In this article, we have covered the highlights of global market news about the NZD/USD, USD/JPY, GBP/USD and USD/CHF.
NZD/USD Price Analysis: Thursday’s Doji teases sellers beyond 0.5800
Following a fall from the monthly peak, NZD/USD remains protective above 0.5800, moving to 0.5830 during the Asian session on Friday. As a result, the Kiwi pair finds it challenging to explain the previous day’s bearish Doji candlestick and its inability to break over the 50-DMA barrier.
Though it should be observed that the RSI (14) is rising steadily without approaching the overbought zone, the sellers are in for a difficult battle.
But around 0.5720 and 0.5700, a two-week-old rising trend line and the prior resistance level from August 12 can provide a problem for short-term NZD/USD bearish.
The buyers’ final line of defense might then be the 21-DMA level of 0.5682, a breach of which could not be afraid to target the annual low established earlier in the month at 0.5510.
For the NZD/USD buyer to return, a daily close above the 50-DMA barrier at 0.5870 is required.
The 0.5900 barriers and the 0.6000 psychological magnets will be significant obstacles in the next run-up.
The USD/JPY consolidates ahead of the Bank of Japan’s policy announcement.
As the Asian Pacific session gets underway, the USDJPY slightly declines after a trading day in which the Japanese Yen stuck to gains, albeit modest, as seen by the USDJPY dropping 0.04%. This was due to a strong US Dollar supported by favorable US statistics. The Bank of Japan’s (BoJ) impending monetary policy announcement also supported the JPY. The USDJPY is now down 0.05% at 146.20.
US statistics supported the USD, but not when compared to the JPY.
During the New York session, the US Department of Commerce stated that the US economy expanded more quickly than anticipated. The third quarter’s Gross Domestic Product (GDP) increased by 2.6%, above expectations of 2.6%. It highlights the economy’s durability but wouldn’t stop the Federal Reserve from raising interest rates.
In the same report, consumer spending declined, which Fed officials applauded as a sign that they were succeeding in their goal of slowing the economy. Data showed that consumer expenditure had slowed from Q2’s 2% to Q4’s 1.4%.
GBP/USD sellers are skeptical below 1.1600, and US PCE inflation is being considered.
After welcoming bears from a monthly peak the day before, GBP/USD fails to protect them as it rounds to 1.1570 on Friday during Asian trading.
A lack of positive British stories combined with the broad rebound of the US dollar served to remind pair sellers. The US Core PCE Price Index for September, the Fed’s favored inflation indicator, is due out soon, and the current movement of the quotation seems constrained by the prevailing cautious attitude.
After the third-quarter Gross Domestic Product (GDP) increased 2.6% on an annualized basis, more than anticipated, on Thursday, the US Dollar Index (DXY) rebounded from a five-week low (Q3). However, it should be noted that the details indicating a fifth straight decline in private consumption confounded the Fed’s hawks because they demonstrated that policymakers are gradually moving toward their goal of slowing down private domestic demand, which might favor the easy rate hike discussions for December at the Federal Open Market Committee (FOMC) meeting the following week.
The USD/CHF oscillates over 0.9900 as the DXY strengthens, and attention switches to Fed policy.
Early in the Asian session, the USD/CHF entered a rangebound structure above the pivotal level of 0.9900 as investors turned their attention to the Federal Reserve’s monetary policy announcement (Fed). The asset made a strong comeback from around 0.9840 as investors returned to the risk-aversion theme and the US dollar index (DXY) surged substantially higher.
Following a collapse in Meta Platforms Inc. (META) on Thursday, the S&P500 lost two days of gains. The IT titan plummeted to a five-year low in the wake of a poor earnings report. This sparked the risk associated with holding cash in assets with a high perceived risk.
Following a positive Gross Domestic Product (GDP) report, the DXY saw unprecedented liquidity. Against expectations of 2.4%, the US GDP increased to 2.6% for the third quarter. Two consecutive quarters of CY2022’s recession from January to June were broken by a positive growth rate figure.
US Treasury yields are the instrument that have been influenced since the announcement of the GDP data. After the Commerce Department reported a dip in consumer spending, which makes up 70% of US economic activity, the yield on the 10-year US Treasury fell to 3.93%. 1.4% rise in consumer expenditure is still less than the 2% growth seen in the second quarter. Consumer spending is slowing down, suggesting that the inflationary pressures are really becoming too great.
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