Introduction:

In the world of forex trading, the GBP/USD, EUR/USD, AUD/USD, and USD/JPY pairs are under the spotlight. GBP/USD faces downward pressure following the Bank of England’s decision, EUR/USD fluctuates amid market sentiment, AUD/USD gains momentum on upbeat data, and USD/JPY remains resilient despite concerns over intervention by the Bank of Japan. Let’s delve into these developments.

GBP/USD:

GBP/USD turns negative Below 1.2200.

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.

In the American session on Friday, GBP/USD reversed course and fell under 1.2200 after climbing above 1.2270 earlier in the day. On the final trading day of the quarter, profit-taking and position reversals appear to be weighing on the pound sterling.

On Tuesday, the GBP/USD pair crossed below 1.2200 and continued to decline, reaching a new six-month low below 1.2150. The pair is still oversold, according to the short-term technical outlook. However, before setting themselves for a definite recovery in the pair, investors may decide to wait for a consistent improvement in risk sentiment.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 1.2202 | Negative Crossover | Bearish
• MA 20: 1.2351 | Negative Crossover | Bearish
• MA 50: 1.2506 | Negative Crossover | Bearish

Simple:

• MA 5: 1.2188 | Positive Crossover | Bullish
• MA 20: 2.2372 | Negative Crossover | Bearish
• MA 50: 1.2586 | Negative Crossover | Bearish

RSI (Relative Strength Index): 29.06 | Selling Zone | Bearish

Stochastic Oscillator: 35.46 | Selling Zone | Positive

Resistance And Support Levels: 

• R1: 1.2318 | R2: 1.2462
• S1: 1.2188 | S2: 1.2000

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.2121 | Take Profit: 1.2000 | Stop Loss: 1.2207

EUR/USD:

EUR/USD loses traction, and retreats below 1.0600.

In the American session on Friday, EUR/USD lost its upward momentum and fell under 1.0600, wiping out some of its daily gains in the process. However, the risk-positive market environment following the PCE inflation report aids the pair in containing its losses.

The EUR/USD had a significant increase on Thursday, rising from monthly lows and moving toward the 1.0600 mark. The US Dollar experienced a correction during this move, pausing after a protracted run of rises.

Members of the European Central Bank (ECB) have not made many statements recently that have affected the value of the Euro. Market sentiment currently favors no rate hike in October and slim chances of one in December. There is currently a widespread belief that the ECB has peaked. Data are still important, though, and the central bank received some good news on Thursday that supported the Euro.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 1.0573 | Negative Crossover | Bearish
• MA 20: 1.0663 | Negative Crossover | Bearish
• MA 50: 1.0822 | 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): 35.41| Selling Zone | Bearish

Stochastic Oscillator: 42.36 | Neutral Zone | Negative

Resistance And Support Levels: 

• R1: 1.0655 | R2: 1.0831
• S1: 1.0507 | S2: 1.0293

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.0428 | Take Profit: 1.0294 | Stop Loss: 1.0525

AUD/USD:

AUD/USD extends gains after upbeat Prive Sector Credit.

On Friday, the Australian Dollar (AUD) extended its advances for the second straight day. The US Dollar (USD) has corrected as a result of a decline in US Treasury yields, helping the AUD/USD pair regain some of its recent losses.

The AUD/USD currency pair had a significant increase on Thursday, recovering from monthly lows and moving above 0.6400. The US Dollar’s decline was the main factor behind the movement. The speech of Federal Reserve (Fed) Chair Powell and the publication of the US Core Personal Consumption Expenditure (PCE) Price Index are the two main topics of interest for market participants.

The Australian Retail Sales figures for August showed an increase of 0.2%, which was somewhat less than the 0.3% market expected. August saw the lowest annual rate since August 2021, slowing from 2.1% in July to 1.5% in August. At the next Reserve Bank of Australia (RBA) Governor Bullock’s first meeting next week, the market does not anticipate a rate increase. Additionally, Australia is scheduled to announce Private Credit data on Friday.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 0.6415| positive Crossover | Bullish
• MA 20: 0.6426 | positive Crossover | Bullish
• MA 50: 0.6483 | Negative Crossover | Bearish

Simple:

• MA 5: 0.6405 | positive Crossover | Bullish
• MA 20: 0.6416 | positive Crossover | Bullish
• MA 50: 0.6484 | Negative Crossover | Bearish

RSI (Relative Strength Index): 49.13| Buy Zone | Bullish

Stochastic Oscillator: 64.48 | Buy Zone | Positive

Resistance And Support Levels: 

• R1: 0.6453 | R2: 0.6621
• S1: 0.6343 | S2: 0.6235

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.6510 | Take Profit: 0.6621 | Stop Loss: 0.6444

USD/JPY:

USD/JPY discovers support near 148.50 as the focus shifts to US PCE inflation.

Near 148.50, the USD/JPY pair drew interest and then sharply recovered during the European session. Despite expectations of a covert intervention by the Bank of Japan (BoJ) in the FX market to defend the Japanese Yen against excessive volatility, the asset finds support.

In terms of the job market, consumer demand, and inflation, the US economy has excelled, but its manufacturing PMI has been declining steadily over the past 10 months. Investors predict a comeback in manufacturing operations as the order book for essential items unexpectedly increased in August. Investors had expected a 0.5% decrease in orders for durable goods, but they actually increased by 0.2%. Orders fell significantly by 5.6% in July.

On the prospect of a Bank of Japan (BoJ) intervention, the Japanese Yen might increase. Shunichi Suzuki, the finance minister of Japan, reaffirmed on Thursday that he wouldn’t rule out taking any action in the event of extreme FX volatility. He continued by saying that the authority is urgently monitoring FX developments.

Technical Overview:

Moving Averages:

Exponential:

• MA 5: 149.13 | Positive Crossover | Bullish
• MA 20: 147.95 | Positive Crossover | Bullish
• MA 50: 145.96 | Positive Crossover | Bullish

Simple:

• MA 5: 149.23 | Positive Crossover | Bullish
• MA 20: 147.95 | Positive Crossover | Bullish
• MA 50: 145.64 | Positive Crossover | Bullish

RSI (Relative Strength Index): 62.43 | Buying Zone | Bullish

Stochastic Oscillator: 82.07| Buy Zone | Negative

Resistance And Support Levels: 

• R1: 149.43 | R2: 151.85
• S1: 147.80 | S2: 146.33

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 149.95| Take Profit: 151.85 | Stop Loss: 148.75

Elsewhere in the Forex Market

NZD/USD up 0.58% to 0.5995. The EUR/JPY up 0.08% to 157.84. The USDCHF up 0.01% at 0.9149. USD/CAD up 0.7% at 1.3580, EUR/GBP down 0.02% at 0.8656. The USD/CNY is down 0.01% at 7.3015, AUD/SEK is up 0.03% at 7.0195, and CHF/SGD is down 0.01% at 1.4928 at the time of writing.

Key Economic Events & Data Release for Upcoming Week:

(USD) ISM Manufacturing PMI (Sep) (Monday).

(USD) Fed Chair Powell Speaks (Monday).

(GBP) Manufacturing PMI (Sep) (Monday)

(AUD) RBA Interest Rate Decision (Oct) (Tuesday).

(NZD) RBNZ Interest Rate Decision (Wednesday).

(USD) ADP Nonfarm Employment Change (Sep) (Wednesday).

(USD) Initial Jobless Claims (Thursday).

(CAD) Ivey PMI n.s.a (Sep) (Thursday)