. Daily FX Analysis - NZD/USD 0.5800, USD/CAD 1.3790, USD/CHF 0.8990, EUR/GBP 0.8700

Daily FX Analysis – NZD/USD 0.5800, USD/CAD 1.3790, USD/CHF 0.8990, EUR/GBP 0.8700

Daily FX Analysis – NZD/USD 0.5800, USD/CAD 1.3790, USD/CHF 0.8990, EUR/GBP 0.8700

26 Oct 2023

Introduction:

The currency markets are in motion as key factors influence major pairs. The NZD/USD faces downward pressure as investor expectations of a Reserve Bank of New Zealand interest rate hike diminish, while geopolitical uncertainties add to the New Zealand Dollar’s woes. Meanwhile, the USD/CAD benefits from a stronger US Dollar, following the Bank of Canada’s decision to maintain interest rates unchanged. In the USD/CHF pair, rising US Treasury bond yields continue to drive upward momentum, with a focus on forthcoming US GDP and Core PCE data. The EUR/GBP pair strengthens ahead of the ECB rate decision, amidst concerns of a potential UK recession.

NZD/USD:

NZD/USD moves below 0.5800, aim to reach November`s low.

The NZD/USD pair experiences a decline in value as investors reduce their anticipations of an interest rate increase by the Reserve Bank of New Zealand (RBNZ).

The New Zealand Dollar is under pressure due to geopolitical uncertainties. Risk appetite deteriorates following Israel’s Prime Minister Netanyahu’s announcement regarding a potential ground operation in Gaza.

During the Asian session on Thursday, the NZD/USD pair remains at an 11-month low, with its value around 0.5790. It’s possible that the pair may touch the low point recorded in November during this session.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.5808 | Negative Crossover | Bearish
  • MA 20: 0.5841 | Negative Crossover | Bearish
  • MA 50: 0.5884 | Negative Crossover | Bearish

Simple:

  • MA 5: 0.5812 | Negative Crossover | Bearish
  • MA 20: 0.5836 | Negative Crossover | Bearish
  • MA 50: 0.5907| Negative Crossover | Bearish

RSI (Relative Strength Index): 38.74| Sell Zone | Bearish

Stochastic Oscillator: 13.97| Sell Zone | Negative

Resistance And Support Levels:

  • R1: 0.5810| R2: 0.5869
  • S1: 0.5770| S2: 0.5695

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 0.5759 | Take Profit: 0.5695 | Stop Loss: 0.5798

USD/CAD:

USD/CAD trades strongly above the 1.3790 mark ahead of the US GDP data.

The USD/CAD pair garners interest from buyers above the 1.3800 level, thanks to a stronger US Dollar.

On Wednesday, the Bank of Canada (BoC) decided to keep interest rates unchanged.

 The speech by Israel’s Prime Minister is putting pressure on riskier assets, including the Canadian Dollar (Loonie).

Traders will keep a close eye on the US Q3 GDP data scheduled for release later on Thursday.

During the early Asian session on Thursday, the USD/CAD pair starts to move above the significant 1.3800 level. This upward movement is due to increased demand for the US Dollar (USD) amid a risk-averse market sentiment, which is providing some backing to the pair.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.3783| Positive Crossover | Bullish
  • MA 20: 1.3728| Positive Crossover | Bullish
  • MA 50: 1.3678 | Positive Crossover | Bullish

Simple:

  • MA 5: 1.3784 | Positive Crossover | Bullish
  • MA 20: 1.3723 | Positive Crossover | Bullish
  • MA 50: 1.3680 | Positive Crossover | Bullish

RSI (Relative Strength Index): 65.89| Buy Zone | Bullish

Stochastic Oscillator: 91.38| Buy zone | Neutral

Resistance And Support Levels:

  • R1: 1.3822| R2: 1.3951
  • S1: 1.3757| S2: 1.3658

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 1.3852| Take Profit: 1.3951 | Stop Loss: 1.3757

USD/CHF:

USD/CHF marks weekly highs around 0.8990, US GDP in attention.

The USD/CHF pair continues to advance as a result of the rising US Treasury bond yields.

Investors are eagerly anticipating the publication of US GDP and Core PCE data, aiming to gauge the current condition of the US economy.

For the third consecutive day, USD/CHF is on an upward trajectory, reaching weekly highs near 0.8990 in the Asian session on Thursday. The strengthening US Dollar (USD), driven by rising US bond yields, offers solid support to the USD/CHF pair.

Investors are expected to closely monitor the release of US Q3 Gross Domestic Product (GDP) data on Thursday and Core Personal Consumption Expenditures (PCE) on Friday. These economic indicators are likely to offer a significant insight into the United States’ economic performance.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.8970 | Positive Crossover | Bullish
  • MA 20: 0.8962| Positive Crossover | Bullish
  • MA 50: 0.8998 | Negative Crossover | Bearish

Simple:

  • MA 5: 0.8964 | Positive Crossover | Bullish
  • MA 20: 0.8949 | Positive Crossover | Bullish
  • MA 50: 0.9023| Negative Crossover | Bearish

RSI (Relative Strength Index): 55.94| Buying Zone| Bullish

Stochastic Oscillator: 89.03| Buy Zone | Positive

Resistance And Support Levels:

  • R1: 0.9004| R2: 0.9111
  • S1: 0.8913 | S2: 0.8801

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.9028 | Take Profit: 0.9111 | Stop Loss: 0.8975

EUR/GBP:

EUR/GBP strengthens above the 0.8700 area, ECB rate decision looms.

EUR/GBP is making advances beyond the 0.8700 level in anticipation of the European Central Bank (ECB) interest rate announcement.

Market expectations indicate that the ECB will likely maintain the current rate throughout the remainder of the year.

Concerns about a potential recession are putting pressure on the GBP due to discouraging economic data from the UK. The ECB’s monetary policy meeting is anticipated to be a closely monitored event.

During the early hours of European trading on Thursday, the EUR/GBP pairing maintains its upward trajectory for the second day in a row. Investors are keeping a keen eye on the European Central Bank’s (ECB) upcoming interest rate announcement, widely expected to keep the rate unchanged.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.8722 | Positive Crossover | Bullish
  • MA 20: 0.8705| Positive Crossover | Bullish
  • MA 50: 0.8682| Positive Crossover | Bullish

Simple:

  • MA 5: 0.8722 | Positive Crossover | Bullish
  • MA 20: 0.8707| Positive Crossover | Bullish
  • MA 50: 0.8672| Positive Crossover | Bullish

RSI (Relative Strength Index): 64.39| Buy Zone | Bullish

Stochastic Oscillator: 75.86| Buy | Positive

Resistance And Support Levels:

  • R1: 0.8733| R2: 0.8802
  • S1: 0.8702| S2: 0.8665

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.8740| Take Profit: 0.8802 | Stop Loss: 0.8702

Elsewhere in the Forex Market

GBP/USD down 0.21% to 1.2086. The EUR/USD down 0.17% to 1.0548. The AUD/USD down 0.01% at 0.6309. USD/JPY up 0.14% at 150.39, EUR/JPY down 0.04% at 158.62., The USD/CNY up 0.03% at 7.3190, AUD/SEK up 0.36% at 7.0585, at the time of writing.

Key Economic Events & Data Release Today:

(USD) Fed Chair Powell Speaks at 02:05.

(EUR) ECB Monetary Policy Statement at 17:45.

(EUR) ECB Interest Rate Decision (Oct) Forecast 4.50%, Previous 4.50% at 17:45.

(CAD) Manufacturing Sales (MoM) Previous 0.7% at 18:00.

(USD) Initial Jobless Claims Forecast 208K, Previous 198K at 18:00.

(USD) GDP (QoQ) (Q3) Forecast 4.3%, Previous 2.1% at 18:00.

(EUR) ECB President Lagarde Speak’s at 19:45.