. Weekly FX Analysis - Sterling surge, USD/JPY rollercoaster.

Weekly FX Analysis – Sterling surge, USD/JPY rollercoaster.

Weekly FX Analysis – Sterling surge, USD/JPY rollercoaster.

24 Feb 2024

Introduction

Pound Sterling strengthens amid optimistic views on the UK’s economic outlook, while investors await guidance on Bank of England interest rates. EUR/USD remains near 1.0800, with minimal movement as markets await meaningful data next week. AUD/USD faces a fresh daily low in the mid-0.6500s due to modest USD buying, while USD/JPY experiences a pullback from weekly highs with a slight increase, signaling a neutral yet bullish undertone. Investors eye Japan’s National Consumer Price Index data for potential impact on the Bank of Japan’s policy stance.

Markets In Focus Today – GBP/USD

Pound Sterling climbs higher as economists remain gung-ho over UK’s economic outlook.

Pound Sterling trades in a narrow range as investors await fresh guidance on BoE interest-rate outlook. The UK business optimism improves amid imminent hopes for BoE pivoting to rate cuts. The US Dollar clings to gains amid Middle East tensions. The Pound Sterling (GBP) jumps higher in Friday’s early American session as the United Kingdom’s economic outlook strengthens. The GBP/USD pair advances toward Thursday’s high as market sentiment improves. Meanwhile, investors await fresh guidance on Bank of England (BoE) interest rates

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2631 | Positive Crossover | Bullish
  • MA 20 : 1.2636 | Positive Crossover | Bullish
  • MA 50 : 1.2632 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.2616 | Positive Crossover | Bullish
  • MA 20 : 1.2630 | Positive Crossover | Bullish
  • MA 50 : 1.2674 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 53.9946 | Buy Zone | Bullish

Stochastic   Oscillator : 65.1737 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 1.2762 R2 : 1.2806
  • S1 : 1.2617 S2 : 1.2573

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 1.2654 | Take Profit : 1.2770 | Stop Loss : 1.2593

EUR/USD

EUR/USD spins tires just north of 1.0800 as Friday wrap up goes nowhere.

EUR/USD continues to cycle north of 1.0800.European data confirms preliminary prints. Investors will have to wait until midweek for meaningful data. EUR/USD cycled on Friday, stuck in a near-term range between 1.0840 and 1.0810 as markets settle in for the weekend and gear up for the long wait for significant data. Fresh figure prints aren’t due until the back half of next week, and the pair is hanging onto the top half of the week’s chart action. Next week sees US Gross Domestic Product (GDP) on Wednesday, followed by German Retail Sales and German Consumer Price Index (CPI) figures on Thursday.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0797 | Positive Crossover | Bullish
  • MA 20 : 1.0804 | Positive Crossover | Bullish
  • MA 50 : 1.0833 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.0779 | Positive Crossover | Bullish
  • MA 20 : 1.0788 | Positive Crossover | Bullish
  • MA 50 : 1.0885 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 50.7030 | Buy Zone | Bullish

Stochastic   Oscillator : 63.6591 | Buy Zone | Neutral

Resistance   And Support Levels :

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

Overall Sentiment : Neutral Market Direction : Buy

Trade Suggestion : Limit Buy : 1.0818 | Take Profit : 1.0890 | Stop Loss : 1.0781

AUD/USD

AUD/USD drops to fresh daily low, around mid-0.6500s amid modest USD uptick.

AUD/USD fails to preserve its modest intraday gains amid the emergence of some USD buying. The Fed’s hawkish outlook supports elevated US bond yields and is seen underpinning the buck. A minor pullback in the equity markets further drives flows away from the risk-sensitive Aussie. The AUD/USD pair continues with its struggle to find acceptance or build on its strength beyond the 100-day Simple Moving Average (SMA) and attracts some intraday sellers near the 0.6580 region on Friday. The downfall picks up pace during the first half of the European session and drags spot prices to a fresh daily low, around mid-0.6500s amid a modest US Dollar (USD) uptick.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6540 | Positive Crossover | Bullish
  • MA 20 : 0.6546 | Positive Crossover | Bullish
  • MA 50 : 0.6574 | Negative Crossover | Bearish

Simple :

  • MA 10 : 0.6527 | Positive Crossover | Bullish
  • MA 20 : 0.6533 | Positive Crossover | Bullish
  • MA 50 : 0.6632 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 51.2799 | Buy Zone | Bullish

Stochastic   Oscillator : 73.0405 | Buy Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.6763 R2 : 0.6837
  • S1 : 0.6523 S2 : 0.6449

Overall Sentiment : Neutral Market Direction : Buy

Trade Suggestion : Limit Buy : 0.6549 | Take Profit : 0.6626 | Stop Loss : 0.6507

USD/JPY

USD/JPY Price Pullback from weekly high as buyers’ eye further gains.

USD/JPY dips but retains gains for the week with a slight 0.17% increase, hinting at a bullish undertone. Technical outlook suggests neutrality with an upward bias, positioned above the Ichimoku Cloud. Resistance and support levels outlined for potential bullish continuation or pullback scenarios. The USD/JPY retreats, after hitting weekly highs of 150.77, aim back below the 150.50 figure late in the North American session. The major exchanges hands at 150.44, down 0.05%, but set to finish the week with gains of 0.17%. On the Japanese Yen front, investors await the National Consumer Price Index (CPI) data for January, which will be published on Tuesday. The annual CPI excluding fresh food is expected to come out below 2.0% at 1.8% against the former reading of 2.3%. This would dampen the Bank of Japan’s (BoJ) plans to exit the decade-long expansionary policy stance.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 150.0173 | Positive Crossover | Bullish
  • MA 20 : 149.2575 | Positive Crossover | Bullish
  • MA 50 : 147.8777 | Positive Crossover | Bullish

Simple :

  • MA 10 : 150.2162 | Positive Crossover | Bullish
  • MA 20 : 149.1076 | Positive Crossover | Bullish
  • MA 50 : 146.4455 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 64.8186 | Buy Zone | Bullish

Stochastic   Oscillator : 88.0138 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 148.5458 R2 : 150.4342
  • S1 : 142.4322 S2 : 140.5438

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 150.04 | Take Profit : 151.81 | Stop Loss : 149.11

Elsewhere In The Forex Market

NZD/USD up 0.01% to 0.6195. The USD/CAD up 0.02% to 1.3509. The USDCHF up 0.09% at 0.8809. EUR/GBP up 0.01% at 0.8539. The USD/CNY down 0.02% at 7.1959, AUD/SEK up 0.28% at 6.7942, CHF/SGD down 0.07% at 1.5247 at the time of writing.

Key Economic Events & Data Release Today:

(USD) Building Permits (Monday) (USD) Core Consumer Confidence (Tuesday) (NZD) RBNZD Interest Rate Decision (Wednesday) (NZD) RBNZ Rate Statement (Wednesday) (USD) GDP (QoQ) (Q4) (Wednesday) (AUD) Retail Sales (MoM) (Jan) (Thursday)