• S1: 1.2485 | S2: 1.2381

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.2453 | Take Profit: 1.2381 | Stop Loss: 1.2512

EUR/USD:

EUR/USD declines in mid-1.0700s; focus on German ZEW survey.

The EUR/USD trades with a slight negative bias early on Tuesday, unable to fully profit on the overnight strong surge up. The US Dollar is somewhat under control, and the market’s mood is beginning to improve. The German ZEW survey comes next.

From three-month lows, the EUR/USD surged to the 1.0760 region, the pair’s highest point in six days. Following an improvement in risk sentiment, the US Dollar fell across the board, fuelling the upward movement. First decline in over two weeks for the US Dollar Index.

The European Central Bank (ECB) will meet to discuss monetary policy on Thursday. The likelihood is in favour of a moderate interest rate increase, but a delay would not come as a huge shock. Last week, the Euro suffered from uncertainty regarding the ECB’s upcoming actions. The German ZEW Survey is due on Tuesday.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 1.0732 | Negative Crossover | Bearish
• MA 20: 1.0747 | Negative Crossover | Bearish
• MA 50: 1.0801 | positive Crossover | Bullish

Simple:

• MA 5: 1.0733 | Negative Crossover | Bearish
• MA 20: 1.0738 | Negative Crossover | Bearish
• MA 50: 1.0806 | positive Crossover | Bullish

RSI (Relative Strength Index): 44.87 | Neutral Zone | Neutral

Stochastic Oscillator: 92.1 | Buying Zone | Positive

Resistance And Support Levels: 

• R1: 1.0769| R2: 1.0841
• S1: 1.0720 | S2: 1.0651

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.0698 | Take Profit: 1.0651 | Stop Loss: 1.0734

AUD/USD:

A risk reset causes the AUD/USD to recover toward 0.6450.

As Tuesday’s European opening bells approach, the AUD/USD is regaining ground and moving back toward 0.6450. While the US Dollar rally waned with the renewed optimism driven by China, the Australian dollar cheers a minor increase in Australian business confidence.

On Monday, the AUD/USD experienced its best day in two weeks thanks to a general US Dollar decline and a rise in commodities prices. The 20-day Simple Moving Average (SMA) was briefly surpassed as the pair climbed above 0.6400. The Australian dollar may continue its rise if the bullish investor mentality holds. However, before repositioning their strategies, traders may choose to hold off until after the release of important US and Australian data.

The National Australia Bank’s Business Survey and the September Westpac Consumer Confidence report are also coming on Tuesday. The employment statistics for Australia will be the most significant news on Thursday.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 0.6422 | Negative Crossover | Bearish
• MA 20: 0.6414 | Positive Crossover | Bullish
• MA 50: 0.6438 | Positive Crossover | Bullish

Simple:

• MA 5: 0.6422 | Positive Crossover | Bullish
• MA 20: 0.6408 | Positive Crossover | Bullish
• MA 50: 0.6429 | positive Crossover | Bullish

RSI (Relative Strength Index): 51.77 | Buying Zone | Bullish

Stochastic Oscillator: 92.59 | Buy Zone | Positive

Resistance And Support Levels: 

• R1: 0.6437 | R2: 0.6516
• S1: 0.6368 | S2: 0.6292

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.6461 | Take Profit: 0.6518 | Stop Loss: 0.6427

USD/JPY:

The USD/JPY is treading water to reverse recent losses.

Prior to the publication of the US Consumer Price Index (CPI), USD/JPY struggled to regain yesterday’s losses, circling around 146.60 on Tuesday during the Asian session. The Bank of Japan’s (BoJ) positive remarks as well as the weak performance of the US Dollar (USD) put downward pressure on the pair.

Kanda warned against the recent decline in the value of the Japanese Yen (JPY) and said that if speculative movements in the currency market persist, authorities won’t rule out any possibilities. The USD/JPY pair has fallen because of this announcement.

A private survey published on Tuesday revealed that the growth of business activity in China’s services sector slowed to its lowest level in eight months. This event has sparked worries about the second-largest economy in the world’s deteriorating economic situation, which could affect Japanese exports to the nation.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 146.78 | positive Crossover | Bullish
• MA 20: 146.82 | positive Crossover | Bullish
• MA 50: 146.17 | positive Crossover | Bullish

Simple:

• MA 5: 146.56 | Negative Crossover | Bearish
• MA 20: 147.01 | positive Crossover | Bullish
• MA 50: 146.34 | positive Crossover | Bullish

RSI (Relative Strength Index): 52.14 | Buy Zone | Positive

Stochastic Oscillator: 28.09| Buy Zone | Positive

Resistance And Support Levels: 

• R1: 147.28 | R2: 150.47
• S1: 145.04 | S2: 142.02

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 148.31 | Take Profit: 150.47 | Stop Loss: 146.76

Elsewhere in the Forex Market

NZD/USD down 0.18% to 0.5907. The EUR/JPY up 0.12% to 157.73. The USDCHF up 0.04% at 0.8911. USD/CAD up 0.06% at 1.3582, EUR/GBP down 0.07% at 0.8586. The USD/CNY up 0.07% at 7.2932, AUD/SEK up 0.06% at 7.1290, at the time of writing.

Key Economic Events & Data Release Today:

(GBP) Average Earning Index + Bonus (Jul) Actual 8.5%, Forecast 8.2%, Previous 29.0K at 11:30.

(EUR) German ZEW Electronic Sentiment (Sep) Forecast –15.0, Previous –12.3 at 14:30.

(AUD) Westpac Consumer Sentiment (Sep) Actual –1.5%, Previous –0.4% at 06:00.

(AUD) NAB Business Confidence (Aug) Actual 2, Previous 2 at 07:00.