. Weekly FX Analysis - Major pairs drop, market watches.

Weekly FX Analysis – Major pairs drop, market watches.

Weekly FX Analysis – Major pairs drop, market watches.

23 Mar 2024

Introduction

EUR/USD continues its two-day decline, plunging to 1.0800 amid a broad-market USD rally. Despite positive German economic data, the Euro loses 1.3% against the USD. Next week, US GDP and PCE inflation prints will be pivotal. Fed Chair Powell refrains from monetary policy discussions, leaving investors hungry for rate-cut clues. Pound Sterling weakens on BoE’s dovish tilt. Similarly, the Australian Dollar dips amidst a stronger USD. USD/JPY drops to 151.00 despite upbeat US Dollar sentiment.

Markets In Focus Today – EUR/USD

EUR/USD extends into a two-day plunge and tumbles to 1.0800.

Euro sheds 1.3% top-to-bottom in broad-market pullback into USD. Upbeat German data couldn’t keep the Euro afloat. US GDP and PCE inflation are to be key data prints next week. The EUR/USD lost further ground on Friday, as investors shrugged off above-forecast German economic data to bid up the US Dollar across the board. Mid-tier German sentiment indicators all came in well above expectations as consumer, investor, and business sentiment all improved. However, middling to soft economic data from Europe remains a key stumbling block for overly bullish confidence. Federal Reserve (Fed) Chairman Jerome Powell delivered a speech while attending a Fed Listens event in Washington, DC. Still, the Fed head was careful to avoid discussing any monetary policy issues, leaving rate-cut-hungry investors with little news to chew on heading into the weekend.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0873 | Negative Crossover | Bearish
  • MA 20 : 1.0870 | Negative Crossover | Bearish
  • MA 50 : 1.0859 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0890 | Negative Crossover | Bearish
  • MA 20 : 1.0878 | Negative Crossover | Bearish
  • MA 50 : 1.0842 | Negative Crossover | Bearish

RSI (Relative Strength Index): 41.6457 | Neutral Zone | Neutral

Stochastic   Oscillator : 28.8476 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.0876 R2 : 1.0924
  • S1 : 1.0722 S2 : 1.0674

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Stop Sell: 1.0798 | Take Profit: 1.0700 | Stop Loss: 1.0882

GBPUSD

Pound Sterling weakens as BoE turns slightly dovish on interest rates.

The Pound Sterling tumbles on increasing expectations that the BoE will opt for interest-rate cuts later this year. BoE Mann’s support for keeping interest rates unchanged in March boosted BoE rate cut prospects.UK Retail Sales data for February came in better than expected, although signaling little spending momentum among households. The Pound Sterling (GBP) remains vulnerable against the US Dollar in Friday’s early New York session as the market sentiment is quite bearish. The GBP/USD pair fails to find support as increasing expectations that the Bank of England (BoE) will cut interest rates this year outweigh February Retail Sales data, which broadly beat market expectations. On the domestic front, the Pound Sterling weakened after the BoE opted to keep interest rates on hold at 5.25% for the fifth time in a row on Thursday.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2711 | Negative Crossover | Bearish
  • MA 20 : 1.2712 | Negative Crossover | Bearish
  • MA 50 : 1.2683 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2738 | Negative Crossover | Bearish
  • MA 20 : 1.2724 | Negative Crossover | Bearish
  • MA 50 : 1.2681 | Negative Crossover | Bearish

RSI (Relative Strength Index): 39.2150 | Sell Zone | Bearish

Stochastic   Oscillator : 24.4153 | Sell Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.2735 R2 : 1.2794
  • S1 : 1.2541 S2 : 1.2482

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Stop Sell: 1.2593 | Take Profit: 1.2496 | Stop Loss: 1.2670

AUD/USD

Australian Dollar dips amid a stronger US Dollar awaits Fed Chair Powell’s speech.

Australian Dollar extends losses amid an improved US Dollar on Friday. The decline in the ASX 200 could have undermined the Australian Dollar.S&P Global Manufacturing PMI rose to 52.5 against the expected 51.7 and 52.2 prior. The Australian Dollar (AUD) depreciated for the second consecutive session on Friday, as the US Dollar (USD) strengthened following mixed S&P preliminary Purchasing Managers Index (PMI) data and robust weekly Jobless Claims from the United States (US). The Australian Dollar receives downward pressure from the decline in the ASX 200 Index. The Australian equity market experienced losses, particularly in energy and consumer stocks, despite the positive performance on Wall Street, where all three major benchmarks set record highs.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6559 | Negative Crossover | Bearish
  • MA 20 : 0.6559 | Negative Crossover | Bearish
  • MA 50 : 0.6566 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6573 | Negative Crossover | Bearish
  • MA 20 : 0.6556 | Negative Crossover | Bearish
  • MA 50 : 0.6552 | Negative Crossover | Bearish

RSI (Relative Strength Index): 42.9421 | Neutral Zone | Neutral

Stochastic   Oscillator : 40.5789 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.6580 R2 : 0.6620
  • S1 : 0.6453 S2 : 0.6413

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Stop Sell: 0.6505 | Take Profit: 0.6433 | Stop Loss: 0.6562

USD/JPY

USD/JPY drops to 151.00 on hot Japan’s inflation.

USD/JPY falls to 151.00 even though the appeal for the US Dollar is upbeat. The USD Index refreshes monthly high on upbeat US economic outlook. Japan’s hot inflation for February has improved the credibility of BoJ’s shift to policy normalization. The USD/JPY pair slips to 151.00 in Friday’s late European session. The Japanese Yen has been underpinned against the US Dollar as Japan’s hot February inflation data improved investors’ confidence in the Bank of Japan’s (BoJ) decision to pivot to policy normalization. The asset faces pressure despite the buoyant US Dollar amid a significant improvement in the United States economic outlook. Meanwhile, the US Dollar Index (DXY) refreshes its monthly high at 104.44 as investors hope that rate cuts by the Federal Reserve (Fed) won’t be so aggressive due to the upbeat US economic outlook.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 150.0979 | Positive Crossover | Bullish
  • MA 20 : 149.6422 | Positive Crossover | Bullish
  • MA 50 : 148.7992 | Positive Crossover | Bullish

Simple :

  • MA 10 : 149.3625 | Positive Crossover | Bullish
  • MA 20 : 149.5200 | Positive Crossover | Bullish
  • MA 50 : 148.9879 | Positive Crossover | Bullish

RSI (Relative Strength Index): 64.9601 | Buy Zone | Bullish

Stochastic   Oscillator : 92.0591 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 150.8153 R2 : 151.9920
  • S1 : 147.0060 S2 : 145.8293

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 150.55 | Take Profit: 151.78 | Stop Loss: 149.89

Elsewhere In The Forex Market

NZD/USD down 0.96% to 0.5985. The USD/CAD is up 0.56% to 1.3606. The USDCHF is down 0.04% at 0.8971. EUR/GBP down 0.2% at 0.8577. The USD/CNY is up 0.42% at 7.2288, AUD/SEK is up 0.19% at 6.8810, and CHF/SGD is up 0.39% at 1.5032 at the time of writing.

Key Economic Events & Data Release Today:

(USD) Building Permits (Monday) (USD) New Home Sales (Feb) (Monday) (USD) CB Consumer Confidence (Tuesday) (USD) Crude Oil Inventories (Wednesday) (AUD) Retail Sales (MoM) (Feb) (Thursday) (GBP) GDP (QoQ) (Q4) (Thursday) (GBP) GDP (YoY) (Q4) (Thursday) (EUR) German Unemployment Change (Mar) (Thursday)