Introduction:

In the world of forex trading, the GBP/USD pair is grappling with the prospect of its lowest weekly close since March. The Bank of England’s decision to maintain interest rates has left the pound struggling, reflecting one of the week’s poorest performances. Meanwhile, the EUR/USD pair is hovering around 1.0650, with a slight recovery but still lower than a week ago. On the other hand, the AUD/USD is making tentative moves towards 0.6450, buoyed by declining US bond yields. Lastly, USD/JPY is experiencing a rebound after the Bank of Japan’s decision to keep interest rates steady, with an eye on reaching 148.50. These currency pairs are navigating a complex economic landscape, influenced by central bank decisions and economic data.

GBP/USD:

GBP/USD heads for lowest weekly close since March.

Weekly losses are keeping GBP/USD steady, and it is unable to budge from 1.2200. Following the Bank of England’s decision to maintain the same interest rates, the pound has had one of the worst performances of the week.

GBP/USD extended its decline to the 1.2250 region early on Friday after closing Thursday’s trading session in the red for the second straight day. The pair’s short-term technical picture shows oversold conditions, although a strong rebound may be difficult to achieve.

The BoE is expected to hold off on tightening policy further due to the deteriorating UK economic outlook. Therefore, the expanding policy gap between the Federal Reserve and the BoE may keep the GBP/USD pair in a downward trend.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 1.2315 | Negative Crossover | Bearish
• MA 20: 1.2461 | Negative Crossover | Bearish
• MA 50: 1.2578 | Negative Crossover | Bearish

Simple:

• MA 5: 1.2328 | Negative Crossover | Bearish
• MA 20: 2.2488 | Negative Crossover | Bearish
• MA 50: 1.2663 | Negative Crossover | Bearish

RSI (Relative Strength Index): 23.28 | Selling Zone | Bearish

Stochastic Oscillator: 0.0 | Selling Zone | Negative

Resistance And Support Levels: 

• R1: 1.2402 | R2: 1.2625
• S1: 1.2197 | S2: 1.1931

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.2104 | Take Profit: 1.1931 | Stop Loss: 1.2235

EUR/USD:

Around 1.0650, the EUR/USD consolidated a slight recovery.

The EUR/USD currency pair is expected to close the week around 1.0650, which is a little lower than where it was a week ago. The pair hit its intraday low on Friday at 1.0614, the lowest point since March. Due to lower Treasury yields, the US dollar lost momentum late on Friday.

On Thursday, the EUR/USD nearly maintained its day’s performance below 1.0700 before entering a consolidation period around or near 1.0650 early on Friday.

Investors will also pay close attention to how people perceive risk. Wall Street’s major indexes appear to open in positive territory on Friday after a steep two-day fall, with US stock index futures climbing between 0.1% and 0.3%. The EUR/USD could move higher if risk flows dominate the trading in the financial markets during the American session.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 1.0662 | Negative Crossover | Bearish
• MA 20: 1.0733 | Negative Crossover | Bearish
• MA 50: 1.0818 | Negative Crossover | Bearish

Simple:

• MA 5: 1.0666 | Negative Crossover | Bearish
• MA 20: 1.0737 | Negative Crossover | Bearish
• MA 50: 1.0884 | Negative Crossover | Bearish

RSI (Relative Strength Index): 34.44| Selling Zone | Bearish

Stochastic Oscillator: 39.94 | Selling Zone | Negative

Resistance And Support Levels: 

• R1: 1.0745 | R2: 1.0866
• S1: 1.0635 | S2: 1.0514

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.0595 | Take Profit: 1.0514 | Stop Loss: 1.0657

AUD/USD:

AUD/USD treads waters to reach 0.6450, Greenback trims intraday gains.

AUD/USD tries to go close to 0.6450 because of the US dollar’s decline. The US Dollar’s (USD) advances are constrained by the decline in US bond yields. In September, Australia’s private sector resumed expanding, giving the Australian couple a little boost.

The rising potential of the dollar may have been constrained by the decline in US Treasury yields. The 10-year US bond’s yield is at 4.46%. At the time of writing, the US Dollar Index (DXY), which gauges the performance of the dollar versus six other significant currencies, is trading at about 105.60.

The Australian Services PMI also rose from 47.8 in August to 50.5 in September, marking a four-month high. The Manufacturing PMI, however, fell from 49.6 in the previous month to 48.2, remaining in the contraction zone. The Australian Dollar (AUD) has seen positive sentiment moderated as a result of the manufacturing sector decline, inhibiting strong optimistic bets on the currency.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 0.6434| positive Crossover | Bullish
• MA 20: 0.6439 | positive Crossover | Bullish
• MA 50: 0.6555 | Negative Crossover | Bearish

Simple:

• MA 5: 0.6438 | positive Crossover | Bullish
• MA 20: 0.6433 | positive Crossover | Bullish
• MA 50: 0.6522 | Negative Crossover | Bearish

RSI (Relative Strength Index): 47.83| Buy Zone | Bullish

Stochastic Oscillator: 80.03 | Buy Zone | Negative

Resistance And Support Levels: 

• R1: 0.6457 | R2: 0.6605
• S1: 0.6354 | S2: 0.6230

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.6506 | Take Profit: 0.6605 | Stop Loss: 0.6444

USD/JPY:

On the BoJ’s decision to maintain the same interest rates, USD/JPY is expected to reach 148.50.

Due to the BoJ’s decision to keep interest rates unchanged, USD/JPY has recovered some of its recent losses. When the 2% inflation objective is within sight, the BoJ may think about changing its ultra-loose monetary policy. Investors eagerly anticipate US data to learn important details about the nation’s economic situation.

Friday saw the post-September policy meeting news conference, which was led by BOJ Governor Kazuo Ueda. The BoJ Governor has stated that when they anticipate reaching 2% inflation, the BOJ may think about discontinuing yield curve management and changing its negative interest rate policy.

The preliminary US S&P Global PMIs for September are among the economic data releases that market participants are watching for. These numbers may offer insightful information on the state of the US economy and help traders spot potential opportunities to trade the US Dollar (USD).

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 147.95 | Positive Crossover | Bullish
• MA 20: 147.10 | Positive Crossover | Bullish
• MA 50: 145.23 | Positive Crossover | Bullish

Simple:

• MA 5: 147.93 | Positive Crossover | Bullish
• MA 20: 147.15 | Positive Crossover | Bullish
• MA 50: 144.70 | Positive Crossover | Bullish

RSI (Relative Strength Index): 62.16 | Buying Zone | Bullish

Stochastic Oscillator: 53.67| Buy Zone | Neutral

Resistance And Support Levels: 

• R1: 148.40 | R2: 151.59
• S1: 146.50 | S2: 144.69

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 149.43| Take Profit: 151.59 | Stop Loss: 147.97

Elsewhere in the Forex Market

NZD/USD up 0.49% to 0.5959. The EUR/JPY up 0.37% to 157.89. The USDCHF is up 0.26% at 0.9068. USD/CAD up 0.10% at 1.3483, EUR/GBP up 0.27% at 0.8691. The USD/CNY is down 0.11% at 7.2985, AUD/SEK is down 0.29% at 7.1474, and CHF/SGD is down 0.27% at 1.1025 at the time of writing.

Key Economic Events & Data Release for Upcoming Week:

(USD) Building Permits (Tuesday).

(USD) CB Confidence Confidence (Sep) (Tuesday).

(USD) Crude Oil Inventories (Wednesday).

(AUD) Retail Sales (MoM) (Aug) (Thursday).

(USD) GDP (QoQ) (Q2) (Thursday).

(USD) Initial Jobless Claims (Thursday).