. Daily FX Analysis- USD/CAD, Index, USD/CHF Surge, EUR/GBP Gains - Currency Market Dynamics

Daily FX Analysis- USD/CAD, Index, USD/CHF Surge, EUR/GBP Gains – Currency Market Dynamics

Daily FX Analysis- USD/CAD, Index, USD/CHF Surge, EUR/GBP Gains – Currency Market Dynamics

04 Oct 2023

Introduction:

In the world of currency markets, the NZD/USD pair faces continued losses, hovering around the 0.5900 mark, following the Reserve Bank of New Zealand’s (RBNZ) decision to maintain the OCR at 5.5%. This decision has triggered a decline in the Kiwi pair as economic indicators paint a bleak picture. With significant support resting at the 0.5850 level, these developments underscore the pressure mounting on the NZD/USD. Meanwhile, other currency pairs like USD/CAD, USD/CHF, and EUR/GBP also reflect the dynamics of central bank decisions and market sentiment.

NZD/USD:

NZD/USD extends losses near 0.5900 after the RBNZ decision.

Following the RBNZ’s decision to maintain the OCR at 5.5%, the NZD/USD declined. Economic data point to a pessimistic outlook for the Kiwi pair.

The support, positioned at the 0.5850 significant level, is the lowest from September.

Because of the US Federal Reserve’s (Fed) interest rate trajectory, NZD/USD has lost ground for a third day. The Reserve Bank of New Zealand (RBNZ) also chose to maintain the Official Cash Rate (OCR) at 5.5%, as was generally anticipated, which puts more pressure on the Kiwi pair.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.5911 | Negative Crossover | Bearish
  • MA 20: 0.5937 Negative Crossover | Bearish
  • MA 50: 0.5939 | Negative Crossover | Bearish

Simple:

  • MA 5: 0.5903 | Negative Crossover | Bearish
  • MA 20: 0.5947 | Negative Crossover | Bearish
  • MA 50: 0.5934 | Negative Crossover | Bearish

RSI (Relative Strength Index): 39.45 | Sell Zone | Bearish

Stochastic Oscillator: 14.06| Sell Zone | Neutral

Resistance And Support Levels:

  • R1: 0.5971 | R2: 0.6042
  • S1: 0.5890 | S2: 0.5805

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 0.5863 | Take Profit: 0.5805 | Stop Loss: 0.5907

USD/CAD:

USD/CAD trades higher near 1.3710 on market caution, weak Oil prices.

The Fed’s aggressive stance on the trajectory of interest rates supports the USD/CAD.A stronger US jobs report boosts US rates, which helps the US Dollar.

The Canadian Dollar is under pressure due to low crude oil prices.

For the fourth day in a row, the USD/CAD currency pair is rising. On Wednesday during the Asian session, it was trading higher near 1.3710. Due to the US Federal Reserve’s (Fed) interest rate trajectory, the pair is seeing upward support amid cautious sentiment.

At the time of writing, the US Dollar Index (DXY) is circling about 107.10, matching the 11-month high reached on Tuesday. Strong US job data and rising US Treasury yields are the main drivers of the US Dollar’s (USD) rise.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.3688| Positive Crossover | Bullish
  • MA 20: 1.3598 | Positive Crossover | Bullish
  • MA 50: 1.3554 | Positive Crossover | Bullish

Simple:

  • MA 5: 1.3704 | Positive Crossover | Bullish
  • MA 20: 1.3569 | Positive Crossover | Bullish
  • MA 50: 1.3526 | Positive Crossover | Bullish

RSI (Relative Strength Index): 71.39| Buy Zone | Bullish

Stochastic Oscillator: 89.41 | Buy Zone | Neutral zone

Resistance And Support Levels:

  • R1: 1.3706| R2: 1.3833
  • S1: 1.3583| S2: 1.3423

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy 1.3751| Take Profit: 1.3833 | Stop Loss: 1.3698

USD/CHF:

USD/CHF holds ground above 0.9200 near seven month high, US data eyed.

Due to the Fed’s hawkish view on interest rate trajectory, the USD/CHF is moving upward. The US dollar gains strength as a result of rising US Treasury yields and positive US jobs data.

The SNB is expected to keep interest rates same at the forthcoming meeting.

The USD/CHF currency pair maintains its position close to the seven-month high reached on Tuesday, rising for a third straight day around 0.9220 in the early European trading hours on Wednesday. Due to the US Federal Reserve’s (Fed) interest rate trajectory, the pair is seeing upward support amid cautious sentiment.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.9198 | Negative Crossover | Bearish
  • MA 20: 0.9159| Positive Crossover | Bullish
  • MA 50: 0.9077 | Positive Crossover | Bullish

Simple:

  • MA 5: 0.9205 | Negative Crossover | Bearish
  • MA 20: 0.9171 | Positive Crossover | Bullish
  • MA 50: 0.9059| Positive Crossover | Bullish

RSI (Relative Strength Index): 63.11 | Buy Zone | Bullish

Stochastic Oscillator: 75.29| Buy Zone| Neutral

Resistance And Support Levels:

  • R1: 0.9212 | R2: 0.9338
  • S1: 0.9123 | S2: 0.9013

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.9244 | Take Profit: 0.9338 | Stop Loss: 0.9170

EUR/GBP:

The USD/JPY remains below 150.00, awaits US employment data.

Gains on the EUR/GBP continue for a second consecutive month. The BoE’s decision to stop the cycle of rate hikes devalues the pound sterling.

Investors watch for remarks by ECB officials throughout the week in search of new clues regarding the ECB’s position.

During Tuesday’s European trading hours, the EUR/GBP rose for a fourth day in a row, trading near 0.8670.

The Bank of England’s (BoE) unanticipated decision to halt its rate-hiking cycle in September is the main factor contributing to the British Pounds (GBP) relative underperformance. The BoE’s decision not to raise interest rates was a break from the pattern seen since December 2021.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.8663 | Negative Crossover | Bearish
  • MA 20: 0.8663| Negative Crossover | Bearish
  • MA 50: 0.8645| Positive Crossover | Bullish

Simple:

  • MA 5: 0.8665 | Negative Crossover | Bearish
  • MA 20: 0.8667| Negative Crossover | Bearish
  • MA 50: 0.8664| Positive Crossover | Bullish

RSI (Relative Strength Index): 47.37| Buy Zone | Bullish

Stochastic Oscillator: 51.2| Buy | Neutral Zone

Resistance And Support Levels:

  • R1: 0.8693 | R2: 0.8730
  • S1: 0.8651 | S2: 0.8607

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 0.8635 | Take Profit: 0.8606 | Stop Loss: 0.8657

Elsewhere in the Forex Market

GBPUSD up 0.06% to 1.2083. The AUD/USD up 0.29% to 0.6319. The EUR/USD up 0.16% at 1.0483. USD/CHF down 0.1% at 0.9199, CAD/JPY down 0.05% at 108.65 The USD/CNY down 0.00% at 7.3015, AUD/SEK up 0.35% at 7.0097, at the time of writing.

Key Economic Events & Data Release Today:

(NZD) RBNZ Interest Rate Decision Actual 5.50%, Forecast 5.50%, Previous 5.50% at 06:30.

(EUR) ECB President Lagarde Speaks at 13:30.

(USD) ADP Nonfarm Employment Change (Sep) Forecast 153K, Previous 177K at 17:45.

(USD) ISM Non-Manufacturing PMI (Sep) Forecast 53.6, Previous 54.5 at 19:30.

(USD) Crude Oil Inventories Forecast –0.446M, Previous –2.170M at 20:00.