. Daily FX Analysis - insights, trades, geopolitical tensions.

Daily FX Analysis – insights, trades, geopolitical tensions.

Daily FX Analysis – insights, trades, geopolitical tensions.

17 Apr 2024

Introduction

GBP/USD maintains slight gains above 1.2400 before the release of UK CPI data. Amid a pause in the US Dollar rally and a resurgence in risk appetite, the pair sees support. However, traders adopt a cautious stance ahead of the crucial inflation figures. Conversely, EUR/USD inches towards 1.0650, grappling with Fed-ECB policy differences as investors eagerly await speeches from central bank officials.

Markets In Focus Today – GBP/USD

GBP/USD clings to minor gains above 1.2400 ahead of UK CPI data.

GBP/USD is clinging to recovery gains above 1.2400 in the European morning on Wednesday. The pair benefits from a pause in the US Dollar rally and a return of risk appetite. But traders refrain from placing fresh bets ahead of the key UK CPI inflation data. The Sterling has resumed its broader bearish trend during Tuesday’s London trading session. The uninspiring UK employment figures have endorsed the theory that the BoE might start cutting rates ahead of schedule, which has punished the GBP. The Claimant count range increased below expectations but wage growth eased to 6% YoY in the three months before February, from from 6.1% in the previous period. But above all, the unemployment rate increased to 4.2% disappointing the market that had forecasted a 4% rate, unchanged from the previous month.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2513 | Negative Crossover | Bearish
  • MA 20 : 1.2569 | Negative Crossover | Bearish
  • MA 50 : 1.2621 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2543 | Negative Crossover | Bearish
  • MA 20 : 1.2581 | Negative Crossover | Bearish
  • MA 50 : 1.2645 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 30.8011 | Sell Zone | Bearish

Stochastic   Oscillator : 5.9862 | Sell Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.2819 R2 : 1.2894
  • S1 : 1.2576 S2 : 1.2501

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 1.2492 | Take Profit : 1.2413 | Stop Loss : 1.2557

EUR/USD

EUR/USD recovers toward 1.0650, focus on ECB/ Fed speeches.

EUR/USD is recovering ground toward 1.0650 in early Europe on Wednesday. The US Dollar has entered a consolidative mode, allowing the Euro to heal its wounds. The EUR/USD rebound appears limited amid Fed-ECB policy divergence. ECB and Fed speeches awaited. For the sixth consecutive session, EUR/USD continued to face downward pressure, slipping to levels near 1.0600 and marking new lows for 2024 amidst the ongoing strength of the US Dollar (USD). This strengthening of the Greenback occurred as investors reconsidered the timing of a potential rate cut by the Federal Reserve (Fed), now anticipated to happen later than previously thought, potentially in December.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0701 | Negative Crossover | Bearish
  • MA 20 : 1.0753 | Negative Crossover | Bearish
  • MA 50 : 1.0804 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0735 | Negative Crossover | Bearish
  • MA 20 : 1.0772 | Negative Crossover | Bearish
  • MA 50 : 1.0814 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 27.9302 | Neutral Zone | Neutral

Stochastic   Oscillator : 3.6226 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.0928 R2 : 1.0978
  • S1 : 1.0765 S2 : 1.0715

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 1.0650 | Take Profit : 1.0585 | Stop Loss : 1.0698

AUD/USD

Australian Dollar pares gains amid improved US Dollar, Fed’s Beige Book due today.

The Australian Dollar (AUD) ends its three-day decline on Wednesday, bouncing back from levels not seen since mid-November. Nevertheless, hawkish remarks from Federal Reserve (Fed) officials and the influx of safe-haven flows could bolster the US Dollar (USD) and potentially limit the upside of AUD/USD in the short term. The Australian Dollar gains upward momentum as the ASX 200 Index rebounds after three consecutive days of losses. However, AUD encountered obstacles, possibly due to risk aversion, as investors awaited Israel’s response to Iran’s air strike on Saturday with caution. A Reuters report indicated that a third meeting of Israel’s war cabinet, scheduled for Tuesday to determine a reaction to Iran’s unprecedented direct attack, was postponed until Wednesday. Meanwhile, Western allies are considering swift imposition of new sanctions against Tehran to dissuade Israel from escalating the situation further.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6482 | Negative Crossover | Bearish
  • MA 20 : 0.6511 | Negative Crossover | Bearish
  • MA 50 : 0.6539 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6515 | Negative Crossover | Bearish
  • MA 20 : 0.6522 | Negative Crossover | Bearish
  • MA 50 : 0.6535 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 35.3432 | Sell Zone | Bearish

Stochastic   Oscillator : 3.8008 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.6628 R2 : 0.6673
  • S1 : 0.6483 S2 : 0.6438

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 0.6437 | Take Profit : 0.6368 | Stop Loss : 0.6491

USD/JPY

USD/JPY trades with mild losses below 155.00 on risk-aversion.

The USD/JPY pair trades with mild losses near 154.65 on Wednesday during the early Asian trading hours. The robust US economy and sticky inflation data have triggered the expectation that the Federal Reserve (Fed) might delay the easing cycle to September from June, which provides some support to the US Dollar (USD) against the Japanese Yen (JPY). However, the escalating tensions in the Middle East might boost safe-haven assets like JPY and cap the pair’s upside. Data released by the US Census Bureau showed on Tuesday that US Housing Starts fell 14.7% in March from a 12.7% increase in February (revised from 10.7%). The Building Permits declined 4.3% from a 2.3% rise (revised from 1.9%) in the previous reading. Industrial Production came in line with market expectation, rising 0.4% MoM in March from the 0.4% increase in February. On the other hand, the Bank of Japan (BoJ) is shifting to a more discretionary approach in setting policy, with less emphasis on inflation.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 153.2647 | Positive Crossover | Bullish
  • MA 20 : 152.3111 | Positive Crossover | Bullish
  • MA 50 : 150.6983 | Positive Crossover | Bullish

Simple :

  • MA 10 : 152.9391 | Positive Crossover | Bullish
  • MA 20 : 152.2045 | Positive Crossover | Bullish
  • MA 50 : 150.6413 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 79.1107 | Buy Zone | Bullish

Stochastic   Oscillator : 95.3093 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 152.0153 R2 : 153.3100
  • S1 : 147.8240 S2 : 146.5293

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 154.07 | Take Profit : 154.78 | Stop Loss : 153.70

Elsewhere In The Forex Market

USD/CAD up 0.01% to 1.3830, The NZD/USD up 0.28% to 0.5897. The EUR/GBP down 0.16% at 0.8532. USD/CHF up 0.02% at 0.9131. AUD/NZD down 0.23% at 1.0862, The USD/CNY up 0.02% at 7.2381, AUD/SEK up 0.09% at 7.0241, at the time of writing.

Key Economic Events & Data Release Today:

(NZD) CPI (QoQ) (Q1) Forecast –0.6%, Previous –0.5% at 04:15. (GBP) CPI (YoY) (Mar) Forecast 3.1%, Previous 4.4% at 11:30 (EUR) CPI (YoY) (Mar) Forecast 2.4%, Previous 2.6% at 14:30. (USD) Crude Oil Inventories Forecast 1.600M, Previous 5.841M at 20:00. (GBP) BoE Gov Bailey Speaks at 21:30. (EUR) ECB President Lagarde Speaks at 23:30.