. Daily FX Analysis - Major Forex Pairs Surge as Market Awaits Key Data

Daily FX Analysis – Major Forex Pairs Surge as Market Awaits Key Data

Daily FX Analysis – Major Forex Pairs Surge as Market Awaits Key Data

11 Oct 2023

Introduction:

In the world of currency trading, EUR/USD stands resolute at 1.0600, supported by an upbeat outlook and recent dovish sentiments from the Federal Reserve. All eyes now turn to the eagerly anticipated release of the Fed Minutes and crucial US PPI data. Meanwhile, GBP/USD consolidates below multi-week highs, AUD/USD faces pressure, and USD/JPY surges amid ongoing Middle East tensions. As investors await key inflation indicators, the currency market remains on high alert, ready to respond to evolving economic data and geopolitical events.

EUR/USD:

EUR/USD defends 1.0600 as focus shifts to US PPI, Fed Minutes.

As we approach Wednesday’s European open, the EUR/USD pair is maintaining its stability and holding 1.0600. In an optimistic mind-set and after the dovish remarks from the Fed, the US dollar licks its wounds. The emphasis will shift to the Fed Minutes and key US PPI inflation.

Following Tuesday’s surge, EUR/USD kept rising and on Wednesday reached 1.0630, the highest level in more than two weeks. The pair could rise even though markets appear to have become more cautious following the most recent risk surge if Federal Reserve (Fed) officials decide not to confirm further policy tightening later in the year.

The Producer Price Index (PPI) statistics for September will be included in the US economic docket. However, investors are likely to overlook the PPI readings ahead of Thursday’s much-awaited Consumer Price Index (CPI) report.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.0594 | Positive Crossover | Bullish
  • MA 20: 1.0566 | Positive Crossover | Bullish
  • MA 50: 1.0586 | Positive Crossover | Bullish

Simple:

  • MA 5: 1.0593 | Positive Crossover | Bullish
  • MA 20: 1.0535 | Positive Crossover | Bullish
  • MA 50: 1.0576 | Positive Crossover | Bullish

RSI (Relative Strength Index): 58.8| Buy Zone | Bullish

Stochastic Oscillator: 99.04| Buy Zone | Positive

Resistance And Support Levels:

  • R1: 1.0616| R2: 1.0763
  • S1: 1.0527 | S2: 1.0443

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 1.0671 | Take Profit: 1.0763 | Stop Loss: 1.0602

GBP/USD:

GBP/USD consolidates below multi-week highs at 1.2300.

Wednesday morning in Europe, the GBP/USD pair is maintaining its gains below 1.2300 after dropping from a nearly three-week high of 1.2304. The US Dollar is undercut by declining US bond yields and an upbeat risk sentiment, which supports the pair. Traders are currently watching the FOMC minutes and US PPI for any significant catalysts.

GBP/USD spent the Asian session on Tuesday in a narrow channel around 1.2200, but on Wednesday it gained positive momentum and surged to its highest level in more than two weeks over 1.2250.

Neel Kashkari, the president of the Minneapolis Fed, and Fed Governor Christopher Waller are expected to speak later in the day.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.2263| Positive Crossover | Bullish
  • MA 20: 1.2211 | Positive Crossover | Bullish
  • MA 50: 1.2244 | Positive Crossover | Bullish

Simple:

  • MA 5: 1.2264 | Positive Crossover | Bullish
  • MA 20: 1.2176 | Positive Crossover | Bullish
  • MA 50: 1.2213 | Positive Crossover | Bullish

RSI (Relative Strength Index): 58.97| Buy Zone | Bullish

Stochastic Oscillator: 96.45 | Buy Zone | Neutral

Resistance And Support Levels:

  • R1: 1.2296| R2: 1.2462
  • S1: 1.2142| S2: 1.2030

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy 1.2342| Take Profit: 1.2462 | Stop Loss: 1.2265

AUD/USD:

AUD/USD stays pressured below 0.6450 amid risk-on mood, dovish RBA-speak.

The AUD/USD pair is continuing to decline from its weekly highs of 0.6446 on RBA Kent’s less-than-hawkish remarks. Amidst a lull in the US Dollar’s drop, the pair dismisses the optimism of the market, expecting the Fed Minutes and important US PPI inflation data.

The AUD/USD slightly increased and reached a weekly high of 0.6433. It has gained for the past five days in a row, levelling off below the 20-day Simple Moving Average (SMA) and stabilising above 0.6400. As risk appetite improved and US rates stayed close to recent lows, the US dollar began to drop, which was the main driver of the move.

US inflation statistics this week will be crucial since the market is still keeping a close eye on the events in the Middle East.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.6413 | Positive Crossover | Bullish
  • MA 20: 0.6487| Positive Crossover | Bullish
  • MA 50: 0.6394 | Positive Crossover | Bullish

Simple:

  • MA 5: 0.6415 | Positive Crossover | Bullish
  • MA 20: 0.6363 | Positive Crossover | Bullish
  • MA 50: 0.6397| Positive Crossover | Bullish

RSI (Relative Strength Index): 56.12 | Buy Zone | Bullish

Stochastic Oscillator: 93.07| Buy Zone| Neutral

Resistance And Support Levels:

  • R1: 0.6431 | R2: 0.6525
  • S1: 0.6356 | S2: 0.6279

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.6463 | Take Profit: 0.6525 | Stop Loss: 0.6421

USD/JPY:

USD/JPY moves upward 149.00, US data eyed.

For the second day in a row, the USD/JPY pair continues to rise, closing the Asian session on Wednesday at 148.80. Despite the Middle East tensions, the pair recovered in the previous session due to a strong risk sentiment.

The safe-haven Japanese Yen (JPY) could be under pressure from the positive risk attitude during the Middle East war, which would be a major factor supporting the USD/JPY pair.

Investors’ focus for the week in terms of economic data will be on inflation figures, with the Producer Price Index (PPI) on Wednesday, followed by the FOMC meeting minutes and the Consumer Price Index (CPI) on Thursday.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 148.76 | Negative Crossover | Bearish
  • MA 20: 148.91| Negative Crossover | Bearish
  • MA 50: 148.64| Positive Crossover | Bullish

Simple:

  • MA 5: 148.76 | Negative Crossover | Bearish
  • MA 20: 149.98| Negative Crossover | Bearish
  • MA 50: 148.82| Negative Crossover | Bearish

RSI (Relative Strength Index): 44.91| Neutral Zone | Neutral

Stochastic Oscillator: 36.04| Sell | Negative Zone

Resistance And Support Levels:

  • R1: 149.40 | R2: 150.48
  • S1: 148.47| S2: 147.21

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 148.11 | Take Profit: 147.21 | Stop Loss: 148.86

Elsewhere in the Forex Market

NZDUSD down 0.38% to 0.6022. The USD/CAD up 0.11% to 1.3598. The EUR/GBP up 0.05% at 0.8635. USD/CHF down 0.01% at 0.9033, CAD/JPY down 0.12% at 109.34, The USD/CNY up 0.05% at 7.2987, AUD/SEK up 0.17% at 7.0064, at the time of writing.

Key Economic Events & Data Release Today:

(EUR) German CPI (MoM) (Sep) Actual 0.3%, Forecast 0.3%, Previous 0.3% at 11:30.

(CAD) Building Permits (MoM) (Aug) Forecast 0.5%, Previous –1.5% at 18:00.

(USD) PPI (MoM) (Sep) Forecast 0.3%, Previous 0.7% at 18:00.

(USD) FOMC Meeting Minutes at 23:30.