. Weekly FX Analysis - Pound vs. Dollar, Euro's ECB moment, AUD surprises, USD/JPY bullish.

Weekly FX Analysis – Pound vs. Dollar, Euro’s ECB moment, AUD surprises, USD/JPY bullish.

Weekly FX Analysis – Pound vs. Dollar, Euro’s ECB moment, AUD surprises, USD/JPY bullish.

20 Jan 2024

Introduction

Pound Sterling faced headwinds against a resurgent US Dollar, leading to a correction from two-week highs in GBP/USD. Meanwhile, key events such as the ECB decision, US GDP, and PCE inflation data are anticipated to impact market dynamics. Additionally, the EUR/USD pair reflects a bearish technical stance, influenced by factors like US economic resilience and a shift in sentiment. Meanwhile, the Australian Dollar (AUD) exhibits strength against the USD, buoyed by positive consumer sentiment despite a challenging housing market report. The USD/JPY pair shows mild gains, closing a winning week, with the Bank of Japan’s upcoming meeting holding significance for potential bullish momentum.

Markets In Focus Today – GBP/USD

Pound Sterling loses ground despite hotter-than-expected UK inflation.

GBP/USD corrected from two-week highs amid resurgent US Dollar demand.Top-tier US economic data to grab attention in the upcoming week.Pound Sterling buyers could regain control amid bullish technicals. The Pound Sterling (GBP) gave in to the resurgent US Dollar (USD) this week, motivating GBP/USD sellers to fight back control, as the tempered rate cut outlook from the US Federal Reserve (Fed) bolstered the sentiment around the US Dollar. US Dollar regained poise, hurt the Pound Sterling.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.27 | Negative Crossover | Bearish
  • MA 20 : 1.27 | Positive Crossover | Bullish
  • MA 50 : 1.26 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.27 | Negative Crossover | Bearish
  • MA 20 : 1.27 | Negative Crossover | Bearish
  • MA 50 : 1.26 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 52.21 | Buy Zone | Bullish

Stochastic   Oscillator : 51.68 | Buy 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 : 1.2696 | Take Profit : 1.2839 | Stop Loss : 1.2613

EUR/USD

ECB decision, US GDP and PCE inflation may rock the boat.

The European Central Bank is expected to maintain its monetary policy unchanged in January.The United States will publish fresh inflation and growth-related data.The EUR/USD pair is technically bearish, but data will set the trend. The EUR/USD pair lost the 1.0900 threshold this last week as a souring market mood backed the US Dollar. Financial markets base their decisions on two main reasons. On the one hand, investors pulled some bets from the table on the United States (US) cutting rates next March as economic data indicated the local economy remains resilient.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.09 | Negative Crossover | Bearish
  • MA 20 : 1.09 | Negative Crossover | Bearish
  • MA 50 : 1.09 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.09 | Negative Crossover | Bearish
  • MA 20 : 1.10 | Negative Crossover | Bearish
  • MA 50 : 1.09 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 45.96 | Neutral Zone | Neutral

Stochastic   Oscillator : 18.88 | Sell Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Stop Buy : 1.0906 | Take Profit : 1.1014 | Stop Loss : 1.0843

AUD/USD

AUD/USD Price Hurdles 200-DMA and turns bullish, eyeing 0.6600

AUD/USD gains 0.34% on positive sentiment, defying a negative housing market report impact.Neutral bias with an upside tilt; breach of 200-DMA at 0.6579 may target 0.6600 and 0.6639. The Australian Dollar (AUD) registers solid gains from the US Dollar (USD) amid an upbeat market mood following the release of an improvement in consumer sentiment and a bad housing market report. At the time of writing, the AUD/USD exchanges hands at 0.6373, gains 0.34%.

Technical   Overview With Chart :

Moving Averages :

Exponential :

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

Simple :

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

RSI (Relative Strength Index) : 39.49 | Sell Zone | Bearish

Stochastic   Oscillator : 15.25 | Sell Zone | Positive

Resistance   And Support Levels :

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

Overall Sentiment : Bearish Market Direction : Sell

Trade Suggestion : Limit Sell : 0.6618 | Take Profit : 0.6524 | Stop Loss : 0.6690

USDJPY

Bulls hold territory ahead of BoJ decision, closes a winning week.

The USD/JPY pair sees mild gains, settling at 148.25.No policy changes are expected at next week’s BoJ meeting; guidance will be looked upon.Despite bearish undertones in the four-hour-chart outlook, the pair’s position above the 20,100,200-day SMAs indicates a broader bullish control. On Friday’s session, the USD/JPY was observed to be mildly gaining, currently trading at 148.25, and will close a 2% winning week. Dominating the daily chart, bullish sentiments prevail, with the bulls firmly holding their stance but seem to be taking a breather. Next week, the bulls might get further momentum if the Bank of Japan (BoJ) does not give additional clues on its monetary policy plans.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 146.44 | Positive Crossover | Bullish
  • MA 20 : 145.45 | Positive Crossover | Bullish
  • MA 50 : 145.65 | Positive Crossover | Bullish

Simple :

  • MA 10 : 146.20 | Positive Crossover | Bullish
  • MA 20 : 144.31 | Positive Crossover | Bullish
  • MA 50 : 145.74 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 66.83 | Buy Zone | Bullish

Stochastic   Oscillator : 94.16 | 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 : 147.81 | Take Profit : 151.26 | Stop Loss : 145.81

Elsewhere In The Forex Market

NZD/USD down 0.02% to 0.6113. The USD/CAD down 0.43% to 1.3429. The USDCHF down 0.01% at 0.8679. EUR/GBP up 0.16% at 0.8573. The USD/CNY down 0.04% at 7.1934, AUD/SEK up 0.20% at 6.9063, CHF/SGD down 0.24% at 1.5445 at the time of writing.

Key Economic Events & Data Release Today:

(JPY) BoJ Monetary Policy Statement (Tuesday) (JPY) BoJ Press Conference (Tuesday) (NZD) CPI (QoQ) (Q4) (Wednesday) (EUR) German Manufacturing PMI (Jan) (Wednesday) (USD) Manufacturing PMI (Jan) (Wednesday) (CAD) BoC Interest Rate Decision (Wednesday) (CAD) BoC Monetary Policy Report (Wednesday) (EUR) CPI (YoY) (Dec) (Wednesday) (EUR) ECB Interest Rate Decision (Jan) (Thursday) (EUR) ECB Monetary Policy Statement (Thursday) (USD) GDP (QoQ) (Q4) (Thursday) (USD) Initial Jobless Claim (Thursday) (JPY) Tokyo Core CPI (YoY) (Jan) (Friday)