. Weekly FX Analysis - GBP/USD soars, EUR/USD rejects, AUD/USD steady, USD/JPY turbulent.

Weekly FX Analysis – GBP/USD soars, EUR/USD rejects, AUD/USD steady, USD/JPY turbulent.

Weekly FX Analysis – GBP/USD soars, EUR/USD rejects, AUD/USD steady, USD/JPY turbulent.

06 Jan 2024

Introduction 

In the dynamic currency markets, GBP/USD surpassed 1.2700 amid a USD sell-off following robust NFP results. While US job additions exceeded expectations, looming revisions and weak ISM Services PMI contributed to the Greenback’s decline. The focus shifts to UK GDP and output figures. In contrast, EUR/USD faced volatility, ending near 1.0940 after Eurozone inflation impacted ECB decisions. AUD/USD remained steady above 0.6700 amid mixed US signals, and USD/JPY hovered near 145.00 post-NFP turbulence. Japanese inflation figures will be closely monitored in the week ahead. 

Markets In Focus Today – GBP/USD

GBP/USD climbs above 1.2700 as USD selloff continues.  

The Pound Sterling climbed over the Greenback after markets surged in the NFP aftermath. US jobs additions easily cleared expectations, but revisions loom ahead. US data dominates Friday, UK looks ahead to GDP and output figures next Friday.

GBP/USD extended the rally in the American session and advanced beyond 1.2700. After gathering strength with the initial reaction to the December jobs report, the USD came under heavy selling pressure on improving risk mood and weak ISM Services PMI reading.

GBP/USD gathered bullish momentum and climbed to 1.2730 in the European session on Thursday but reversed its direction in the second half of the day to close virtually unchanged below 1.2700. The pair stays relatively quiet and fluctuates in a narrow band early Friday. 

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 : 1.25 | Positive Crossover | Bullish 

RSI (Relative Strength Index) : 55.85 | Neutral Zone | Neutral 

Stochastic   Oscillator : 34.87 | Neutral Zone | Neutral 

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: 1.2678 | Take Profit: 1.2831 | Stop Loss: 1.2598 

EUR/USD

EUR/USD ends NFP Friday near where it started after rejection from 1.1000.  

EUR/USD whipped in hectic Friday action following Eurozone inflation, US labor data. European inflation continues to hamper the ECB, while US jobs data beat the street.

EUR/USD wraps up the week near 1.0940. The EUR/USD fell to a three-week low on Friday after European inflation rebounded higher in December, with the Eurozone Harmonized Index of Consumer Prices (HICP) for the year ended December climbing to 2.9% versus November YoY 2.4%. Markets were expecting a print of 3.0%, but higher inflation of any amount reduces the chances of the European Central Bank (ECB) cutting interest rates to reduce borrowing and lending costs. 

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) : 50.40 | Buy Zone | Bullish 

Stochastic   Oscillator : 19.66 | Neutral Zone | Positive 

Resistance   And Support Levels :  

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

Overall Sentiment : Neutral  Market Direction : Buy  

Trade Suggestion : Limit Buy : 1.0914 | Take Profit : 1.1011 | Stop Loss : 1.0854 

AUD/USD

AUD/USD steady above 0.6700 amid mixed US economic signals.  

AUD/USD shows marginal gains in volatile session, reacting to US job strength and services sector deceleration. Solid US Nonfarm Payrolls and a decline in Services PMI create a mixed economic landscape, impacting currency dynamics.

Trader’s eye upcoming US inflation data and Australian Retail Sales for further directional cues in the week ahead. The AUD/USD is almost flat during the North American session, after mixed economic data from the United States (US) keeps the Greenback seesawing between gains and losses.

A solid employment report in the US and weaker business activity in the services sector keep investors scratching their heads about the economy’s outlook. The pair, post minuscule gains of 0.11%, trades at 0.6711. 

Technical   Overview With Chart :

Moving Averages :

Exponential :

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

Simple :

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

RSI (Relative Strength Index) : 51.29 | Buy Zone | Bullish 

Stochastic   Oscillator : 22.94 | Sell Zone | Positive 

Resistance   And Support Levels :  

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

Overall Sentiment : Bullish Market Direction : Buy  

Trade Suggestion : Limit Buy : 0.6674 | Take Profit : 0.6817 | Stop Loss : 0.6601 

USD/JPY

USD/JPY churns near 145.00 in post-NFP turbulence, set to end Friday where it started.  

USD/JPY touched 146.00 in the pre-NFP market runup before slumping back. Yen set for another significant down week, falling a full percent against most major currencies. Broad-base JPY selling to dominate market themes as Yen pairs rebalance recent losses.

The USD/JPY spiked to a near-term high at the 146.00 handle early Friday in the broad-market run-up to the US Nonfarm Payrolls release, which surged above market forecasts and sent the US Dollar (USD) back down against the Japanese Yen (JPY) as markets weighed odds of Federal Reserve (Fed) rate cuts in the face of a still-firm US labor market.

Next week kicks off with a fresh reading of Japanese Tokyo Consumer Price Index (CPI), and investors will be keeping a close watch on Japan inflation figures as markets continue to look for signs of the Bank of Japan (BoJ) getting pushed out of its deeply entrenched hyper easy monetary policy hole. 

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 143.04 | Positive Crossover | Bullish 
  • MA 20 : 143.47 | Positive Crossover | Bullish 
  • MA 50 : 145.30 | Negative Crossover | Bearish 

Simple :

  • MA 10 : 142.42 | Positive Crossover | Bullish 
  • MA 20 : 142.87 | Positive Crossover | Bullish 
  • MA 50 : 146.61 | Negative Crossover | Bearish 

RSI (Relative Strength Index) : 53.22 | Buy Zone | Bullish 

Stochastic   Oscillator : 77.82 | Buy Zone | Neutral 

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 : 143.97 | Take Profit : 146.66 | Stop Loss : 142.13 

Elsewhere In The Forex Market

NZD/USD up 0.14% to 0.6243. The USD/CAD up 0.09% to 1.3362. The USDCHF down 0.02% at 0.8501. EUR/GBP down 0.33% at 0.8601. The USD/CNY down 0.07% at 7.1333, AUD/SEK up 0.22% at 6.8689, CHF/SGD up 0.04% at 1.5640 at the time of writing.

Key Economic Events & Data Release Today:

(AUD) Retail Sales (MoM) (Nov) (Tuesday)

(USD) Crude Oil Inventories (Wednesday)

(USD) CPI (MoM) (Dec) (Thursday)

(USD) CPI (YoY) (Dec) (Thursday)

(USD) Core CPI (MoM) (Dec) (Thursday)

(USD) Initial Jobless Claims (Thursday)

(CNY) CPI (YoY) (Dec) (Friday)