. Weekly FX Analysis - Strong data lifts currencies, awaiting central bank cues.

Weekly FX Analysis – Strong data lifts currencies, awaiting central bank cues.

Weekly FX Analysis – Strong data lifts currencies, awaiting central bank cues.

25 Nov 2023

Introduction:

In the world of currency markets, GBP/USD has surged to a 12-week high, surpassing 1.2600, propelled by positive UK data and rising yields. Meanwhile, the EUR/USD is aiming for 1.0950 amid a risk rally, and the AUD/USD hits a three-month high driven by market sentiment. USD/JPY remains stable, poised for a potential uptrend. Investors anticipate key economic releases in the week ahead, shaping the direction of these currency pairs.

GBP/USD:

Positive data leads to a 12-week high for GBP/USD.

The GBP/USD has surpassed the 1.2600 mark, propelled by positive UK data and an increase in UK yields. While US data showed a mix of strong Services and Composite PMIs, the Manufacturing PMI contracted.

The upcoming speeches from the Bank of England Governor and economic reports from the US are expected to offer additional insights into the direction of GBP/USD.

The British Pound (GBP) has reached a fresh 12-week peak against the US Dollar (USD) following the disclosure of encouraging data on Thursday. This development triggered a sell-off in Gilts, leading to an increase in UK bond yields. Currently, the GBP/USD stands at 1.2606, having peaked at 1.2615.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.2533 | Positive Crossover | Bullish
  • MA 20: 1.2395 | Positive Crossover | Bullish
  • MA 50: 1.2357 | Positive Crossover | Bullish

Simple:

  • MA 5: 1.2535 | Positive Crossover | Bullish
  • MA 20: 1.2357| Positive Crossover | Bullish
  • MA 50: 1.2263 | Positive Crossover | Bullish

RSI (Relative Strength Index): 67.55 | Buy Zone | Bullish

Stochastic Oscillator: 87.69 | Buying Zone | Neutral

Resistance And Support Levels:

  • R1: 1.2620 | R2: 1.2768
  • S1: 1.2500 | S2: 1.2384

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 1.2648 | Take Profit: 1.2768 | Stop Loss: 1.2578

EUR/USD:

EUR/USD looks to move above 1.0950 after catching a bid on Friday.

Amidst a widespread risk rally concluding the trading week, the EUR/USD is experiencing an increase in demand. The late shift in market sentiment is propelling bids upward on the charts, constituting a technical rally. Mixed US PMI data has contributed to a weakening of the US Dollar.

As the trading week comes to a close and with US money markets closing early for the weekend at 13:00 EST, the EUR/USD is reaching the 1.0950 level. Markets are engaging in a final move toward a risk-oriented stance before the early market closure.

Investors will be directing their focus to more substantial data releases scheduled for the upcoming week, including mid-week releases of US Gross Domestic Product (GDP) and Eurozone Harmonized Index of Consumer Prices (HICP) inflation figures.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 1.0909 | Positive Crossover | Bullish
  • MA 20: 1.0796 | Positive Crossover | Bullish
  • MA 50: 1.0732 | Positive Crossover | Bullish

Simple:

  • MA 5: 1.0915 | Positive Crossover | Bullish
  • MA 20: 1.0767 | Positive Crossover | Bullish
  • MA 50: 1.0653 | Positive Crossover | Bullish

RSI (Relative Strength Index): 68.22| Buy Zone | Bullish

Stochastic Oscillator: 70.34 | Buy Zone | Negative

Resistance And Support Levels:

  • R1: 1.0946 | R2: 1.1040
  • S1: 1.0860 | S2: 1.0783

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 1.0960 | Take Profit: 1.1040 | Stop Loss: 1.0914

AUD/USD:

A risk-on mood drives the AUD/USD to a three-month high.

The AUD/USD is surging close to 0.6600, maintaining its upward path propelled by a positive market sentiment. Speculation about a potential shift in Fed policy persists due to conflicting US economic reports, notwithstanding recent hawkish comments.

The forthcoming economic events, including speeches from the RBA and crucial US data, are expected to provide new momentum for AUD/USD traders.

Rebounding from a daily low of 0.6549, the AUD/USD has risen for the second consecutive day, reaching a fresh three-month high of 0.6591 as of the current moment. The pair is staying just below the 0.6600 mark, supported by positive market sentiment and a general weakness in the US Dollar.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 0.6550| Positive Crossover | Bullish
  • MA 20: 0.6475 | Positive Crossover | Bullish
  • MA 50: 0.6444 | Positive Crossover | Bullish

Simple:

  • MA 5: 0.6557 | Positive Crossover | Bullish
  • MA 20: 0.6462 | Positive Crossover | Bullish
  • MA 50: 0.6407 | Positive Crossover | Bullish

RSI (Relative Strength Index): 64.56| Buying zone| Bullish

Stochastic Oscillator: 92.73 | Buy Zone | Positive

Resistance And Support Levels:

  • R1: 0.6588 | R2: 0.6718
  • S1: 0.6496 | S2: 0.6401

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 0.6622 | Take Profit: 0.6718 | Stop Loss: 0.6564

USD/JPY:

USD/JPY remains stable and positioned for a potential upward trend as the week comes to a close.

USD/JPY exhibits minimal fluctuations, signaling a steady close for the week. The weekly chart indicates a potential upward trend, with resistance observed at the Tenkan-Sen (149.53); a breach above this level might target 150.00.

Late in the North American session, the USD/JPY is nearly unchanged, poised to conclude the week close to today’s opening price. It is currently trading at 149.47, reflecting marginal losses of 0.02%.

Looking at the weekly chart, the USD/JPY displays an upward bias, and as the week concludes, a ‘dragonfly doji’ is taking shape. This suggests that the pair may continue its upward trend.

Technical Overview:

Moving Averages:

Exponential:

  • MA 5: 149.41 | Positive Crossover | Bullish
  • MA 20: 149.88 | Negative Crossover | Bearish
  • MA 50: 149.15 | Negative Crossover | Bearish

Simple:

  • MA 5: 149.02 | Positive Crossover | Bullish
  • MA 20: 150.22 | Negative Crossover | Bearish
  • MA 50: 149.61 | Negative Crossover | Bearish

RSI (Relative Strength Index): 47.25| Buy Zone | Bullish

Stochastic Oscillator: 33.27| Sell zone | Positive

Resistance And Support Levels:

  • R1: 149.73 | R2: 151.39
  • S1: 148.46 | S2: 147.15

Overall Sentiment: Bullish | Market Direction: Buy

Trade Suggestion: Stop Buy: 149.98| Take Profit: 151.39 | Stop Loss: 149.02

Elsewhere in the Forex Market

NZD/USD up 0.49% to 0.6077. The EUR/JPY up 0.22% to 163.40. The USDCHF down 0.3% at 0.8812. USD/CAD down 0.43% at 1.3637, EUR/GBP up 0.03% at 0.8671. The USD/CNY up 0.06% at 7.1497, AUD/SEK up 0.02% at 6.8809, CHF/SGD up 0.10% at 1.5176 at the time of writing.

Key Economic Events & Data Release for Upcoming Week:

(USD) Building Permits (Monday).

(AUD) Retail Sales (MoM) (Oct) (Monday).

(USD) CB Consumer Confidence (Nov) (Tuesday)

(NZD) RBNZ Interest Rate Decision (Tuesday).

(EUR German CPI (MoM) (Nov) (Wednesday).

(USD) GDP (QoQ) (Q3) (Wednesday).

(GBP) BoE Gov Bailey Speaks (Thursday)