. Daily FX Analysis - USD weak, SNB pressure, NZD dip.

Daily FX Analysis – USD weak, SNB pressure, NZD dip.

Daily FX Analysis – USD weak, SNB pressure, NZD dip.

21 Mar 2024

Introduction

EUR/USD maintains strength above 1.0900 ahead of Eurozone PMI data, buoyed by lingering weakness in the US Dollar post-Fed’s dovish stance. Meanwhile, GBP/USD hovers near 1.2800 amid anticipation of UK PMI data and BoE announcements. USD/CHF weakens before the SNB meeting, signaling potential dovish policy adjustments. Additionally, NZD/USD trades below 0.6100 following disappointing New Zealand GDP data, despite the Fed’s unchanged interest rates.

Markets In Focus Today – EUR/USD

EUR/USD trades firm above 1.0900 ahead of Eurozone PMI data.

EUR/USD is well bid above 1.0900 in the European morning on Thursday. The pair is consolidating the upside, fuelled by sustained US Dollar weakness in the aftermath of a dovish Fed policy decision. The focus shifts to the Eurozone and the US PMI data for fresh directives. The recent upward momentum in the Greenback suddenly halted on Wednesday, sparking instead a meaningful correction to the 103.40 region when tracked by the USD Index (DXY) in response to the bearish message from Chief Powell at his press conference after the Federal Reserve left its interest rates intact on Wednesday. The pair’s recovery, in the meantime, came on the back of further weakness in US yields in the short end and the belly of the curve, while 10-year bund yields added to Tuesday’s losses near 2.40%.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0901 | Positive Crossover | Bullish
  • MA 20 : 1.0883 | Positive Crossover | Bullish
  • MA 50 : 1.0864 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0910 | Positive Crossover | Bullish
  • MA 20 : 1.0883 | Positive Crossover | Bullish
  • MA 50 : 1.0847 | Positive Crossover | Bullish

RSI (Relative Strength Index): 60.2423 | Buy Zone | Bullish

Stochastic   Oscillator : 57.4783 | Buy Zone | Positive

Resistance   And Support Levels :

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

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 1.0894 | Take Profit: 1.0980 | Stop Loss: 1.0843

GBP/USD

GBP/USD keeps its range near 1.2800, as UK PMIs and BoE decisions loom.

GBP/USD is trading close to 1.2800, holding positive momentum in early Europe on Thursday. A broadly weaker US Dollar, following the Fed policy decision, provides some support to the pair ahead of the key UK PMI data and the BoE policy announcements. GBP/USD trades in negative territory near 1.2700 in the European session on Wednesday as markets assess inflation data from the UK. The near-term technical outlook points to a buildup of bearish momentum as market focus shifts to the Federal Reserve’s (Fed) policy announcements. Later in the day, the Fed is set to hold the policy rate unchanged at 5.25%-5.5%. The revised Summary of Economic Projections (SEP), also known as the dot plot, could provide important clues regarding the timing of the policy pivot and the rate outlook.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2759 | Positive Crossover | Bullish
  • MA 20 : 1.2736 | Positive Crossover | Bullish
  • MA 50 : 1.2692 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2777 | Positive Crossover | Bullish
  • MA 20 : 1.2734 | Positive Crossover | Bullish
  • MA 50 : 1.2686 | Positive Crossover | Bullish

RSI (Relative Strength Index): 58.9754 | Buy Zone | Bullish

Stochastic   Oscillator : 53.2731 | Buy Zone | Positive

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: 1.2751 | Take Profit: 1.2863 | Stop Loss: 1.2685

USD/CHF

Swiss Franc sells off ahead of SNB meeting.

Swiss Franc is weakening ahead of the key Swiss National Bank policy meeting on Thursday. Lower inflation and growth point to the risk of a dovish policy tweak at the meeting. USD/CHF is piercing above the top of a box range and threatening to break out substantially higher. The Swiss Franc (CHF) is trending lower on Wednesday in its most heavily traded pairs ahead of the week’s key event for the currency, the Swiss National Bank (SNB) policy meeting on Thursday. The decline may be due to traders seeing a heightened risk the SNB will change its messaging or even reduce interest rates at the meeting due to substantial declines in both inflation and growth over the last year.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.8838 | Negative Crossover | Bearish
  • MA 20 : 0.8817 | Positive Crossover | Bullish
  • MA 50 : 0.8771 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.8823 | Negative Crossover | Bearish
  • MA 20 : 0.8818 | Positive Crossover | Bullish
  • MA 50 : 0.8747 | Positive Crossover | Bullish

RSI (Relative Strength Index): 59.5464 | Buy Zone | Bullish

Stochastic   Oscillator : 10.35 | Sell Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.8888 R2 : 0.8966
  • S1 : 0.8634 S2 : 0.8556

Overall Sentiment: Neutral Market Direction: Buy

Trade Suggestion: Limit Buy: 0.8904 | Take Profit: 0.9026 | Stop Loss: 0.8839

NZD/USD

NZD/USD trades strongly below 0.6100 following New Zealand GDP data.

NZD/USD gains ground around 0.6090 on the weaker USD. New Zealand’s GDP for Q4 came in at -0.1% QoQ vs. -0.3% prior, weaker than expected. The Fed held interest rates steady at its March meeting on Wednesday, as widely expected. The NZD/USD pair traded on a stronger note below the 0.6100 mark during the early Asian session on Thursday. The decline of the US Dollar (USD) after the Federal Reserve (Fed) left its interest rates unchanged and Fed Chair Jerome Powell delivered a dovish message to provide some support to the pair. NZD/USD currently trades around 0.6090, gaining 0.15% on the day. The latest data from Statistics New Zealand on Thursday showed that the nation’s GDP growth number contracted 0.1% QoQ in the fourth quarter from the previous reading of 0.3% contraction. The Annualized GDP for Q4 shrank 0.3% YoY from the 0.6% contraction in the previous reading. Both figures came in worse than market expectations, which might cap the upside of the New Zealand Dollar (NZD).

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6102 | Positive Crossover | Bullish
  • MA 20 : 0.6115 | Negative Crossover | Bearish
  • MA 50 : 0.6126 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6117 | Negative Crossover | Bearish
  • MA 20 : 0.6123 | Negative Crossover | Bearish
  • MA 50 : 0.6122 | Negative Crossover | Bearish

RSI (Relative Strength Index): 47.5954 | Buy Zone | Bullish

Stochastic   Oscillator : 24.0259 | Sell Zone | Positive

Resistance   And Support Levels :

  • R1 : 0.6182 R2 : 0.6224
  • S1 : 0.6044 S2 : 0.6002

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Stop Sell: 0.6080 | Take Profit: 0.5998 | Stop Loss: 0.6144

Elsewhere In The Forex Market

AUD/USD up 0.7% to 0.6632, The USD/CAD down 0.22% to 0.6103. The EUR/GBP up 0.08% at 0.8549. USD/JPY down 0.17% at 150.99. AUD/NZD is up 0.39% at 1.0864, The USD/CNY is up 0.00% at 7.1993, and the AUD/SEK is up 0.39% at 6.8675, at the time of writing.

Key Economic Events & Data Release Today:

(CHF) SNB Interest Rate Decision (Q1) Forecast 1.75%, Previous 1.75% at 04:30. (EUR) German Manufacturing PMI (Mar) Forecast 43.1, Previous 42.5 at 04:30. (CHF) SNB Press Conference at 04:30. (GBP) Manufacturing PMI Forecast 47.9, Previous 47.5 at 05:30. (GBP) BoE Interest Rate Decision (Mar) Forecast 5.25%, Previous 5.25% at 08:00. (USD) Initial Jobless Claims Forecast 212K, Previous 209K at 08:30. (USD) Manufacturing PMI (Mar) Forecast 51.8, Previous 52.2 at 09:45. (USD) Existing Home Sales (Feb) Forecast 3.95M, Previous 4.00M at 10:00.