. Weekly FX Analysis - Navigate forex's ups and downs ahead.

Weekly FX Analysis – Navigate forex’s ups and downs ahead.

Weekly FX Analysis – Navigate forex’s ups and downs ahead.

09 Mar 2024

Introduction

Pound Sterling strengthens against the US Dollar as sluggish US wage data boosts market sentiment. The US Unemployment Rate rises to 3.9%, prompting Bank of England policymakers to seek sustainable inflation reduction before normalizing policy. Meanwhile, Federal Reserve Chair Powell anticipates gaining confidence in achieving the inflation target. GBP/USD remains positive, fueled by expectations of a Fed rate cut before the Bank of England, reducing policy divergence. EUR/USD experiences volatility after mixed US NFP data, and AUD/USD climbs amid lower US yields and mixed jobs data. USD/JPY plunges to 147.00 on BoJ rate hike speculation ahead of the US NFP release.

Markets In Focus Today – GBP/USD

Pound Sterling rallies as sluggish US wage data improves market mood.

Pound Sterling exhibits strength against the US Dollar as the US Unemployment Rate rises to 3.9%. BoE policymakers want inflation to come down sustainably to 2% before a shift to policy normalization. Fed Powell expects the central bank is closer to gaining confidence that inflation will decline to the desired target. The Pound Sterling (GBP) strengthens in Friday’s early American session as the risk appetite of market participants improves. The appeal for risk-sensitive assets firms after the United States Bureau of Labor Statistics (BLS) reported that wage growth remains soft and the Unemployment Rate rises sharply in February. The appeal of the GBP/USD pair remains upbeat as markets broadly expect the Federal Reserve (Fed) to cut interest rates before the Bank of England (BoE) does so, which might reduce the policy divergence between them for some time.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2729 | Positive Crossover | Bullish
  • MA 20 : 1.2693 | Positive Crossover | Bullish
  • MA 50 : 1.2659 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2709 | Positive Crossover | Bullish
  • MA 20 : 1.2663 | Positive Crossover | Bullish
  • MA 50 : 1.2675 | Positive Crossover | Bullish

RSI (Relative Strength Index): 72.0204 | Buy Zone | Bullish

Stochastic   Oscillator : 90.5983 | Buy Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 1.2817 | Take Profit: 1.2889 | Stop Loss: 1.2774

EUR/USD

EUR/USD hits a new high before falling back after mixed US NFP drags on market sentiment.

EUR/USD spiked after the US NFP print, but mixed numbers confounded markets.US NFP showed more jobs added, but steep revisions crimp risk appetite. EUR/USD found some room on the top end on Friday, climbing to a fresh high for the week near 1.0980. When investors realized the US Nonfarm Payrolls (NFP) print was more complicated than the initial reaction, bullish momentum got pulled down. US NFP job additions came in above expectations, but the previous print was steeply revised lower, taking it down from an 11-month high. European final Gross Domestic Product (GDP) figures broadly came in at expectations, and markets will be pivoting to face next Tuesday’s Consumer Price Index (CPI) inflation prints for both the US and the euro area.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0876 | Positive Crossover | Bullish
  • MA 20 : 1.0850 | Positive Crossover | Bullish
  • MA 50 : 1.0845 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0867 | Positive Crossover | Bullish
  • MA 20 : 1.0823 | Positive Crossover | Bullish
  • MA 50 : 1.0856 | Positive Crossover | Bullish

RSI (Relative Strength Index): 65.3268 | Buy Zone | Bullish

Stochastic   Oscillator : 89.8254 | Buy Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Stop Buy: 1.0948 | Take Profit: 1.1037 | Stop Loss: 1.0896

AUD/USD

AUD/USD climbs higher amid mixed US jobs data, and lower US yields.

Australian Dollar rises and marks its third consecutive day of gains.US Non-farm Payrolls outperform expectations at 275K, but rising unemployment and lower wage growth hint at a cooling job market.AUD/USD’s rally was supported by dipping US 10-year Treasury yields and a weakening Dollar Index, amid global monetary policy re-calibrations. The Australian Dollar advanced for the third straight trading day, early in the North American session, edging up 0.35% and exchanging hands at 0.6654. Recently released data by the US Department of Labor revealed the US Nonfarm Payrolls for February exceeded estimates of 200K, came at 275K, and was higher than January’s downward revised 353K reading to 229 K. Further data underscored that the jobs market is cooling as the Unemployment Rate increased from 3.7% to 3.9%, while Average Hourly Earnings edged lower in monthly and annual figures.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6558 | Positive Crossover | Bullish
  • MA 20 : 0.6549 | Positive Crossover | Bullish
  • MA 50 : 0.6564 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6541 | Positive Crossover | Bullish
  • MA 20 : 0.6534 | Positive Crossover | Bullish
  • MA 50 : 0.6582 | Positive Crossover | Bullish

RSI (Relative Strength Index): 62.0335 | Buy Zone | Bullish

Stochastic   Oscillator : 82.7135 | Buy Zone | Positive

Resistance   And Support Levels :

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

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 0.6591 | Take Profit: 0.6659 | Stop Loss: 0.6553

USD/JPY

USD/JPY plunges to 147.00 on BoJ’s rate hike bets, US NFP eyed.

USD/JPY extends its losing spell as the Japanese Yen strengthens on hawkish BoJ bets. The US Dollar weakens on firm expectations for the Fed reducing interest rates in June. Investors await the US NFP for fresh guidance. The USD/JPY pair continues its losing spell for the fourth trading session on Friday. The asset falls vertically to 147.00 on firm expectations that the Bank of Japan (BoJ) will pivot to raising interest rates after keeping them in the negative territory for more than a decade. Market expectations for the BoJ exiting the ultra-dovish policy stance increased after a few policymakers said a positive wage cycle is in sight. This has convinced investors that steady wage growth would keep inflation above the 2% target. Investors hope the BoJ will quit the expansionary policy stance in the March policy meeting.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 149.2165 | Negative Crossover | Bearish
  • MA 20 : 149.3435 | Negative Crossover | Bearish
  • MA 50 : 148.4351 | Negative Crossover | Bearish

Simple :

  • MA 10 : 149.6903 | Negative Crossover | Bearish
  • MA 20 : 149.9473 | Negative Crossover | Bearish
  • MA 50 : 147.9130 | Negative Crossover | Bearish

RSI (Relative Strength Index): 34.9188 | Sell Zone | Bearish

Stochastic   Oscillator : 14.7944 | Sell Zone | Negative

Resistance   And Support Levels :

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

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 147.51 | Take Profit: 145.73 | Stop Loss: 148.77

Elsewhere In The Forex Market

NZD/USD up 0.06% to 0.6177. The USD/CAD up 0.2% to 1.3486. The USDCHF is down 0.06% at 0.8771. EUR/GBP down 0.56% at 0.8499. The USD/CNY is down 0.1% at 7.1850, AUD/SEK is up 0.05% at 6.7709, and CHF/SGD is down 0.11% at 1.5171 when writing.

Key Economic Events & Data Release Today:

(AUD) Building Approvals (MoM) (Monday) (EUR) German CPI (MoM) (Feb) (Tuesday) (GBP) Average Earnings Index + Bonus (Jan) (Tuesday) (USD) CPI (MoM) (Feb) (Tuesday) (GBP) Manufacturing Production (MoM) (Jan) (Wednesday) (GBP) GDP (MoM) (Jan) (Wednesday) (EUR) Industrial Production (MoM) (Jan) (Wednesday) (USD) Crude Oil Inventories (Wednesday) (USD) Retail Sales (MoM) (Feb) (Thursday) (USD) Core Retail Sales (MoM) (Feb) (Thursday) (USD) Initial Jobless Claims (Thursday)