. Daily FX Analysis - Yen Holds, USD Pressured, AUD Consolidates.

Daily FX Analysis – Yen Holds, USD Pressured, AUD Consolidates.

Daily FX Analysis – Yen Holds, USD Pressured, AUD Consolidates.

18 Dec 2023

Introduction

We explore key developments in major currency pairs and commodities in today’s market focus. The Japanese yen holds its ground as traders eagerly await the Bank of Japan’s decision amid speculation about changes to its monetary policy. The U.S. dollar, facing downward pressure, sets the stage for potential interest rate cuts following signals from the Federal Reserve. Additionally, we analyze the consolidation in the AUD/USD pair after a recent rally and the USD/CHF pair’s decline as the Swiss National Bank maintains interest rates. Stay tuned for insights into the EUR/JPY dynamics and overall market sentiment.

Markets In Focus Today – USD/JPY

USD/JPY Dynamics: Yen Holds Steady Ahead of BOJ Decision

The Japanese yen demonstrated resilience on Monday as the Bank of Japan (BOJ) initiated its two-day monetary policy meeting, prompting anticipation among traders for potential shifts in the central bank’s dovish stance. In contrast, the U.S. dollar continued its decline, extending losses from the prior week following indications of potential interest rate cuts by the Federal Reserve. The USD/JPY pair stabilized at 142.25, having experienced a nearly 2% gain for the yen in the previous week amid the dollar’s retreat. The uncertainty surrounding the BOJ’s plans to phase out its negative interest rate policy has influenced market volatility in the Japanese currency. Recent comments from BOJ Governor Kazuo Ueda initially led to a significant yen rally

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 144.13 | Negative Crossover | Bearish
  • MA 20 : 145.73 | Negative Crossover | Bearish
  • MA 50 : 147.29 | Negative Crossover | Bearish

Simple :

  • MA 10 : 144.42 | Negative Crossover | Bearish
  • MA 20 : 146.33 | Negative Crossover | Bearish
  • MA 50 : 148.59 | Negative Crossover | Bearish

RSI (Relative Strength Index): 31.44 | Neutral Zone | Neutral

Stochastic   Oscillator : 14.66 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 150.92 R2 : 152.15
  • S1 : 141.10 S2 : 138.60

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Buy: 141.10 | Take Profit: 138.60 | Stop Loss: 142.50

AUD/USD

AUD/USD Consolidates Near Five-Month Highs Amidst Resistance

The Australian and New Zealand dollars took a breather on Monday, halting a recent rally that propelled them to nearly five-month highs. Specifically, the AUD/USD pair hovered at $0.6695, encountering formidable resistance at its 4.5-month peak of $0.6728. This level, which proved challenging to breach in the past two sessions, is significant. Despite a robust 7% surge from its October 2023 low of $0.6271, the Australian dollar faces resistance, prompting consolidation considerations as the year draws to a close. The sentiment has been influenced by hesitations over imminent rate cuts, reflecting the cautious stance of certain Federal Reserve officials.

Technical   Overview With Chart :

Moving Averages :

Exponential :

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

Simple :

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

RSI (Relative Strength Index): 66.66 | Neutral Zone | Neutral

Stochastic   Oscillator : 89.20 | Neutral Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 0.67279 | Take Profit: 0.67878 | Stop Loss: 0.66919

USD/CHF

USD Falls 0.63% Against CHF as Swiss National Bank Holds Steady

In a noteworthy development, the U.S. dollar (USD) witnessed a decline of 0.63% against the Swiss franc (CHF), marking its lowest level since July 27. This significant drop followed the Swiss National Bank’s (SNB) decision to maintain interest rates at 1.75%, aligning with market expectations. The SNB, in its policy announcement, also acknowledged a slight decrease in inflationary pressure over the past quarter. This recognition of moderating inflationary concerns contributed to the weakening of the USD/CHF pair. Investors are closely monitoring central bank decisions and economic indicators for insights into the evolving dynamics of these currency movements.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.87 | Negative Crossover | Bearish
  • MA 20 : 0.88 | Negative Crossover | Bearish
  • MA 50 : 0.88 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.87 | Negative Crossover | Bearish
  • MA 20 : 0.88 | Negative Crossover | Bearish
  • MA 50 : 0.89 | Negative Crossover | Bearish

RSI (Relative Strength Index): 34.14 | Neutral Zone | Neutral

Stochastic   Oscillator : 30.29 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.90 R2 : 0.91
  • S1 : 0.86 S2 : 0.85

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Buy: 0.86697 | Take Profit: 0.85720 | Stop Loss: 0.87450

EUR/JPY

EUR/JPY Dynamics: Yen Edges Lower Against Euro

On Monday, the Japanese yen (JPY) experienced a marginal decline of over 0.2% against the euro (EUR), settling at 155.27. This slight dip followed a period of strength, with the yen not far from a four-month high of 153.215 per euro reached earlier this month. In the broader context, the yen has been resilient, particularly against the U.S. dollar, as traders closely monitor the Bank of Japan’s (BOJ) two-day monetary policy meeting for insights into potential shifts in the central bank’s ultra-loose policy settings. The EUR/JPY pair reflects the delicate balance in the forex market, with investors awaiting further developments in the currency dynamics.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 156.71 | Negative Crossover | Bearish
  • MA 20 : 158.13 | Negative Crossover | Bearish
  • MA 50 : 158.99 | Negative Crossover | Bearish

Simple :

  • MA 10 : 156.49 | Negative Crossover | Bearish
  • MA 20 : 159.15 | Negative Crossover | Bearish
  • MA 50 : 159.65 | Negative Crossover | Bearish

RSI (Relative Strength Index): 35.00 | Neutral Zone | Neutral

Stochastic   Oscillator : 23.31 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 163.57 R2 : 164.81
  • S1 : 159.57 S2 : 158.34

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Buy: 153.96 | Take Profit: 151.494 | Stop Loss: 154.875

Elsewhere In The Forex Market

EUR/USD 1.0917 (+0.0023, +0.21%) AUD/USD 0.6726 (+0.003, +0.45%) USD/CAD 1.337 (-0.0011, -0.08%) EUR/JPY 155.46 (+0.55, +0.36%) USD/JPY 142.41 (+0.26, +0.18%) GBP/USD 1.2685 (+0.001, +0.08%) GBP/JPY 180.63 (+0.30, +0.17%)

Key Economic Events & Data Release Today:

4:00PM(IST)-GBP-MPC Member Broadbent Speaks 8:30PM(IST)-USD-NAHB Housing Market Index