. Weekly FX Analysis -Stay updated on Forex amid economic uncertainty.

Weekly FX Analysis – Stay updated on Forex amid economic uncertainty.

Weekly FX Analysis – Stay updated on Forex amid economic uncertainty.

17 Feb 2024

Introduction

GBP/USD rebounded from session lows, hovering below 1.2600 after a dip to 1.2550 post-stronger-than-expected US producer inflation data. The pair faced resistance amid cautious market sentiment. Meanwhile, EUR/USD held above 1.0750 following US data, signaling consolidation. AUD/USD aimed for positive territory, buoyed by Wall Street’s surge, while USD/JPY consolidated below 150.50, influenced by firmer USD and BoJ Ueda’s speech impact. Japanese Yen strength persisted amid doubts about BoJ’s early policy shift due to the unexpected Q4 GDP contraction.

Markets In Focus Today – GBP/USD

GBP/USD rebounds from session lows, and trades below 1.2600.

GBP/USD erased much of its daily losses after dropping to 1.2550 following the stronger-than-forecast US producer inflation data. However, with markets turning cautious in the American session, the pair struggles to reclaim 1.2600. GBP/USD benefited from the renewed US Dollar (USD) weakness and snapped a three-day losing streak on Thursday. The pair, however, lost its recovery momentum after testing 1.2600 and edged lower in the early European session on Friday. The 10-year US Treasury bond yield continued to correct lower following the disappointing Retail Sales data from the US on Thursday and weighed on the USD. Meanwhile, Bank of England’s Monetary Policy Committee (MPC) member Megan Greene reiterated on Thursday that the monetary policy will need to remain restrictive for some time, further supporting GBP/USD.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2611 | Negative Crossover | Bearish
  • MA 20 : 1.2634 | Negative Crossover | Bearish
  • MA 50 : 1.2631 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2598 | Positive Crossover | Bullish
  • MA 20 : 1.2648 | Negative Crossover | Bearish
  • MA 50 : 1.2675 | Negative Crossover | Bearish

RSI (Relative Strength Index): 44.8213 | Neutral Zone | Neutral

Stochastic   Oscillator : 27.2727 | Sell Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.2763 R2 : 1.2807
  • S1 : 1.2618 S2 : 1.2574

Overall Sentiment: Neutral Market Direction: Buy

Trade Suggestion: Stop Buy: 1.2620 | Take Profit: 1.2574 | Stop Loss: 1.2531

EUR/USD

EUR/USD holds above 1.0750 after US data.

EUR/USD recovered above 1.0750 after dropping to a daily low near 1.0730 in the American session. The data from the US showed that producer inflation rose at a stronger pace than expected in January, while consumer confidence improved marginally in early February. EUR/USD stays in a consolidation phase above 1.0750 on Friday after closing the previous two days in positive territory. Although the pair’s near-term technical outlook points to a buildup of bullish momentum, buyers could remain on the sidelines unless 1.0800 is flipped into support According to the CME FedWatch Tool, markets are currently pricing in a near 70% probability of the Federal Reserve (Fed) leaving the policy rate unchanged at the next two policy meetings.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0770 | Positive Crossover | Bullish
  • MA 20 : 1.0801 | Negative Crossover | Bearish
  • MA 50 : 1.0838 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0758 | Positive Crossover | Bullish
  • MA 20 : 1.0802 | Negative Crossover | Bearish
  • MA 50 : 1.0890 | Negative Crossover | Bearish

RSI (Relative Strength Index): 44.1563 | Neutral Zone | Neutral

Stochastic   Oscillator : 31.2428 | Neutral Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.0982 R2 : 1.1041
  • S1 : 1.0790 S2 : 1.0731

Overall Sentiment: Neutral Market Direction: Buy

Trade Suggestion: Stop Buy: 1.0787 | Take Profit: 1.0893 | Stop Loss: 1.0726

AUD/USD

Australian Dollar attempts to move into positive territory ahead of US PPI data.

The Australian Dollar depreciates as the US Dollar attempts to hold ground after recent losses. Australian employment data suggests that the RBA will avoid an interest rate hike in March. S&P/ASX 200 index improves following the overnight surge in Wall Street on market optimism. The US Dollar holds ground over market sentiment suggesting that the Fed will postpone rate cuts in the upcoming meetings. The AUD/USD pair received upward support after mixed economic data from the United States (US). Additionally, the Aussie Dollar received upward support as the S&P/ASX 200 index improved following the overnight surge in Wall Street.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6518 | Positive Crossover | Bullish
  • MA 20 : 0.6544 | Negative Crossover | Bearish
  • MA 50 : 0.6579 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6507 | Positive Crossover | Bullish
  • MA 20 : 0.6540 | Negative Crossover | Bearish
  • MA 50 : 0.6640 | Negative Crossover | Bearish

RSI (Relative Strength Index): 45.6424 | Neutral Zone | Neutral

Stochastic   Oscillator : 39.6476 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.6763 R2 : 0.6837
  • S1 : 0.6524 S2 : 0.6449

Overall Sentiment: Bearish Market Direction: Sell

Trade Suggestion: Limit Sell: 0.6547 | Take Profit: 0.6461 | Stop Loss: 0.6610

USD/JPY

USD/JPY holds gains below 150.50 pm firmer USD, Ueda’s speech.

USD/JPY is consolidating gains below 150.50 in the European morning on Friday. The Japanese Yen stalls a two-day rebound from the YTD low. The US Dollar regains upside momentum in tandem with the US Treasury bond yields while BoJ Ueda’s speech fails to inspire the Yen. On the Tokyo front, the Japanese Yen strengthens despite investors’ hope that the Bank of Japan (BoJ) will not soon exit the expansionary policy stance. The expectations of easy policy unwinding have waned as the Japanese economy has surprisingly entered into a technical recession. The Q4 GDP contracted by 0.1%, while investors forecasted an expansion of 0.3%.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 149.4777 | Positive Crossover | Bullish
  • MA 20 : 148.5821 | Positive Crossover | Bullish
  • MA 50 : 147.3476 | Positive Crossover | Bullish

Simple :

  • MA 10 : 149.4130 | Positive Crossover | Bullish
  • MA 20 : 148.5291 | Positive Crossover | Bullish
  • MA 50 : 145.7893 | Positive Crossover | Bullish

RSI (Relative Strength Index): 63.8793 | Neutral Zone | Neutral

Stochastic   Oscillator : 86.7964 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 148.5761 R2 : 150.4646
  • S1 : 142.4626 S2 : 140.5741

Overall Sentiment: Bullish Market Direction: Buy

Trade Suggestion: Limit Buy: 149.38 | Take Profit: 151.75 | Stop Loss: 147.86

Elsewhere In The Forex Market

NZD/USD up 0.24% to 0.6120. The USD/CAD is up 0.15% to 1.3484. The USDCHF is up 0.07% at 0.8805. EUR/GBP down 0.06% at 0.8544. The USD/CNY is down 0.04% at 7.1936, AUD/SEK is up 0.61% at 6.8639, and CHF/SGD is down 0.01% at 1.5291 at the time of writing.

Key Economic Events & Data Release Today:

(AUD) RBA Meeting Minutes (Monday) (CNY) PBoC Loan Prime Rate (Monday) (CAD) Core CPI (MoM) (Jan) (Tuesday) (AUD) Wage Price Index (QoQ) (Q4) (Tuesday) (USD) FOMC Meeting Minutes (Wednesday) (EUR) German Manufacturing PMI (Feb) (Thursday) (GBP) Manufacturing PMI (Thursday) (GBP) Service PMI (Thursday) (EUR) CPI (YoY) (Jan) (Thursday) (CAD) Core Retail Sales (MoM) (Dec) (Thursday) (USD) Initial Jobless Claims (Thursday) (USD) Manufacturing PMI (Feb) (Thursday) (USD) Existing Home Sales (Jan) (Thursday) (NZD) Core Retail Sales (QoQ) (Thursday) (EUR) German GDP (QoQ) (Q4) (Friday)