. Daily FX Analysis - Global Currencies Hold Ground Amidst Economic Shifts

Daily FX Analysis – Global Currencies Hold Ground Amidst Economic Shifts

Daily FX Analysis – Global Currencies Hold Ground Amidst Economic Shifts

10 Nov 2023

Introduction:

 “In the financial markets today, various currency pairs are in focus. GBP/USD holds steady above 1.2200 despite UK GDP data, while EUR/USD faces bearish pressure. USD/CHF is on the rise following Fed Chair Powell’s hawkish comments, and EUR/GBP grapples with key resistance levels. Additionally, investors are eagerly awaiting ECB President Christine Lagarde’s speech for insights into the Eurozone’s economic outlook.”

GBP/USD:

GBP/USD holds above 1.2200 after the UK GDP.

The GBP/USD remains in a tight range just above 1.2200, fluctuating consistently. UK data indicated a 0.6% annual GDP growth in Q3, surpassing market expectations of 0.5%. Despite this positive outcome, it did not contribute to a surge in the value of the Pound Sterling.

Following three consecutive days of closing in the negative on Wednesday, GBP/USD slightly rose and steadied around 1.2300 during Thursday’s European session.

At a later time today, Jerome Powell, the Chairman of the Federal Reserve (Fed), is scheduled to address an International Monetary Fund (IMF) panel discussing ‘Monetary policy challenges in a global economy.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.2240 | Negative Crossover | Bearish
  • MA 20: 1.2253 | Negative Crossover | Bearish
  • MA 50: 1.2226 | Positive Crossover | Bullish

Simple:

  • MA 5: 1.2243 | Negative Crossover | Bearish
  • MA 20: 1.2277 | Negative Crossover | Bearish
  • MA 50: 1.2199| Positive Crossover | Bullish

RSI (Relative Strength Index): 46.7| Buy Zone | Bullish

Stochastic Oscillator: 1.56| Sell Zone | Neutral

Resistance And Support Levels:

  • R1: 1.2322| R2: 1.2461
  • S1: 1.2212| S2: 1.2058

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.2172 | Take Profit: 1.2058 | Stop Loss: 1.2259

EUR/USD:

EUR/USD stays under modest bearish pressure, declines towards 1.0650.

During the Asian session, EUR/USD traded within a narrow range under 1.0700 but began a slight decline in the early European session. Despite Fed Chairman Powell’s hawkish remarks, the US Dollar remains strong, preventing the pair from making significant gains.

After Federal Reserve Chair Jerome Powell’s comments, the EUR/USD notably shifted downward. The pair descended towards its weekly lows, displaying a distinct bearish inclination.

ECB officials countered certain recent market views leaning towards dovishness, backing the Euro. Nonetheless, the market foresees the ECB maintaining unchanged rates, with discussions revolving around the timing of the initial rate cut.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.0678| Negative Crossover | Bearish
  • MA 20: 1.0671| Negative Crossover | Bearish
  • MA 50: 1.0637 | Positive Crossover | Bullish

Simple:

  • MA 5: 1.0683 | Negative Crossover | Bearish
  • MA 20: 1.0684 | Negative Crossover | Bearish
  • MA 50: 1.0624 | Positive Crossover | Bullish

RSI (Relative Strength Index): 51.95| Buy Zone | Bullish

Stochastic Oscillator: 1.62| Sell zone | Negative

Resistance And Support Levels:

  • R1: 1.0752| R2: 1.0863
  • S1: 1.0657| S2: 1.0538

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.0618| Take Profit: 1.0538 | Stop Loss: 1.0680

USD/CHF:

USD/CHF moves upward near 0.9030 post Fed Chair Powell’s hawkish comments.

USD/CHF is advancing due to the increasing probability of another interest rate increase by the Fed. The hawkish stance of Fed Chair Powell resulted in a rise in US Treasury yields.

Initial Jobless Claims in the US decreased to 217K, down from the previous week’s 220K.

For the second successive session, USD/CHF continues its upward movement, potentially linked to the hawkish remarks made by US Federal Reserve (Fed) Chair Jerome Powell during the International Monetary Fund (IMF) event on Thursday. The USD/CHF is trading higher around 0.9030 in the Asian trading hours on Friday.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.9021 | Positive Crossover | Bullish
  • MA 20: 0.9012| Positive Crossover | Bullish
  • MA 50: 0.9012 | Positive Crossover | Bullish

Simple:

  • MA 5: 0.9018 | Positive Crossover | Bullish
  • MA 20: 0.9009 | Positive Crossover | Bullish
  • MA 50: 0.8993| Positive Crossover | Bullish

RSI (Relative Strength Index): 55.38| Buying Zone| Bullish

Stochastic Oscillator: 96.78 |Buying Zone | Positive

Resistance And Support Levels:

  • R1: 0.9066| R2: 0.9178
  • S1: 0.8985 | S2: 0.8911

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.9097 | Take Profit: 0.9178 | Stop Loss: 0.9047

EUR/GBP:

EUR/GBP struggles to extend rally ahead of UK Q3 GDP data.

EUR/GBP encounters a moderate barrier around 0.8730, with potential for further upward movement. BoE’s Pill cautioned that maintaining elevated interest rates over an extended period might lead to an overly significant economic deceleration.

The EUR/GBP pair experiences selling pressure as it continues its climb above 0.8730, with investors exercising caution before the release of the United Kingdom’s Gross Domestic Product (GDP) data for the third quarter of 2023.

In the Eurozone realm, investors are anticipating European Central Bank (ECB) President Christine Lagarde’s speech scheduled for 12:30 GMT. It is anticipated that Lagarde will provide direction on interest rates and offer insights into the economic performance outlook.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.8724 | Positive Crossover | Bullish
  • MA 20: 0.8708| Positive Crossover | Bullish
  • MA 50: 0.8699| Positive Crossover | Bullish

Simple:

  • MA 5: 0.8724 | Positive Crossover | Bullish
  • MA 20: 0.8701| Positive Crossover | Bullish
  • MA 50: 0.8707| Positive Crossover | Bullish

RSI (Relative Strength Index): 61.28| Buying Zone | Bullish

Stochastic Oscillator: 98.82| Buy Zone | Neutral

Resistance And Support Levels:

  • R1: 0.8736 | R2: 0.8789
  • S1: 0.8697 | S2: 0.8660

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.8747| Take Profit: 0.8789 | Stop Loss: 0.8717.

Elsewhere in the Forex Market

NZD/USD up 0.05% to 0.5895. The USD/CAD down 0.05% to 1.3802. The USD/JPY up 0.01% at 151.35. USD/CHF up 0.03% at 0.9030, EUR/JPY up 0.12% at 161.61, The USD/CNY up 0.11% at 7.2913, AUD/SEK down 0.17% at 6.9444, at the time of writing.

Key Economic Events & Data Release Today:

(USD) Fed Chair Powell Speaks at 00:30.

(GBP) GDP (QoQ) (Q3) Actual 0.0%, Forecast –0.1%, Previous 0.2% at 12:30.

(GBP) GDP (MoM) (Sep) Actual 0.2%, Forecast 0.0%, Previous 0.2% at 12:30.

(GBP) Manufacturing Production (MoM) (Sep) Actual 0.1%, Forecast 0.3%, Previous-0.8% at 12:30.

(EUR) ECB President Lagarde Speaks at 18:00.