. Daily FX Analysis - NZD/USD Drops, USD/CAD Peaks, EUR/GBP Uncertain

Daily FX Analysis – NZD/USD Drops, USD/CAD Peaks, EUR/GBP Uncertain

Daily FX Analysis – NZD/USD Drops, USD/CAD Peaks, EUR/GBP Uncertain

19 Oct 2023

Introduction:

The provided content discusses recent developments in currency pairs in the foreign exchange market. The NZD/USD has touched a fresh low for 2023 as traders eagerly await insights from Fed Chair Jerome Powell. Meanwhile, the USD/CAD is near a two-week high, driven by falling oil prices and hawkish Fed predictions. The USD/CHF has rebounded on rising US Treasury yields, but geopolitical tensions in the Middle East add a layer of complexity. Finally, the EUR/GBP is staging a rebound amid uncertainties surrounding the Bank of England’s future policy moves, while the ECB’s potential interest rate hikes loom as a concern for the euro.

NZD/USD:

NZD/USD touches fresh 2023 trough, around 0.5825 area as traders look to Fed Powell.

For the third day in a row, the NZD/USD exchange rate declines and reaches its lowest point since November 2022.

The Greenback is supported and weighed down by the Israel-Hamas war and hawkish Fed predictions.

Ahead of Fed Chair Jerome Powell’s speech, traders are looking to the US macro data for some momentum.

For the third day in a row, the NZD/USD pair is under intense selling pressure. This is the sixth day in a row that the pair has seen a negative move. On Thursday during the Asian session, the pair hits its lowest level since early November 2022. Spot prices are down more than 0.40% on the day and are presently trading in the 0.5825 range. They are susceptible to continuing the recent downward trend from the 0.6055 level, or the monthly peak that was reached last week.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.5849 | Negative Crossover | Bearish
  • MA 20: 0.5904 | Negative Crossover | Bearish
  • MA 50: 0.5931 | Negative Crossover | Bearish

Simple:

  • MA 5: 0.5858 | Negative Crossover | Bearish
  • MA 20: 0.5922 | Negative Crossover | Bearish
  • MA 50: 0.5944| Negative Crossover | Bearish

RSI (Relative Strength Index): 31.53| Sell Zone | Bearish

Stochastic Oscillator: 2.49| Sell Zone | Negative

Resistance And Support Levels:

  • R1: 0.5915| R2: 0.6018
  • S1: 0.5816| S2: 0.5717

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 0.5788 | Take Profit: 0.5717 | Stop Loss: 0.5844

USD/CAD:

USD/CAD sits near two-week high, just below mid-1.3700s ahead of Fed Powell.

For the third day in a row, USD/CAD rises and reaches a nearly two-week high. Falling oil prices continue to boost the Canadian dollar and undercut the Loonie.

The dollar benefits from hawkish Fed predictions, rising US bond yields, and a more relaxed risk appetite.

Ahead of Fed Chair Powell’s speech, traders are looking to the US macro data for some momentum.

For the third day in a row, the USD/CAD pair sees modest improvement on Thursday and keeps up its bid tone, staying close to a two-week high through the early hours of the European session. With a 0.10% daily gain, spot prices are currently trading around the 1.3730 range and are still well supported by several reasons.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.3704| Positive Crossover | Bullish
  • MA 20: 1.3662 | Positive Crossover | Bullish
  • MA 50: 1.3629 | Positive Crossover | Bullish

Simple:

  • MA 5: 1.3695 | Positive Crossover | Bullish
  • MA 20: 1.3647 | Positive Crossover | Bullish
  • MA 50: 1.3633 | Positive Crossover | Bullish

RSI (Relative Strength Index): 63.46| Buy Zone | Bullish

Stochastic Oscillator: 96.5| Buy zone | Positive

Resistance And Support Levels:

  • R1: 1.3733| R2: 1.3892
  • S1: 1.3609| S2: 1.3451

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 1.3768| Take Profit: 1.3892 | Stop Loss: 1.3694

USD/CHF:
USD/CHF rebounds from intraday lows near 0.9000 on surging US Treasury yields.

Despite improving data on Switzerland’s trade balance, USD/CHF continues to rise.

In September, the Swiss balance of trade grew from 3,814 million to 6,316 million.

The US Dollar is supported in part by higher US bond yields.

As US Treasury yields rise, the USD/CHF pair recovers its intraday losses and trades higher on Thursday morning in the early European session, centred around 0.9000. Solid Swiss Trade Balance data that was made public on Thursday presented a challenge for the pair, though.

Furthermore, there’s a chance that the growing geopolitical unrest in the Middle East would boost demand for conventional safe-haven assets like the Swiss Franc (CHF).

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.8991 | Positive Crossover | Bullish
  • MA 20: 0.9021| Negative Crossover | Bearish
  • MA 50: 0.9046 | Negative Crossover | Bearish

Simple:

  • MA 5: 0.8988 | Positive Crossover | Bullish
  • MA 20: 0.9017 | Negative Crossover | Bearish
  • MA 50: 0.9094| Negative Crossover | Bearish

RSI (Relative Strength Index): 36.77| Sell Zone| Bearish

Stochastic Oscillator: 26.34| Sell Zone | Positive

Resistance And Support Levels:

  • R1: 0.9077| R2: 0.9167
  • S1: 0.8983 | S2: 0.8874

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 0.8943 | Take Profit: 0.8874 | Stop Loss: 0.8955

EUR/GBP:

EUR/GBP rebounds from recent losses near 0.8680.

At 0.8700, EUR/GBP is trading below the psychological threshold.

The pound sterling was under pressure due to the uncertainties surrounding the BoE’s future policy moves.

Additional interest rate hikes by the ECB are anticipated, which might hurt the euro.

Around 0.8680 is where EUR/GBP is trading higher on Thursday during the Asian session. The uncertainty surrounding the Bank of England’s (BoE) upcoming policy decision is viewed as a major headwind for the EUR/GBP pair.

The headline CPI in the UK remained stable at 6.7% in September, against forecasts that it would slightly decline to 6.6%, according to the most current consumer inflation numbers released on Wednesday. This result has stoked rumours that the Bank of England (BoE) may raise interest rates in November.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.8688 | Positive Crossover | Bullish
  • MA 20: 0.8666| Positive Crossover | Bullish
  • MA 50: 0.8654| Positive Crossover | Bullish

Simple:

  • MA 5: 0.8685 | Positive Crossover | Bullish
  • MA 20: 0.8656| Positive Crossover | Bullish
  • MA 50: 0.8657| Positive Crossover | Bullish

RSI (Relative Strength Index): 69.21| Buy Zone | Bullish

Stochastic Oscillator: 92.45| Buy | Positive

Resistance And Support Levels:

  • R1: 0.8717| R2: 0.8787
  • S1: 0.8664| S2: 0.8608

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.8736| Take Profit: 0.8787 | Stop Loss: 0.8702

Elsewhere in the Forex Market

GBP/USD down 0.19% to 1.2117. The EUR/USD up 0.01% to 1.0537. The AUD/USD down 0.49% at 0.6305. USD/JPY down 0.08% at 149.80, EUR/GBP up 0.21% at 0.8697., The USD/CNY up 0.01% at 7.3159, AUD/SEK down 0.16% at 6.9700, at the time of writing.

Key Economic Events & Data Release Today:

(AUD) Employment Change (Sep) Actual 6.7K, Forecast 20.0K, Previous 64.9K at 06:00.

(USD) Initial Jobless Claims Forecast 212K, Previous 209K at 18:00.

(USD) Philadelphia Fed Manufacturing Index (Oct) Forecast –6.4, Previous –13.5 at 18:00.

(USD) Existing Home Sales (Sep) Forecast 3.89M, Previous 4.04M at 19:30.

(USD) Fed Chair Powell Speaks at 21:30.