. Daily FX Analysis - Major Currency Moves Amid Positive US Economic Indicators

Daily FX Analysis – Major Currency Moves Amid Positive US Economic Indicators

Daily FX Analysis – Major Currency Moves Amid Positive US Economic Indicators

13 Oct 2023

Introduction:

In the dynamic world of currency markets, we delve into the latest developments for key currency pairs. GBP/USD grapples with recent losses amid encouraging US data, while EUR/USD sees a modest rise in the wake of a declining US dollar. AUD/USD’s fate hinges on US data, and USD/JPY remains below the 150.00 mark, with a close eye on US consumer sentiment. These pairs are navigating through an intricate web of economic indicators and central bank policies, shaping the course of international exchange rates.

GBP/USD:

GBP/USD is trading around 1.2200 following recent losses on upbeat US data.

GBP/USD is trading higher towards the psychological threshold of 1.2200, retracing some of the recent losses that were recorded on Thursday. But the upbeat economic news out of the US presented difficulties for the duo.

Early on Thursday, the GBP/USD pair struggled to maintain its positive momentum and entered a consolidation period above 1.2300. US inflation statistics for September could impact the US Dollar’s (USD) value and drive the pair’s movement in the second half of the day.

Along with the weekly Initial Jobless Claims, September Consumer Price Index (CPI) data will be included in the US economic schedule. It is anticipated that the monthly Core CPI, which excludes erratic food and energy prices, will increase by 0.3%.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.2223 | Negative Crossover | Bearish
  • MA 20: 1.2224 | Negative Crossover | Bearish
  • MA 50: 1.2224 | Negative Crossover | Bearish

Simple:

  • MA 5: 1.2232 | Negative Crossover | Bearish
  • MA 20: 1.2221 | Negative Crossover | Bearish
  • MA 50: 1.2198| Positive Crossover | Bullish

RSI (Relative Strength Index): 48.21| Buy Zone | Bullish

Stochastic Oscillator: 14.64| Sell Zone | Negative

Resistance And Support Levels:

  • R1: 1.2304| R2: 1.2443
  • S1: 1.2169| S2: 1.2042

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.2138 | Take Profit: 1.2042 | Stop Loss: 1.2219

EUR/USD:

EUR/USD rises to the mid-1.0500s due to a declining US dollar.

As we move into early Europe on Friday, the EUR/USD pair is trading near 1.0550 and is finding support close to the weekly low, which is located around 1.0520. Despite a depressing outlook, the pair benefits from the widespread decline in the US Dollar and bond yields. The focus is on US statistics and the Lagarde speech.

After registering significant losses on Thursday, the EUR/USD pair steadied at roughly 1.0550 early on Friday. The technical picture indicates a slowdown in the bullish momentum, but if the pair can turn 1.0570 into support, buyers might become interested.

A positive start on Wall Street might make it harder for the USD to find buyers. However, if investors keep pricing in a higher likelihood of another 25 basis points, EUR/USD might decline. Before the year ends, the Federal Reserve will raise rates.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.0562| Negative Crossover | Bearish
  • MA 20: 1.0565 | Negative Crossover | Bearish
  • MA 50: 1.0538 | Negative Crossover | Bearish

Simple:

  • MA 5: 1.0568 | Negative Crossover | Bearish
  • MA 20: 1.0564 | Negative Crossover | Bearish
  • MA 50: 1.0564 | Negative Crossover | Bearish

RSI (Relative Strength Index): 47.89| Buy Zone | Bullish

Stochastic Oscillator: 17.78 | Sell Zone | Negative

Resistance And Support Levels:

  • R1: 1.0605| R2: 1.0706
  • S1: 1.0524| S2: 1.0441

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.0501| Take Profit: 1.0441 | Stop Loss: 1.0547

AUD/USD:

After trimming its daily gains, the Australian dollar stays flat while attention turns to US data.

The Australian dollar declines intraday gains and then drifts sideways. After the US headline inflation was released, the Australian dollar fell. Expectations of consumer inflation increased the likelihood that the RBA will hike interest rates. As US consumer sentiment was expected, the US dollar strengthened after a plethora of positive US statistics.

Following a week of positive economic data releases from the United States (US), the Australian Dollar (AUD) ends a two-day losing streak. The direction of US Federal Reserve’s (Fed) monetary policy has come back into focus as a result of US inflation exceeding forecasts and first unemployment claims being lower than expected.

Consumer expectations for inflation have increased in Australia; this trend is probably due to rising oil costs. The Reserve Bank of Australia (RBA) meeting minutes and employment data will be released in the following week, which are the next focal areas.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.6343 | Negative Crossover | Bearish
  • MA 20: 0.6372| Negative Crossover | Bearish
  • MA 50: 0.6386 | Negative Crossover | Bearish

Simple:

  • MA 5: 0.6355 | Negative Crossover | Bearish
  • MA 20: 0.6376 | Negative Crossover | Bearish
  • MA 50: 0.6386| Negative Crossover | Bearish

RSI (Relative Strength Index): 39.87 | Sell Zone | Bearish

Stochastic Oscillator: 3.46| Sell Zone | Negative

Resistance And Support Levels:

  • R1: 0.6385 | R2: 0.6485
  • S1: 0.6302 | S2: 0.6196

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 0.6268 | Take Profit: 0.6196 | Stop Loss: 0.6323

USD/JPY:

USD/JPY stays below 150.00; close attention to US consumer sentiment.

With a target of breaking the three-day winning run, the USD/JPY pair is expected to trade near 149.80 on Friday during the Asian session, in line with the key support level of 150.00. The multitude of positive economic data points from the United States (US) provided support for the pair’s upward movement.

Investors appear to be speculating that the US Federal Reserve (Fed) would drop its plan to raise interest rates.

Because to the Bank of Japan’s (BoJ) ongoing ultra-easy monetary policy, the value of the Japanese yen (JPY) declines. Additionally, Asahi Noguchi, a board member of the BoJ, is in the news this Thursday, emphasising that the central bank “cannot be optimistic about acceleration in wage growth.”

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 149.51 | Positive Crossover | Bullish
  • MA 20: 149.18| Positive Crossover | Bullish
  • MA 50: 148.82| Positive Crossover | Bullish

Simple:

  • MA 5: 149.52 | Positive Crossover | Bullish
  • MA 20: 149.03| Positive Crossover | Bullish
  • MA 50: 149.01| Positive Crossover | Bullish

RSI (Relative Strength Index): 59.46| Buy Zone | Bullish

Stochastic Oscillator: 90.98| Buy | Neutral

Resistance And Support Levels:

  • R1: 149.78| R2: 151.93
  • S1: 148.49 | S2: 147.28

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 150.30 | Take Profit: 151.93 | Stop Loss: 149.26

Elsewhere in the Forex Market

NZD/USD down 0.15% to 0.5917. The USD/CAD down 0.15% to 1.3669. The USD/CHF down 0.21% at 0.9064. EUR/GBP down 0.12% at 0.8636, CAD/JPY up 0.06% at 109.48, The USD/CNY up 0.07% at 7.3074, AUD/SEK down 0.32% at 6.9245, at the time of writing.

Key Economic Events & Data Release Today:

(NZD) Business NZ PMI (Sep) Actual 45.3, Previous 46.1 at 03:00.

(CNY) CPI (MoM) (Sep) Actual 0.2%, Forecast 0.3%, Previous 0.3% at 07:00.

(GBP) BoE Gov Bailey Speaks at 13:30.

(EUR) Industrial Production (MoM) (Aug) Forecast 0.1%, Previous –1.1% at 14:30.

(EUR) ECB President Lagarde Speaks at 18:30.