. Daily FX Analysis - Global currencies defy norms, market dynamics.

Daily FX Analysis – Global currencies defy norms, market dynamics.

Daily FX Analysis – Global currencies defy norms, market dynamics.

25 Mar 2024

Introduction

Amid a subdued start to the week, EUR/USD maintains its position above 1.0800 during Monday’s European trading hours. With the US Dollar stabilizing after last week’s rally, the pair remains steady, bolstered by a mix of market sentiment. Attention remains fixed on the US Dollar and forthcoming Federal Reserve speeches. Meanwhile, GBP/USD rebounds as the Greenback softens, nearing the 1.2600 mark, supported by Fitch Ratings’ positive revision of the UK’s sovereign credit outlook. Elsewhere, USD/JPY dips slightly amidst intervention speculation from Japan’s FX chief, while the Australian Dollar holds its ground following gains, awaiting Aussie Consumer Confidence data.

Markets In Focus Today – EUR/USD

EUR/USD holds above 1.0800 on a weaker US Dollar, eyes on US data, Fed’s Bostic speech

EUR/USD gains ground around 1.0816 on the softer USD. FOMC’s Chair Powell said the recent elevated CPI inflation data hadn’t changed the overall view that inflation is trending lower. ECB’s Scicluna said the rate cut as soon as April could be warranted and shouldn’t be ruled out. Investors will focus on the Chicago Fed National Activity Index, US New Home Sales, and the Fed’s Bostic speech on Monday. The EUR/USD pair kicks off the new week on a positive note above the 1.0800 mark amid the softer US Dollar (USD). The highlights for this week will be the release of German February Retail Sales and US Gross Domestic Product (GDP) growth numbers for the fourth quarter (Q4). At the press time, EUR/USD is trading at 1.0816, adding 0.08% on the day.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0863 | Negative Crossover | Bearish
  • MA 20 : 1.0865 | Negative Crossover | Bearish
  • MA 50 : 1.0857 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0879 | Negative Crossover | Bearish
  • MA 20 : 1.0877 | Negative Crossover | Bearish
  • MA 50 : 1.0840 | Negative Crossover | Bearish

RSI (Relative Strength Index): 43.8522 | Neutral Zone | Neutral

Stochastic   Oscillator : 9.7413 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.0876 R2 : 1.0924
  • S1 : 1.0722 S2 : 1.0674

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 1.0830 | Take Profit: 1.0785 | Stop Loss: 1.0865

GBP/USD

GBP/USD rebounds on subdued US Dollar, inches higher to near 1.2600.

GBP/USD gains ground as the Greenback weakens on speculations of a Fed rate cut in June. The higher US Treasury yields could have provided support for the US Dollar. Fitch Ratings revised the UK’s sovereign credit outlook to stable from negative last Friday, affirming its sovereign credit rating at AA-.GBP/USD snaps a two-day losing streak, retracing recent losses and trading near 1.2600 during the early European session on Monday. The decline in the US Dollar (USD) appears to be the catalyst underpinning the GBP/USD pair. The dovish sentiment surrounding the Federal Reserve’s stance on the trajectory of interest rates, with market sentiment leaning towards the Fed initiating interest rate cuts starting in June, is weakening the US Dollar. The US Dollar Index (DXY) declines to near 104.30 as the 2-year and 10-year yields on US Treasury bonds hold at 4.60% and 4.21%, respectively, by the press time. The US Dollar (USD) fails to cheer the uptick in US Treasury yields.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2693 | Negative Crossover | Bearish
  • MA 20 : 1.2703 | Negative Crossover | Bearish
  • MA 50 : 1.2681 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2719 | Negative Crossover | Bearish
  • MA 20 : 1.2720 | Negative Crossover | Bearish
  • MA 50 : 1.2679 | Negative Crossover | Bearish

RSI (Relative Strength Index): 40.7980 | Neutral Zone | Neutral

Stochastic   Oscillator : 7.4234 | Neutral Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.2735 R2 : 1.2794
  • S1 : 1.2541 S2 : 1.2482

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 1.2629 | Take Profit: 1.2577 | Stop Loss : 1.2673

USD/JPY

USD/JPY loses ground on Monday after the intervention talk.

USD/JPY drops slightly after intervention talk from Japan’s chief of FX, Masato Kanda. Recent weakness in the Yen should be attributed to speculation, not fundamentals, Kanda said. The authorities may intervene to correct the situation, propping up the Yen. USD/JPY is trading down almost a tenth of a percent in the 151.300s at the start of the new week. It has lost ground after intervention talk from Japan’s currency chief, Masato Kanda heightens speculation the Japanese authorities are about to use market operations to prop up their currency. Kanda, the vice-finance minister for international affairs was responding to the weakness experienced by the Yen, which remains at historic lows, after the Bank of Japan’s (BoJ) historic decision to raise interest rates for the first time since 2007 at their policy meeting last Tuesday. The move seemed highly unexpected since higher interest rates are usually a factor that strengthens not weakens currencies.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 150.3196 | Positive Crossover | Bullish
  • MA 20 : 149.8017 | Positive Crossover | Bullish
  • MA 50 : 148.8979 | Positive Crossover | Bullish

Simple :

  • MA 10 : 149.7977 | Positive Crossover | Bullish
  • MA 20 : 149.5522 | Positive Crossover | Bullish
  • MA 50 : 149.1004 | Positive Crossover | Bullish

RSI (Relative Strength Index): 63.8875 | Buy Zone | Bullish

Stochastic   Oscillator : 92.5558 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 150.8153 R2 : 151.9920
  • S1 : 147.0060 S2 : 145.8293

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 150.874 | Take Profit: 151.875 | Stop Loss: 150.256

AUD/USD

Australian Dollar holds position after trimming gains, Aussie Consumer Confidence awaited.

Australian Dollar rises on stronger Chinese Yuan and higher ASX 200 on Monday.Australia’s government has committed to backing a minimum wage increase aligned with inflation in 2024.CNY experienced a significant upward movement due to FX intervention, with Chinese major state banks observed selling USD/CNY. Fed Atlanta President Raphael Bostic revised his earlier forecast of two interest rate cuts this year, now expecting only one. The Australian Dollar (AUD) starts the week by recovering its recent losses registered in the previous session. The AUD/USD pair trades higher on Monday despite a slight decrease in the US Dollar (USD) amid higher US Treasury yields. Investors are expected to closely monitor the Australian monthly Consumer Price Index (CPI) data for February and the US Gross Domestic Product (GDP) for the fourth quarter of 2023.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6553 | Negative Crossover | Bearish
  • MA 20 : 0.6556 | Negative Crossover | Bearish
  • MA 50 : 0.6564 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6565 | Negative Crossover | Bearish
  • MA 20 : 0.6556 | Negative Crossover | Bearish
  • MA 50 : 0.6550 | Negative Crossover | Bearish

RSI (Relative Strength Index): 45.0836 | Neutral Zone | Neutral

Stochastic   Oscillator : 29.0807 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.6580 R2 : 0.6620
  • S1 : 0.6453 S2 : 0.6413

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Stop Sell: 0.6511 | Take Profit: 0.6467 | Stop Loss: 0.6545

Elsewhere In The Forex Market

NZD/USD up 0.29% to 0.6002, The USD/CHF up 0.01% to 0.8981. The EUR/GBP up 0.08% at 0.8549. USD/JPY down 0.07% at 151.30. AUD/NZD is up 0.09% at 1.0874, The USD/CNY is down 0.27% at 7.2096, and AUD/SEK is up 0.17% at 6.8947, at the time of writing.

Key Economic Events & Data Release Today:

(JPY) Monetary Policy Meeting Minutes at 05:20. (EUR) ECB President Lagarde Speaks at 15:30. (USD) Building Permits Forecast 1.518M, Previous 1.489M at 17:30. (USD) New Homes Sales (Feb) Forecast 675K, Previous 661K at 19:30.