. Daily FX Analysis - Ruble, Dollar, Antipodean, and Franc Drama.

Daily FX Analysis – Ruble, Dollar, Antipodean, and Franc Drama.

Daily FX Analysis – Ruble, Dollar, Antipodean, and Franc Drama.

11 Dec 2023

Introduction

Welcome to a comprehensive overview of the latest developments in global financial markets. In this concise summary, we’ll explore key events and movements that have shaped the currency landscape, focusing on major currencies like the Russian ruble, US dollar, and Swiss franc. From central bank decisions to economic data releases, this snapshot aims to provide valuable insights into the dynamic world of foreign exchange. Stay informed as we delve into the factors influencing market sentiment and impacting currency values across the globe.

Markets In Focus Today – EUR/USD

“Russian Ruble Shows Resilience: Strengthens Towards 91 Against the Dollar”

The Russian ruble showed strength on Monday, nearing the 91 mark against the dollar. This resilience is supported by currency controls and elevated interest rates, setting the stage for Russia’s upcoming year-end rate decision. The central bank is widely expected to implement another interest rate hike of 100 basis points to reach 16% during its meeting on December 15. The market is closely monitoring President Vladimir Putin’s speech on Thursday, especially in light of his recent announcement of running for reelection next year. Despite facing numerous economic challenges, limited success from the West in imposing an oil price cap is currently alleviating pressure. As of 07:28 GMT, the ruble had strengthened by 0.4% against the dollar at 91.51 and remained unchanged at 98.64 versus the euro. Additionally, it had firmed 0.5% against the yuan, reaching 12.72. Alor Broker’s Alexei Antonov noted, “The ruble is a bit surprising as it is not showing December’s traditional weakness,” attributing the unexpected strength to a significantly improved technical picture. After weakening for two consecutive weeks post the month-end tax period, the ruble had previously witnessed seven weeks of gains, rebounding from over 100 against the dollar. This turnaround was attributed to reduced capital outflows following Putin’s introduction of forced conversion of some foreign currency revenue by exporters in October.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.08 | Negative Crossover | Bearish
  • MA 20 : 1.08 | Negative Crossover | Bearish
  • MA 50 : 1.08 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.08 | Negative Crossover | Bearish
  • MA 20 : 1.09 | Negative Crossover | Bearish
  • MA 50 : 1.07 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 45.20 | Neutral Zone | Neutral

Stochastic   Oscillator : 13.27 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.10 R2 : 1.11
  • S1 : 1.07 S2 : 1.05

Trade Suggestion : Limit Buy : 1.07266 | Take Profit : 1.05265 | Stop Loss : 1.0800

USD/JPY

“Dollar Strengthens Ahead of Key U.S. Economic Data and Federal Reserve Meeting; Yuan Faces Pressure”

“The dollar commenced Monday on a positive note, as attention turns to U.S. inflation data and the Federal Reserve’s concluding policy meeting of the year, setting the tone for the week. Meanwhile, the yuan experiences downward pressure due to rising deflationary concerns in China. The greenback reclaimed ground against the yen, reaching 145.62 yen, amid speculation that the Bank of Japan’s prolonged low-interest-rate policy might be approaching its conclusion.”

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 146.63 | Negative Crossover | Bearish
  • MA 20 : 147.64 | Negative Crossover | Bearish
  • MA 50 : 148.27 | Negative Crossover | Bearish

Simple :

  • MA 10 : 146.64 | Negative Crossover | Bearish
  • MA 20 : 148.11 | Negative Crossover | Bearish
  • MA 50 : 149.18 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 40.74 | Neutral Zone | Neutral

Stochastic   Oscillator : 41.81 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 150.92 R2 : 152.15
  • S1 : 146.92 S2 : 145.68

Trade Suggestion : Limit Buy : 146.92 | Take Profit : 143.68 | Stop Loss : 147.90

AUD/USD

Australia and New Zealand dollars decline alongside yuan before central bank events

Australian and New Zealand Dollars Slide Alongside Yuan Ahead of Central Bank Meetings The Australian and New Zealand dollars declined on Monday, influenced by yuan weakness amid growing deflationary pressure in China. Traders are anticipating a week filled with central bank meetings, contributing to expectations of interest rate cuts. The Aussie slipped 0.3% to $0.6556 (AUDUSD), having experienced a 1.5% drop last week, marking its first decline in four weeks. It eased 0.4% on Friday as an upbeat U.S. payrolls report tempered expectations for a March cut by the Federal Reserve, bolstering the U.S. dollar. Resistance is now at $0.6620, while support is at $0.6526. The kiwi was down 0.1% at $0.6113 (NZDUSD) after a weekly drop of 1.4%, breaking a three-week winning streak. It fell 0.8% on Friday, with support at $0.6104. Both Antipodeans, often viewed as liquid proxies for China’s currency, followed the yuan lower (USDCNY) after weekend data revealed a 0.5% decline in consumer prices in China for November, indicating ongoing sluggish domestic demand despite recent hopes of economic stabilization. Looking ahead, the Australian and New Zealand currencies face significant tests this week, including U.S. inflation data on Tuesday, a Federal Reserve meeting on Wednesday, and Australian labor market data on Thursday. Markets are already pricing in a Fed easing of more than 100 basis points next year. The European Central Bank, Bank of England, Norges Bank, and the Swiss National Bank also have meetings scheduled for Thursday. “The Aussie benefited from the broad USD slide in November but has pulled back sharply from potentially extending gains into 0.67-0.68,” said Westpac strategist Tim Riddell. “Aussie may now be constrained by the cool investor response to China’s fiscal stimulus measures and ongoing concern over property sector stress, notwithstanding the strength of iron ore prices.” Australian yields mirrored movements in U.S. Treasuries on Friday, with the three-year Australian government bond yield (AU3YT=RR) rising 4 basis points to 3.956%, while the 10-year (AU10Y) was 2 bps higher at 4.334%. New Zealand is set to report third-quarter economic growth on Thursday, with analysts expecting gross domestic output to have expanded by a tepid 0.2% from the previous quarter’s 0.9%. The Reserve Bank of New Zealand has indicated that resilience in demand could lead to another rate hike.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.66 | Negative Crossover | Bearish
  • MA 20 : 0.66 | Positive Crossover | Bullish
  • MA 50 : 0.65 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.66 | Negative Crossover | Bearish
  • MA 20 : 0.66 | Negative Crossover | Bearish
  • MA 50 : 0.64 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 52.71 | Neutral Zone | Neutral

Stochastic   Oscillator : 35.59 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.67 R2 : 0.68
  • S1 : 0.64 S2 : 0.63

Overall Sentiment : Neutral Market Direction : Sell

Trade Suggestion : Limit Buy : 0.64 | Take Profit : 0.62 | Stop Loss : 0.65

USD/CHF

“Swiss Franc Sees Depreciation After Reaching a 4-Month High”

The Swiss Franc Weakens Against USD, Retreats from Four-Month High The Swiss franc depreciated towards 0.88 per USD, moving away from the four-month high of 0.87 recorded on December 1st. This decline was prompted by soft economic data that accentuated the divergence in policy outlooks between the Swiss National Bank (SNB) and the Federal Reserve. Strong labor data in the United States challenged expectations of imminent rate cuts by the Fed in the first quarter, contributing to the strength of the US dollar. Simultaneously, Switzerland witnessed an increase in the unemployment rate to a nine-month high, with leading indicators signaling a deceleration in the country’s economy. Reinforcing the dovish stance for the SNB, headline inflation in Switzerland dropped to a two-year low of 1.4% in November, falling short of the market’s anticipated 1.7%. The core inflation rate remained below the 2% target for the seventh consecutive month. Despite these economic indicators, the franc is expected to finish 2023 higher against the dollar and the euro. This is primarily attributed to the depletion of forex reserves by the SNB, with foreign currency reserves at the central bank reaching a six-year low in November.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.88 | Positive Crossover | Bullish
  • MA 20 : 0.88 | Negative Crossover | Bearish
  • MA 50 : 0.89 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.88 | Positive Crossover | Bullish
  • MA 20 : 0.88 | Negative Crossover | Bearish
  • MA 50 : 0.89 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 42.47 | Neutral Zone | Neutral

Stochastic   Oscillator : 53.57 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.90 R2 : 0.91
  • S1 : 0.87 S2 : 0.86

Trade Suggestion : Limit Buy : 0.87 | Take Profit : 0.85 | Stop Loss : 0.885

Elsewhere In The Forex Market

Reserve Bank of India Intervenes to Stem Rupee Decline The Reserve Bank of India (RBI) is believed to have sold U.S. dollars on Monday in an effort to mitigate losses in the rupee. The Indian currency opened trading near its all-time low, maintaining the level from the previous day’s close at 83.3850 against the U.S. dollar. The rupee had previously reached a historic low of 83.42 on November 10. While several Asian currencies experienced declines on Monday, market participants anticipate that the RBI will continue its efforts to stabilize the rupee around these levels. A foreign exchange trader at a private bank noted that the RBI is likely to persist in “protecting” the rupee near its current levels.

Key Economic Events & Data Release Today:

11:31PM(IST)-USD-10-y Bond Auction