. Daily FX Analysis - Major Forex Pairs Surge Amid Central Bank Changes

Daily FX Analysis – Major Forex Pairs Surge Amid Central Bank Changes

Daily FX Analysis – Major Forex Pairs Surge Amid Central Bank Changes

06 Nov 2023

Introduction:

GBP/USD is edging closer to 1.2400, buoyed by a subdued US Dollar. Meanwhile, EUR/USD is making strides toward 1.0750, benefiting from the dollar’s weakness and positive sentiment. AUD/USD is eyeing a three-month high ahead of the RBA decision, while USD/JPY sees mild gains above mid-149.00s. The Japanese Yen is recovering from oversold conditions post-BoJ, as markets anticipate the BoJ’s eventual policy shift amid a different global central bank landscape.

GBP/USD:

GBP/USD closes in on 1.2400 amid subdued US Dollar.

The GBP/USD currency pair is near the 1.2400 level in European trading on Monday, continuing its climb to multi-week highs, which started last week. Despite a recovery in US Treasury bond yields, the US Dollar remains weakened by the impact of recent US NFP data, providing support for the pair’s upward movement.

GBP/USD gained bullish momentum, reaching a new 10-day peak above 1.2220 on Thursday. However, early Friday, the pair lost its upward momentum and entered a consolidation phase near 1.2200 as investors turned their focus to upcoming US data releases.

While the BoE event did not have a substantial effect on the value of Pound Sterling, the overall weakness of the US Dollar (USD) enabled GBP/USD to rise on Thursday.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.2338 | Positive Crossover | Bullish
  • MA 20: 1.2229 | Positive Crossover | Bullish
  • MA 50: 1.2200 | Positive Crossover | Bullish

Simple:

  • MA 5: 1.2331 | Positive Crossover | Bullish
  • MA 20: 1.2195 | Positive Crossover | Bullish
  • MA 50: 1.2174| Positive Crossover | Bullish

RSI (Relative Strength Index): 74.9| Buy Zone | Bullish

Stochastic Oscillator: 99.4| Buy Zone | Positive

Resistance And Support Levels:

  • R1: 1.2408| R2: 1.2612
  • S1: 1.2262| S2: 1.2088

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 1.2450 | Take Profit: 1.2612 | Stop Loss: 1.2342

EUR/USD:

EUR/USD rises towards 1.0750 ahead of Eurozone Sentix data.

During the European session on Monday, EUR/USD is making progress towards the 1.0750 level. The pair is profiting from a generally weakened US Dollar and a positive market sentiment leading up to the release of Eurozone Sentix data.

EUR/USD saw a 1.5% increase last week, reaching its highest point since mid-September, almost hitting 1.0750 on Friday, primarily due to ongoing weakness in the US Dollar (USD). As of early Monday, the pair is trading within a narrow range above 1.0700.

In the morning, Germany’s data revealed a 0.2% monthly increase in Factory Orders for September. This result exceeded analysts’ expectations, as they had anticipated a 1% decline, and it contributed to the Euro maintaining its stability.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.0713| Positive Crossover | Bearish
  • MA 20: 1.0639| Positive Crossover | Bearish
  • MA 50: 1.0607 | Positive Crossover | Bearish

Simple:

  • MA 5: 1.0709 | Positive Crossover | Bearish
  • MA 20: 1.0617| Positive Crossover | Bearish
  • MA 50: 1.0589 | Positive Crossover | Bearish

RSI (Relative Strength Index): 68.04| Buy Zone | Bullish

Stochastic Oscillator: 100.00| Buy zone | Positive

Resistance And Support Levels:

  • R1: 1.0758| R2: 1.0922
  • S1: 1.0631| S2: 1.0490

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 1.0812| Take Profit: 1.0922 | Stop Loss: 1.0735

AUD/USD:

AUD/USD extends gains towards a three-month high ahead of the RBA decision.

On Monday, the Australian Dollar remains robust, with its sights set on reaching a three-month peak. The AUD/USD pair is steadily advancing for the fourth consecutive day, in anticipation of the upcoming interest rate announcement by the Reserve Bank of Australia (RBA), scheduled for Tuesday.

AUD/USD is maintaining its momentum with a four-day winning streak, preparing for the upcoming announcement of the Reserve Bank of Australia’s (RBA) interest rate decision scheduled for Tuesday. The AUD/USD pair stands resilient at approximately 0.6520 in the Asian session on Monday, as it strives to reach a three-month high.

Expected to rise by 25 basis points, the RBA’s choice aligns with Australian inflation, which is hovering at the periphery and bolstering the Australian Dollar (AUD).

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.6494 | Positive Crossover | Bullish
  • MA 20: 0.6420| Positive Crossover | Bullish
  • MA 50: 0.6384 | Positive Crossover | Bullish

Simple:

  • MA 5: 0.6493 | Positive Crossover | Bullish
  • MA 20: 0.6400 | Positive Crossover | Bullish
  • MA 50: 0.6358| Positive Crossover | Bullish

RSI (Relative Strength Index): 72.89| Buy Zone| Bullish

Stochastic Oscillator: 100 |Buy Zone | Positive

Resistance And Support Levels:

  • R1: 0.6525| R2: 0.6652
  • S1: 0.6433 | S2: 0.6303

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.6560 | Take Profit: 0.6652 | Stop Loss: 0.6494

USD/JPY:

USD/JPY trades with a mild positive bias above mid-149.00s lack follow-through.

On the first day of the week, the USD/JPY pair witnessed some buying interest after a three-day correction from the 151.70 region, which was its highest level since October 2022, reached last Tuesday. Presently, the spot prices are hovering slightly above the mid-149.00s, with a nearly 0.15% gain for the day.

By the week’s end, the Japanese Yen (JPY) is showing strength in most currency pairs, as it rebounds from oversold levels after the significant post-Bank of Japan (BoJ) meeting sell-off that occurred on Tuesday.

The Yen might be gaining support due to the perception in the market that the Bank of Japan (BoJ) will, in due course, transition away from its extremely accommodative monetary policy, while most other central banks are anticipated to conclude their tightening measures.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 149.60 | Negative Crossover | Bearish
  • MA 20: 150.02| Negative Crossover | Bearish
  • MA 50: 149.85| Negative Crossover | Bearish

Simple:

  • MA 5: 149.57 | Negative Crossover | Bearish
  • MA 20: 150.13| Negative Crossover | Bearish
  • MA 50: 149.93| Negative Crossover | Bearish

RSI (Relative Strength Index): 42.54| Neutral Zone | Neutral

Stochastic Oscillator: 11.79| Sell Zone | Negative

Resistance And Support Levels:

  • R1: 150.28 | R2: 151.69
  • S1: 149.12 | S2: 146.34

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 148.36| Take Profit: 146.34 | Stop Loss: 149.92.

Elsewhere in the Forex Market

NZD/USD down 0.06% to 0.5992. The USD/CAD down 0.9% to 1.3644. The EUR/GBP up 0.1% at 0.8669. USD/CHF down 0.01% at 0.8973, EUR/JPY up 0.33% at 160.68, The USD/CNY down 0.31% at 7.2728, AUD/SEK down 0.24% at 7.0829, at the time of writing.

Key Economic Events & Data Release Today:

(JPY) Monetary Policy Meeting Minutes at 05:20.

(GBP) Construction PMI (Oct) Forecast 46.0, Previous 45.0 at 15:00.

(CAD) Ivey PMI (Oct) Previous 53.1 at 20:30.

(GBP) BoE MPC Member Pill Speaks at 22:30.