. Weekly FX Analysis - Discover Forex Surges, Struggles, and Setbacks.

Weekly FX Analysis – Discover Forex Surges, Struggles, and Setbacks.

Weekly FX Analysis – Discover Forex Surges, Struggles, and Setbacks.

13 Jan 2024

Introduction

In the forex market, GBP/USD strengthens, nearing a weekly high at 1.2780, with a focus on UK GDP and US PPI data. The pair sustains a three-day rally, raising speculation about a potential BOE rate cut amid faster-than-expected inflation decline. Meanwhile, the Euro faces resistance, influenced by dovish ECB sentiments and a sparse eurozone economic calendar. AUD/JPY extends losses as the Aussie weakens against the Yen, while USD/JPY grapples with setbacks triggered by soft PPI and escalating tensions in the Red Sea.

Markets In Focus Today – GBP/USD

GBP/USD gathers strength to a weekly high near 1.2780, with eyes on UK GDP, and US PPI data.

GBP/USD trades strongly for the third consecutive day on Friday. The BOE may be forced to provide the timeline of its first rate cut as inflation might decline faster than expected. The US CPI inflation reports may challenge the plans of the Federal Reserve (Fed) to cut the interest rate this year. The GBP/USD pair gains ground to nearly the weekly high during the early Asian trading hours on Friday. The November UK Gross Domestic Product (GDP) is estimated to grow by 0.2% MoM from the 0.3% contraction in the previous reading. GBP/USD trades near 1.2780, gaining 0.16% daily. Traders will monitor the monthly GDP growth numbers for November and the US Producer Price Index (PPI).

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.27 | Positive Crossover | Bullish
  • MA 20 : 1.27 | Positive Crossover | Bullish
  • MA 50 : 1.26 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.27 | Positive Crossover | Bullish
  • MA 20 : 1.27 | Positive Crossover | Bullish
  • MA 50 : 1.26 | Positive Crossover | Bullish

RSI (Relative Strength Index): 56.97 | Buy Zone | Bullish

Stochastic   Oscillator : 64.67 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.28 R2 : 1.29
  • S1 : 1.26 S2 : 1.25

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 1.2721 | Take Profit: 1.2848 | Stop Loss: 1.2654

EUR/USD

As Eurodollar bids soften on Friday, Euro trims away some of the week’s gains.

Euro struggles to gain momentum on Friday, pares back week’s performance. A slew of ECB talking points this week have bid down rate cut hopes. Next week’s economic calendar is light on eurozone data. The Euro (EUR) is softening on Friday, backsliding against the majority of its major currency peers as dovish talking points from the European Central Bank (ECB) weigh on rate cut hopes. Next week sees limited eurozone data releases, with mid-tier Industrial Production and the final Harmonized Index of Consumer Prices (HICP) due in the first half of the week.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.10 | Negative Crossover | Bearish
  • MA 20 : 1.10 | Negative Crossover | Bearish
  • MA 50 : 1.09 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.10 | Negative Crossover | Bearish
  • MA 20 : 1.10 | Negative Crossover | Bearish
  • MA 50 : 1.09 | Positive Crossover | Bullish

RSI (Relative Strength Index): 50.85 | Buy Zone | Bullish

Stochastic   Oscillator : 33.36 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.11 R2 : 1.12
  • S1 : 1.08 S2 : 1.07

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 1.0939 | Take Profit: 1.1063 | Stop Loss: 1.0870

AUD/USD

AUD/JPY slumps further as Aussie sheds weight on the week.

AUD/JPY extends a decline, testing back below 97.00. Australian Trade Balance climbs after Imports steeply contract. Aussie home lending growth falls back, Chinese CPI contracts further. The AUD/JPY extended declines into a second day on Friday, with the Aussie (AUD) shedding weight against the Japanese Yen (JPY) with broader markets bidding up the Yen with the AUD set to round out the week trading as the single worst performer of the major currency bloc. Next week will see Australian Westpac Consumer Confidence for January which last grew by 2.7%, and Japan Producer Price Index (PPI) figures for December.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.67 | Negative Crossover | Bearish
  • MA 20 : 0.67 | Negative Crossover | Bearish
  • MA 50 : 0.66 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.67 | Negative Crossover | Bearish
  • MA 20 : 0.68 | Negative Crossover | Bearish
  • MA 50 : 0.66 | Positive Crossover | Bullish

RSI (Relative Strength Index): 47.10 | Buy Zone | Bullish

Stochastic   Oscillator : 21.39 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.69 R2 : 0.69
  • S1 : 0.66 S2 : 0.65

Overall Sentiment: Neutral Market Direction: Buy

Trade Suggestion: Limit Buy: 0.6674 | Take Profit: 0.6788 | Stop Loss: 0.6606

USD/JPY

USD/JPY grapples with losses following soft PPI, Red Sea tensions.

The USD/JPY is gravitating towards the 144.70 level with notable losses. Soft PPI data for December weakened the US Dollar. Red Sea tensions may limit the downside for the pair. In Friday’s trading session, USD/JPY encountered a setback, trading around 144.70 with losses of 0.40%. This downward movement is driven by the soft Producer Price Index (PPI), but escalating tensions in the Red Sea region may drive demand back to the US Dollar. Additionally, as tensions rise in the Red Sea between the US and Houthis rebels, markets fear potential escalation. They may seek refuge in the Greenback, which could eventually push the pair upwards.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 144.28 | Positive Crossover | Bullish
  • MA 20 : 144.06 | Positive Crossover | Bullish
  • MA 50 : 145.23 | Negative Crossover | Bearish

Simple :

  • MA 10 : 144.00 | Positive Crossover | Bullish
  • MA 20 : 143.18 | Positive Crossover | Bullish
  • MA 50 : 146.08 | Negative Crossover | Bearish

RSI (Relative Strength Index): 53.44 | Buy Zone | Bullish

Stochastic   Oscillator : 84.26 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 146.29 R2 : 148.19
  • S1 : 140.10 S2 : 138.19

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 144.74 | Take Profit: 148.39 | Stop Loss: 142.88

Elsewhere In The Forex Market

NZD/USD up 0.09% to 0.6238. The USD/CAD is up 0.01% to 1.3408. The USDCHF is up 0.04% at 0.8522. EUR/GBP down 0.17% at 0.8583. The USD/CNY is up 0.01% at 7.1677, AUD/SEK is up 0.17% at 6.8723, and CHF/SGD is down 0.01% at 1.5619 at the time of writing.

Key Economic Events & Data Release Today:

(EUR) Industrial Production (MoM) (Nov) (Monday) (CAD) Manufacturing Sales (Monday) (EUR) German CPI (MoM) (Dec) (Tuesday) (CAD) Core CPI (MoM) (Dec) (Tuesday) (CNY) Industrial Production (YoY) (Dec) (Wednesday) (CNY) GDP (QoQ) (Q4) (Wednesday) (GBP) CPI (YoY) (Dec) (Wednesday) (EUR) CPI (YoY) (Dec) (Wednesday) (USD) Retail Sales (MoM) (Dec) (Wednesday) (USD) Core Retail Sales (MoM) (Dec) (AUD) Employment Change (Dec) (Thursday)