In this article, we have covered the highlights of global market news about the EUR/USD, USD/JPY, AUD/USD and GBP/USD.
EUR/USD: Rebound encounters resistance at 0.9870
The euro is now seeing some selling pressure, which drives the EUR/USD pair down from its recent daily highs above 0.9870.
In light of the ambiguous price action around the dollar and a persistent thirst for riskier assets, EUR/USD seeks to build on a promising start to the week.
Meanwhile, price movement around the spot is followed by an increase in German 10-year bund yields, always within the context of the larger stabilization above the 2.30% barrier.
On the domestic calendar, the ZEW institute’s monthly survey of economic sentiment in Germany and wider Euroland will be the main topic of discussion. Along with the speech by N. Kashkari of the FOMC, the NAHB index and Industrial Production are expected in the UK.
In the wake of the dollar’s weakening price action, the EUR/USD, which is still in recovery mode, is presently sailing toward the 0.9900 neighborhood.
Price movement around the euro is anticipated to closely track dollar trends, geopolitical tensions, and the Fed-ECB divergence in the interim. The latter is anticipated to continue to grow in light of recent findings from important economic indicators, given the continued strength of the US economy.
The USD/JPY is trading at a 32-year high, around 149.00, as traders seek new catalysts.
The USD/JPY pair recovers from a sudden intraday decline to the 148.00 area and moves back toward a 32-year top reached earlier this Tuesday. The pair is now trading at the 149.00 level, but there isn’t much bullish confidence as traders wait for a new trigger before setting up any other upward movement.
Shunichi Suzuki, the finance minister of Japan, issued a further warning on Tuesday, stating that the government will take firm action against extreme, speculator-driven currency movements. This ultimately proves a crucial barrier preventing bulls from making aggressive wagers on the USD/JPY pair and serving as a drag on current prices. Despite a significant disparity in the stances taken by the Federal Reserve and the Bank of Japan with regard to monetary policy, the downside is still cushioned.
In reality, the BoJ is still committed to maintaining its monetary easing and hasn’t yet shown any desire to raise interest rates from their current record-low levels. Governor Haruhiko Kuroda’s remarks last Friday that increasing interest rates now was inappropriate given the nation’s economic and pricing circumstances confirmed the dovish tendency. The JPY is also impacted by suggestions that a new stimulus in Japan might have a goal of $30 trillion.
AUD/USD Price Analysis: A breach of 0.6355 is necessary for further gains.
During Tuesday’s opening European session, the AUD/USD pair pushes higher over 0.6300 and oscillates between 0.6310 and 0.6310-15 as buyers approach the crucial short-term obstacle.
However, a convincing upward breach of the eight-day-old prior resistance line, now a support area at 0.6280, gives investors reason for optimism.
The AUD/USD buyers have recently seen resistance from a downward-sloping trend channel that has been present since early September, between 0.6055 and 0.6355.
However, the positive MACD signals and lately higher RSI, which are not overbought, point to an upward breach of the 0.6355 barriers for the Australian pair.
After that, the run-up toward the monthly high close to 0.6540 and the 200-SMA resistance at 0.6560 may serve as a cushion at the 100-SMA level near 0.6390.
Instead, pullback movements will continue to be difficult to execute until the AUD/USD prices maintain above the resistance-turned-support trend line of 0.6280.
If the pair’s sellers are in control above 0.6280, a fast decline into Friday’s bottom at 0.6200 cannot be ruled out.
GBP/USD: Policy reversals might surprise on the upside – OCBC
GBP/USD continued to rise. Although the pound is still in a precarious situation, OCBC Bank experts warn that policy reversals might potentially come as a pleasant surprise.
“Bullish momentum on the daily chart is unchanged, and the increase in the RSI indicates a possible moderation.”
Instantaneous resistance is at 1.1490. (50 DMA). 21 DMA support at 1.1225 and 1.1150.
“Renewed political concerns and policy reversals would cause GBP trading to remain turbulent.”
“Still-weak macro fundamentals (stagflation concerns), persistent political uncertainties, and deterioration in twin deficits on current account and fiscal accounts may continue to support sell GBP on rallies, though we continue to caution that U-turns in policies can also surprise on the upside,” the report stated.
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