Currency Pairs Market Analysis

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GBPUSD Technical Analysis

The GBPUSD pair started to lose value early on Thursday. The recovery it made on Wednesday was halted by the 10-day moving average (10DMA) at 1.2173. The UK's construction sector performed poorly in September, which is a negative sign. The pair might continue to lose value, with a risk of falling to 1.20 or even 1.1988. It might move within the range of 1.2074 to 1.2173 before falling again. A break above the 10DMA could reduce this downward pressure.

It might move within the range of 1.2074 to 1.2173 before falling again. A break above the 10DMA could reduce this downward pressure.​

 

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USDJPY Technical Analysis

The USDJPY is currently around the middle of Tuesday's range of 150.16 to 147.29. This movement was caused by signs that Japan might step in to help their weakening currency, the yen.

Recent reports from the Bank of Japan say there was no such intervention. However, people are still wary because the chance of intervention is high. They're waiting for the US September NFP report, which will give more information about the US job market and what the Federal Reserve might do next.

Daily technical studies are still positive, but the 4-hour structure has weakened. This suggests there's a risk of a downturn, even though strong bids on Tuesday have offset some of this risk.

The NFP report could trigger new activity and provide fresh signals for direction. If the September numbers are solid (at or above the expected 170K), it would ease the Federal Reserve and allow for higher interest rates for a longer time.

On the other hand, if hiring in September is weaker than expected, it would mean that the tight job market is being hurt by high borrowing costs. This could lead to worries about a major economic slowdown and require a more careful approach from the Federal Reserve.

We can expect new direction signals if either pivot point is broken. If it drops below 147.29 (Tuesday's low), there's a risk of a deeper drop. If it breaks above 150, it could signal a continuation of the bullish trend, although there's still a risk of intervention.

Resistance: 148.72 - 149.31 - 149.7
Support: 148.25 - 147.29 - 146.10 - 145.9​

 

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US Dollar Index Analysis

The US Dollar Index is currently trading in a tight range this Friday morning. The market is in a state of anticipation as it awaits the release of the US Non-Farm Payrolls (NFP) report, a key event this week.

The index remains above the trendline support at 106.01, following a two-day pullback from its 2023 peak at 107.03. This pullback appears to be a healthy correction of the larger uptrend, providing an opportunity for traders to re-enter the bullish market at better levels.

Daily studies continue to support a bullish outlook, suggesting a potential renewed push through the critical resistance zone at 107.00. A break above this level would signal a continuation of the bullish trend.

However, today's direction will likely be influenced by fundamental factors as traders seek more information about the state of the US labor market. This information will directly impact the Federal Reserve's perspective on future interest rates.

Job growth in the US is expected to slow slightly in September (NFP Sep 170K forecast vs Aug 187K), but the unemployment rate is anticipated to decrease from a 1 ½ year high (Sep 3.7% forecast vs Aug 3.8%). Wage growth is expected to remain strong (Sep 0.3% vs Aug 0.2%).

These forecasted numbers suggest that the US labor sector remains robust and is least affected by high borrowing costs among the economy's key sectors. Any expected easing is not likely to significantly impact the overall positive outlook.

In such conditions, the Federal Reserve may opt for another rate hike by year-end or more likely, maintain tight monetary policy for some time. This is because recent drastic measures to control inflation have not yet had the desired impact on the economy.

Two other reports from the US labor sector released earlier this week showed mixed results. Job openings rose well above forecasts, while hiring in the private sector fell significantly last month.

If the September NFP report exceeds expectations, it would reinforce the Federal Reserve's hawkish stance and further support the dollar. However, if the NFP report misses expectations, demand for the dollar would ease.

Initial direction signals are expected on a sustained break of trendline support (bearish) or a lift above pivotal barriers at 107.00 zone (bull

Resistance: 106.96; 107.13; 107.88; 108.79.
Support: 106.01; 105.50; 105.13; 104.32.​

 

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Strong Job Data Impacts Investments and Oil Prices

The path to a safe economic slowdown, which doesn't harm investments, is tricky. After the release of the latest job data (NFP data), people are worried. They think the fast growth might affect one of the main goals of the Federal Reserve (the Fed). The job data shows that there's not much improvement in job balance, so the Fed might need to take more actions. This strong job data could be seen as bad for investments and might make the dollar stronger.

Oil prices were already going down because people were scared of a recession caused by high interest rates. The strong job data might limit the increase in oil prices. If US 10-year loan interest rates get close to 5%, it might cause another drop in oil prices.​

 

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EURUSD: Euro Struggles Amid New Geopolitical Concerns​

The Euro is facing renewed pressure, nearing the 1.05 mark due to fresh geopolitical issues in the Middle East. Investors are gravitating back towards the US dollar, a traditional safe haven currency.

Despite a brief surge on Friday, where the Euro almost reached 1.06 after the announcement of new US jobs, it's back under pressure. This surge was in line with my previous predictions, where I suggested not betting on the US dollar below 1.05 due to a potential strong response from the Euro.

However, this response was short-lived due to escalating tensions in the Middle East following a Palestinian attack on Israel. If not for this, the Euro's rally might have lasted longer. Friday's job report was a boon for the US economy as it exceeded expectations, reinforcing the labor sector as a key strength and helping to keep inflation in check. There's still a slim chance that the Federal Reserve might increase rates again.

Friday afternoon's exchange rate behavior was deceptive. The announcement of new jobs led many investors to back the dollar, only to close their positions at a loss soon after. The Euro's strong response, resulting in weekly gains after 11 straight weeks of losses, serves as a reminder of its resilience under pressure. The future is uncertain with new factors coming into play. Increased geopolitical instability could cause unpredictable shocks in global markets.

It might be wise to adopt a wait-and-see approach. However, I still believe in buying the Euro on dips and particularly at new local lows.​

 

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EURUSD Technical Analysis

The EURUSD currency pair is currently following a downward trend, even though there has been a recent increase in its value.

There are certain points, known as resistance points, which could potentially halt the currency pair's upward movement. The first resistance point could be at 1.0617, which is where the recent high value was observed. Another resistance point could be at 1.0673, which aligns with the 34-day simple moving average (SMA), a trend indicator.

Further up, the 100-day and 200-day SMAs might also act as resistance points near the value of 1.0830.

On the other hand, if the value of the currency pair starts to decrease, it might find support (a level where the price might stop falling) near the recent low values of 1.0480 and 1.0440.​

 

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AUDUSD

The AUDUSD currency pair has seen a slight decrease in value in the early European trading hours on Tuesday. This comes after a small increase during the Asian trading hours, which was influenced by positive economic data from Australia and dovish remarks from officials of the Federal Reserve on Monday.

However, this recent upward trend faced some resistance and had difficulty breaking clearly above the 0.6400 zone. This zone was previously a Fibonacci support level but has now turned into a resistance level, further strengthened by the 20-day moving average (20DMA). When we look at the daily chart, technical indicators suggest a bearish trend. The 14-day momentum is in negative territory and the price action is being suppressed by a falling daily cloud. These factors suggest that the recent four-day recovery might be losing momentum.

The price action during Tuesday's Asian and early European sessions formed a bearish candle with a long upper shadow. This adds to the initial warning of a stall, which would become more likely if the price falls further and closes below the 10-day moving average (10DMA) at 0.6375. If this happens, it would shift the near-term focus lower again and could lead to a retest of last week's new low for 2023 at 0.6285.

On the other hand, if the price can sustain a break above the 0.6400 zone, it would be an initial sign that the recovery might continue. However, for this signal to be confirmed, we would need to see an acceleration through the falling 55-day moving average (55DMA) at 0.6458.

Resistance levels are at: 0.6403; 0.6432; 0.6458; 0.65.
Support levels are at: 0.6375; 0.6360; 0.6312; 0.6285.​

 

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USDJPY

The USDJPY currency pair has seen a resurgence of momentum on Tuesday, although it continues to trade within a range that has persisted for four consecutive days.

The currency pair's pullback from its 2023 peak of 150.16 has consistently found support at the rising 20-day moving average (20DMA), currently at 148.58, indicating strong buying interest.

The broader uptrend from the 2023 low of 127.22 remains unbroken, and the near-term price action suggests a minor correction before the bulls take over once again.

A close above the 10-day moving average (10DMA) at 149.12 would provide an initial bullish signal, paving the way for a retest of key resistance levels at 150.00 (a psychological level) and 150.16 (the high for 2023). These levels are just below the peak for 2022 and a multi-decade high of 151.94.

The daily chart shows strong positive momentum, with the Tenkan-sen and Kijun-sen lines in a bullish configuration. The price action is also supported by a rising and thickening daily Ichimoku cloud, keeping the focus on further upside potential.

However, traders should be cautious if the price breaks below the 20DMA, as this would weaken the near-term structure. A move and close below the spike low of 147.29 from October 3rd would be required to sideline the bulls and signal a deeper correction.

Resistance levels to watch are at: 149.12; 149.53; 150; and 150.16.
Support levels to watch are at: 148.00; 147.29; 146.1; and 145.9.​

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Gold

Our latest gold market analysis shows a rise in gold prices to $1,859, following a rebound from the $1,805 support area. Key indicators, including the RSI and stochastic indicator, suggested a potential rise. A bullish engulfing candlestick pattern near the $1,805 support on the daily chart signals a potential market reversal.

On the 4H chart, gold price is grappling with a non-linear trendline and RSI near level 70. However, a significant barrier at the $1,883 pivot point suggests a stronger bearish scenario. We suggest a sell stop at 1,849, targeting 1,806, with risk at 1,870.

Always do your own research before trading.​

Source: fxnews.me

 

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EURUSD

Despite recent bullish sentiment, the pair hasn't closed outside the declining channel or above the 1.065 pivot. While trading below this pivot and inside the channel, the outlook is bearish, with a potential decrease to a 1.041 support level.

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Source: fxnews.me

 

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NZDUSD

The NZDUSD currency pair, which represents the value of the New Zealand Dollar against the US dollar, is currently testing what we call 'signal lines' of a certain indicator. This is like a student taking a test to see how well they're doing.

Now, the price of this currency pair is moving above something known as the 'Ichimoku Cloud'. The Ichimoku Cloud is a tool that traders use to get an idea of where the market might be heading. When the price moves above this cloud, it usually suggests that we might see an upward trend. This means that the New Zealand Dollar could increase in value compared to the US dollar.

Traders are expecting that the price will test the upper boundary of this cloud, which is currently at 0.5995. If it passes this test, it could rise further to 0.6085. Think of this like a climber trying to reach a higher point on a mountain - if they succeed, they can aim for an even higher point.

Another sign that could confirm this upward trend would be if the price bounces back from the lower boundary of what's known as a 'bullish channel'. This channel is like a path that upward trends tend to follow.

However, there's always a chance that things won't go as expected. If the price breaks through the lower boundary of the Ichimoku Cloud and manages to stay under 0.5965, it would suggest that instead of rising, the New Zealand Dollar might decline in value against the US dollar to possibly around 0.5875. This would be like our climber slipping and falling down the mountain.

So, while current signs point towards an increase in the value of New Zealand Dollar against the US dollar, it's always important to keep an eye on these key levels as they can indicate potential changes in trend.​

 

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GBPJPY

In the daily chart, GBPJPY broke out of the channel, tested the 182.9 pivot, and rebounded. Today's session saw the bulls break the pivot, with the RSI indicator above 50, indicating a likely uptrend continuation.

Technical indicators suggest a bullish market direction, despite oscillators being in the sell zone. Moving averages signal a strong buy.

The 4H chart shows GBPJPY forming a new bullish trend, with RSI nearing overbought. We recommend waiting for a test of the 182.9 support before entering a long position.

If the price stays in the bullish channel, we target the 184.39 resistance.​

 

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GBPUSD

The GBPUSD currency pair, also known as "Cable", is currently around 1.23. It has been trying to get past the 1.2328 level, but it's been tough. This level is important because it's a key point on the chart that traders look at. Despite some not-so-great news about the UK's economy, the pound is still doing okay. The US dollar might get weaker because the US Federal Reserve (the Fed) is being careful with its money policies due to global economic issues and uncertainty. This could help the pound.

Later today, we'll get some data about US inflation (how much prices are rising). If inflation is as expected or lower, it could make the US dollar weaker and help the pound.

On the chart, things are looking up for the pound. However, there are some signs that it might be tough for the pound to keep going up. If the pound can get past 1.2328, it could keep going up. If it can't, it might start going down. Here are some key levels to watch:

Resistance: 1.2328 - 1.2386 - 1.2418 - 1.2443
Support: 1.2276 - 1.2240 - 1.2207 - 1.2187​

 

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AUDUSD

In the past few days, the Australian Dollar has been trying to increase its value. This attempt has seen some success, but not consistently across all major currencies. When we look at the daily chart for AUDUSD, we can see that it has started to rise slowly. This rise was hinted at by a positive RSI divergence. RSI divergence is a technical indicator that shows if the momentum of a price change is increasing or decreasing. In this case, it was positive, which means the momentum for a decrease in price was getting weaker. This suggested that the Australian Dollar might start to increase in value.

At this moment, the exchange rate of AUDUSD is just below the 50-day moving average. The 50-day moving average is a line on the chart that shows the average exchange rate over the past 50 days. It helps traders to see the overall trend of the exchange rate. In August, a technical pattern called a 'Death Cross' appeared between the 20-day and 50-day moving averages. This pattern is usually seen as a sign that the exchange rate might start to decrease.

So, even though the Australian Dollar has gained some value recently, the overall technical trend suggests that it might decrease again. Apart from the 50-day moving average, another important level to watch is the 0.6459 mark. This level acted as a turning point for the exchange rate in May.

If AUDUSD breaks above this level, it could go up to the next turning point at 0.6568, which was established in March. On the other hand, if AUDUSD starts to decrease, it could go down to the November low of 0.6272.​

 

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CPI: Not the most welcome outcome

Recent inflation reports have exceeded expectations, potentially offsetting the cautious tone from Federal Reserve officials. However, the focus seems to be on the duration of current interest rates rather than their height. Thus, a slightly higher inflation rate may not significantly disrupt the market.

The "Fed rhetoric shift" is becoming evident, with Christopher Waller's comments suggesting that the rise in yields could substitute for a rate hike. This indicates a possible shift towards a more dovish monetary policy.

The future hinges on economic indicators. Unless inflation rises unexpectedly or labor market imbalances lead to a wage-price spiral, the Fed may maintain a less hawkish stance. This could boost demand for longer-duration assets and foster a "Santa rally".

The market's reaction to today's CPI print is uncertain, but it may not be what investors were hoping for.​

 

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USDJPY: Temporary Pause, but Uptrend Persists

The USDJPY rally has recently hit a pause as it lingers near the firm resistance at the psychological level of 150, not too distant from the 2022 peak of 152. Nonetheless, there is no clear indication of a reversal in the ongoing uptrend. The price action for this month, thus far, can best be described as moving sideways, with the lower boundary finding support around the 200-period moving average, near the early-October low of 147.35.

Considering that USDJPY is currently within the intervention zone observed last year, breaking through the 150.00-152.00 range could be a challenging endeavor. This challenge is further accentuated by the views of some Federal Reserve officials who have suggested that interest rates may have peaked. For a more comprehensive understanding of the fundamental outlook, refer to the article "Japanese Yen Aided by Fed Pause View, Geopolitics; USDJPY, GBPJPY, AUDJPY," which was published on October 11. On the flip side, a drop below the 147.00-147.50 range would confirm a fading of the broader upward pressure. Such a decline could potentially pave the way towards the early-September low of 144.50.​

 

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EURUSD

The EURUSD pair is currently undergoing a test of the Tenkan-Sen line. The pair is trending downwards, beneath the Ichimoku Cloud, indicating a potential bearish trend. It's anticipated that there will be a test of the Cloud's upper boundary at 1.0565, which will then be followed by a drop to 1.0365. A bounce off the bullish channel's lower boundary will serve as an additional signal to confirm this downward trend. However, if there's a breakout at the Cloud's upper boundary and the price stabilizes above 1.0605, this scenario will be invalidated, suggesting a possible rise to 1.0705.

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NZDUSD

The NZDUSD pair, "New Zealand Dollar versus US Dollar", has managed to stay above the indicator's signal lines. The pair is trending downwards as it moves beneath the Ichimoku Cloud. It's anticipated that it will test the Cloud's lower boundary at 0.5935 before falling to 0.5845. A bounce off the bearish channel's upper boundary will serve as an additional signal confirming this downward trend.

However, if the price breaks out and settles above the Cloud's upper boundary at 0.5965, this scenario will be invalidated, indicating a potential rise to 0.6055. On the other hand, a breakout below the bullish channel's lower boundary and a settling price below 0.5905 could confirm the downward trend.​

 

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EURUSD

The European currency is stable between 1.05-1.06 levels due to lack of new data. Yesterday, there were no surprises due to the absence of significant economic data. The focus remains on the Middle East, but there are no signs of major escalation, bringing stability to international stock markets and reducing the need for dollar purchases.

It's too early to predict if de-escalation is likely. The European currency is under pressure due to ongoing concerns. Today's agenda includes U.S. retail sales data, which may confirm the U.S. economy's stronger momentum compared to Europe.

After a two-month downward trend, the European currency shows signs of stability. Unless there's a major market shock, it's likely to remain stable this month. As the market direction is unclear, it's best to wait and see. I'm considering buying more European currency after significant dips and new lows.​

 

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EURJPY

At the time of this EURJPY market analysis, the EURJPY is navigating a bullish channel, with the RSI indicator maintaining a position above the 50 level. On October 3, the pair managed to stay above the Ichimoku cloud, resulting in the continuation of the EURJPY uptrend. The primary hurdle for the EURJPY bulls is at the 158.64 mark.

For the bullish trend to persist, it's crucial for the EURJPY bulls to achieve a close above the 158.64 level. Should this occur, the next target for this currency pair would be projected towards the 162.0 area.​

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