. Weekly FX Analysis - Pound, Euro, Aussie, Yen.

Weekly FX Analysis – Pound, Euro, Aussie, Yen.

Weekly FX Analysis – Pound, Euro, Aussie, Yen.

16 Mar 2024

Introduction

After reaching seven-month highs, the Pound Sterling faces a downturn against the US Dollar, prompting a correction. GBP/USD’s trajectory hinges on upcoming Fed and BoE announcements, with a critical support level at 1.2700. Meanwhile, the US Dollar strengthens on reduced Fed rate cut expectations, shaping the landscape for currency pairs like EUR/USD and AUD/USD amidst pivotal economic data releases. The USD/JPY jumps to 148.80 on hopes that the BoJ will maintain its ultra-loose monetary policy stance on Tuesday.

Markets In Focus Today – GBP/USD

GBP/USD Pound Sterling loses shine after hitting seven-month highs.

The Pound Sterling corrected from seven-month highs against the US Dollar.GBP/USD is likely to take further cues from the upcoming Fed and BoE policy announcements.GBP/USD needs to defend strong support near 1.2700 to negate the recent bearish bias. The Pound Sterling (GBP) gave into the US Dollar (USD) resurgence, as GBP/USD registered a sharp correction from seven-month highs of 1.2894 reached a week ago. The US Dollar jumped back on the bids, mainly underpinned by less dovish US Federal Reserve (Fed) policy expectations. Traders pared bets for a June interest rate cut by the Fed following the release of the inflation data from the United States (US).

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2756 | Negative Crossover | Bearish
  • MA 20 : 1.2725 | Positive Crossover | Bullish
  • MA 50 : 1.2681 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2769 | Negative Crossover | Bearish
  • MA 20 : 1.2709 | Positive Crossover | Bullish
  • MA 50 : 1.2685 | Positive Crossover | Bullish

RSI (Relative Strength Index): 53.6507 | Buy Zone | Bullish

Stochastic   Oscillator : 55.5556 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.2735 R2 : 1.2794
  • S1 : 1.2541 S2 : 1.2482

Overall Sentiment: Bullish Market Direction : Buy

Trade Suggestion: Limit Buy: 1.2691 | Take Profit: 1.2822 | Stop Loss: 1.2614

EUR/USD

EUR/USD trades just above the make-or-break level.

EUR/USD has fallen to the 1.0800s, close to a critical level for the short-term trend. Further weakness could tip the near-term outlook in favor of bears. Empire State Manufacturing, Michigan Sentiment, US Industrial Production, and commentary from ECB’s Nagel round off the week.EUR/USD is trading in the 1.0800s on the last day of the week after taking a step down from its previous range in the 1.0900s. The catalyst seems to be a mixture of better-than-expected US macro data and ECB’s chief economist Philip Lane pushing back on early rate-cut expectations. US data on Friday in the main built on Thursday’s gains. Industrial Production came out at 0.1% in February, beating economists’ expectations of flat growth.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0897 | Negative Crossover | Bearish
  • MA 20 : 1.0875 | Positive Crossover | Bullish
  • MA 50 : 1.0858 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0907 | Negative Crossover | Bearish
  • MA 20 : 1.0864 | Positive Crossover | Bullish
  • MA 50 : 1.0851 | Positive Crossover | Bullish

RSI (Relative Strength Index): 53.5103 | Buy Zone | Bullish

Stochastic   Oscillator : 59.8346 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 1.0876 R2 : 1.0924
  • S1 : 1.0722 S2 : 1.0674

Overall Sentiment: Neutral Market Direction: Buy

Trade Suggestion: Limit Buy: 1.0853 | Take Profit: 1.0965 | Stop Loss: 1.0789

AUD/USD

AUD/USD stuck on the low end of near-term losses.

AUD/USD cycles just north of 0.6550.Little Aussie data to chew on leaves AUD/USD in the lurch.Next week: double-header showings from RBA and Fed. The AUD/USD is churning just above 0.6550 as markets prepare for next week’s double feature from the Reserve Bank of Australia (RBA) and the US Federal Reserve (Fed). Both central banks are broadly expected to hold interest rates steady as investors focus on when rate cuts will come. According to the CME’s FedWatch Tool, money markets were recently thrown a curve ball, and bets of a June rate cut from the Fed have eased to 60%, down from 70% at the start of the week. Next week also brings Australia’s latest labor and employment figures on Thursday, and median market forecasts expect Australia’s Employment Change in February to add 30K new jobs, while the Unemployment Rate is forecast to tick down to 4.0% from 4.1%. Preliminary Judo Bank Australian Purchasing Managers Index (PMI) figures for February are also scheduled for early Thursday.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6578 | Negative Crossover | Bearish
  • MA 20 : 0.6566 | Negative Crossover | Bearish
  • MA 50 : 0.6569 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6579 | Negative Crossover | Bearish
  • MA 20 : 0.6557 | Negative Crossover | Bearish
  • MA 50 : 0.6567 | Positive Crossover | Bullish

RSI (Relative Strength Index): 49.2142 | Buy Zone | Bullish

Stochastic   Oscillator : 57.6140 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.6580 R2 : 0.6620
  • S1 : 0.6453 S2 : 0.6413

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 0.6573 | Take Profit: 0.6496 | Stop Loss: 0.6626

USD/JPY

USD/JPY extends upside to 149.00 as focus shifts to BoJ, Fed policy.

USD/JPY jumps to 148.80 on hopes that the BoJ will maintain its ultra-loose monetary policy stance on Tuesday. The BoJ lacks a significant wage-price spiral to back an exit to negative interest rates. Diminished Fed rate cut expectations keep the US Dollar strong near its three-week highs around 103.50. The USD/JPY climbed to 148.80 in the late European session on Friday as the Japanese Yen weakened on expectations that the Bank of Japan (BoJ) will not end the expansionary policy stance in the meeting on Tuesday. Plenty of fundamentals favor the BoJ quitting negative interest rates. BoJ’s favorite inflation measure, the Consumer Price Index (CPI), excl. fresh food has remained above the 2% target for a longer period. Market participants will keenly focus on the BoJ’s press conference about when the central bank will scrap its negative interest rates and Yield Curve Control (YCC). Earlier, BoJ Governor Kazuo Ueda said policymakers will debate whether the outlook is bright enough to phase out the massive monetary stimulus.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 148.5095 | Positive Crossover | Bullish
  • MA 20 : 148.8162 | Negative Crossover | Bearish
  • MA 50 : 148.3465 | Positive Crossover | Bullish

Simple :

  • MA 10 : 148.4596 | Positive Crossover | Bullish
  • MA 20 : 149.3868 | Negative Crossover | Bearish
  • MA 50 : 148.4003 | Positive Crossover | Bullish

RSI (Relative Strength Index): 51.9074 | Buy Zone | Bullish

Stochastic   Oscillator : 41.9821 | Neutral Zone | Positive

Resistance   And Support Levels :

  • R1 : 150.8153 R2 : 151.9920
  • S1 : 147.0060 S2 : 145.8293

Overall Sentiment: Neutral Market Direction : Sell

Trade Suggestion: Limit Sell: 149.35 | Take Profit: 147.20 | Stop Loss: 150.87

Elsewhere In The Forex Market

NZD/USD down 0.74% to 0.6084. The USD/CAD up 0.8% to 1.3544. The USDCHF is down 0.01% at 0.8836. EUR/GBP up 0.17% at 0.8549. The USD/CNY is up 0.03% at 7.1949, AUD/SEK is down 0.01% at 6.7979, and CHF/SGD is up 0.14% at 1.5139 at the time of writing.

Key Economic Events & Data Release Today:

(JPY) BoJ Monetary Policy Statement (Monday) (AUD) RBA Interest Rate Decision (Mar) (Monday) (JPY) BoJ Press Conference (Tuesday) (CAD) Core CPI (MoM) (Feb) (Tuesday) (USD) Building Permits (Feb) (Tuesday) (GBP) CPI (YoY) (Feb) (Wednesday) (EUR) ECB President Lagarde Speaks (Wednesday) (USD) Fed Interest Rate Decision (Wednesday) (USD) FOMC Statement (Wednesday) (USD) FOMC Press Conference (Wednesday) (NZD) GDP (QoQ) (Q4) (Wednesday) (EUR) German Manufacturing PMI (Mar) (Thursday) (CHF) SNB Press Conference (Thursday) (GBP) Service PMI (Thursday) (GBP) BOE Interest Rate Decision (Mar) (Thursday) (USD) Initial Jobless Claims at 08:30 (Thursday)