. Weekly FX Analysis - GBP/USD, EUR/USD, AUD/USD, and USD/JPY Update

Weekly FX Analysis – GBP/USD, EUR/USD, AUD/USD, and USD/JPY Update

Weekly FX Analysis – GBP/USD, EUR/USD, AUD/USD, and USD/JPY Update

14 Oct 2023

Introduction:

In the dynamic world of foreign exchange markets, let’s delve into the latest developments for some of the key currency pairs. GBP/USD struggles to maintain its position above 1.2150, while EUR/USD faces headwinds around 1.05. AUD/USD hits weekly lows amidst a risk-off sentiment and mixed US data, while USD/JPY retraces due to dovish Fed remarks and declining US yields. These market movements reflect the influence of various factors, from geopolitical tensions to economic data and central bank statements.

GBP/USD:

GBP/USD falls below 1.2150 as USD rebounds.

After making an earlier attempt at a comeback, GBP/USD headed south on Friday and fell below 1.2100 in the second half of the day. Rising global tensions have caused a negative change in risk sentiment, which benefits the US Dollar and depresses the pair.

The GBP/USD pair dropped over 100 pip value on Thursday, wiping out all of the previous week’s gains. The pair staged a comeback early on Friday, staying above 1.2200.

After the September inflation announcement, US Treasury bond yields increased sharply on Thursday, which helped the US Dollar (USD) beat its competitors.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.2196 | Negative Crossover | Bearish
  • MA 20: 1.2252 | Negative Crossover | Bearish
  • MA 50: 1.2401 | Negative Crossover | Bearish

Simple:

  • MA 5: 1.2227 | Negative Crossover | Bearish
  • MA 20: 2.2219 | Negative Crossover | Bearish
  • MA 50: 1.2462 | Negative Crossover | Bearish

RSI (Relative Strength Index): 36.63 | Selling Zone | Bearish

Stochastic Oscillator: 74.43 | Buying Zone | Negative

Resistance And Support Levels:

  • R1: 1.2304 | R2: 1.2496
  • S1: 1.2117 | S2: 1.1921

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.2075 | Take Profit: 1.1921 | Stop Loss: 1.2197

EUR/USD:

EUR/USD falters on Friday, backsliding into 1.05.

EUR/USD sees continued selling pressure into the week’s end, tapping the 1.0500 major level.

Mixed data on European Industrial Production were released, and Christine Lagarde of the ECB reiterated her strict policy stance.

A decline in US consumer confidence is limiting the US Dollar’s upward gains and restricting losses for the Euro.

With European output data spreading to the middle and European Central Bank (ECB) President Christine Lagarde reiterating the ECB’s strict monetary policy stance until inflation meets the central bank’s 2% target, the EUR/USD spiked lower on Friday, closing at 1.0500.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.0546 | Negative Crossover | Bearish
  • MA 20: 1.0589 | Negative Crossover | Bearish
  • MA 50: 1.0696 | Negative Crossover | Bearish

Simple:

  • MA 5: 1.0564 | Negative Crossover | Bearish
  • MA 20: 1.0589 | Negative Crossover | Bearish
  • MA 50: 1.0728 | Negative Crossover | Bearish

RSI (Relative Strength Index): 38.43| Selling Zone | Bearish

Stochastic Oscillator: 74.56 | Buying Zone | Negative

Resistance And Support Levels:

  • R1: 1.0662 | R2: 1.0822
  • S1: 1.0497 | S2: 1.0323

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 1.0441 | Take Profit: 1.0323 | Stop Loss: 1.0529

AUD/USD:

AUD/USD slides to weekly lows amid risk-off mood mixed US data.

At 0.6289, the AUD/USD pair makes fresh weekly lows while losing 0.32%.

Consumer sentiment in the US declines according to the University of Michigan, and inflation forecasts rise.

Geopolitical issues in the Middle East and China’s faltering economy further depress AUD sentiment.

Despite poor US data hitting newswires, the Australian dollar (AUD) made fresh weekly lows of 0.6289 against the US dollar (USD) thanks to a risk-off impulse. However, the data hasn’t had much of an impact thus far. Therefore, after losses of 0.32%, the AUD/USD is currently trading at about 0.6290.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.6372| Negative Crossover | Bearish
  • MA 20: 0.6384 | Negative Crossover | Bearish
  • MA 50: 0.6424 | Negative Crossover | Bearish

Simple:

  • MA 5: 0.6372 | Negative Crossover | Bearish
  • MA 20: 0.6391 | Negative Crossover | Bearish
  • MA 50: 0.6424 | Negative Crossover | Bearish

RSI (Relative Strength Index): 37.89| Sell Zone | Bearish

Stochastic Oscillator: 43.73 | Neutral Zone | Negative

Resistance And Support Levels:

  • R1: 0.6406 | R2: 0.6554
  • S1: 0.6282 | S2: 0.6168

Overall Sentiment: Bearish | Market Direction: Sell

Trade Suggestion: Stop Sell: 0.6251 | Take Profit: 0.6168 | Stop Loss: 0.6316

USD/JPY:

USD/JPY retraces amid dovish Fed remarks, falling US yields.

The USD/JPY is losing ground, closing at 149.57, down 0.16%.

US Consumer Sentiment drops to 63 in October, falling short of expectations and data from the prior month.

The USD is weighed down by dovish remarks made by Fed officials, especially Patrick Harker.

Falling US Treasury bond rates contributed to the USD/JPY’s loss of some traction following lower US data that indicated Americans’ level of economic optimism was declining. The USD/JPY also suffered from dovish remarks made by US central bank officials. It peaked at 149.83 and then fell to the current exchange rate of 149.57, down 0.16%.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 149.31 | Positive Crossover | Bullish
  • MA 20: 148.71 | Positive Crossover | Bullish
  • MA 50: 147.01 | Positive Crossover | Bullish

Simple:

  • MA 5: 149.12 | Positive Crossover | Bullish
  • MA 20: 148.86 | Positive Crossover | Bullish
  • MA 50: 147.15 | Positive Crossover | Bullish

RSI (Relative Strength Index): 59.26| Buying Zone | Bullish

Stochastic Oscillator: 41.23| Neutral Zone | Positive

Resistance And Support Levels:

  • R1: 149.87 | R2: 151.93
  • S1: 148.06 | S2: 145.90

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 150.20| Take Profit: 151.92 | Stop Loss: 149.45

Elsewhere in the Forex Market

NZD/USD down 0.74% to 0.5882. The EUR/JPY down 0.35% to 157.08. The USDCHF down 0.66% at 0.9023. USD/CAD down 0.26% at 1.3655, EUR/GBP down 0.03% at 0.8644. The USD/CNY up 0.06% at 7.3060, AUD/SEK up 0.02% at 6.9480, CHF/SGD up 0.62% at 1.5175 at the time of writing.

Key Economic Events & Data Release for Upcoming Week:

(JPY) Industrial Production (MoM) (Aug) (Monday).

(CAD) Manufacturing Sales (MoM) (Aug) (Monday).

(NZD) CPI (QoQ) (Q3) (Tuesday)

(AUD) RBA Meeting Minutes (Tuesday).

(CAD) Core CPI (MoM) (Sep) (Tuesday).

(USD) Retail Sales (MoM) (Sep) (Tuesday).

(USD) Building Permits (Sep) Wednesday

(CNY) GDP (YoY) (Q3) (Wednesday).

(EUR) CPI (YoY) (Sep) (Wednesday)

(AUD) Employment Change (Sep) (Thursday)