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Daily FX Report

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Authors
Daria Efanova

Daria Efanova Head of Research

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EUR / USD

The EUR/USD currency pair is currently experiencing volatility as it consolidates within a wide range, with market participants closely monitoring upcoming inflation data and central bank decisions. The pair has recently dipped, nearing the critical 1.0500 level, reflecting market caution ahead of the U.S. Consumer Price Index (CPI) release.

Analysts suggest limited upside potential for EUR/USD, with a bearish outlook prevailing due to potential tariff headlines and a hawkish tilt from the Fed. Technical analysis indicates that EUR/USD faces resistance around 1.06, with a break below 1.0500 possibly resuming the bearish trend.

The euro's weakness is partly attributed to economic challenges in the eurozone, including rising inflation in Germany. Speculators have increased their net short positions on the euro, indicating a bearish sentiment in the futures market.

Overall, the euro's outlook remains challenging, with economic and political uncertainties weighing heavily on its performance against the dollar.

USD / JPY

The USD/JPY currency pair is currently navigating a critical technical level, the 200-day moving average, following a bullish breakout. Over the past day, USD/JPY experienced a modest upward movement, closing at 151.96 after reaching a high of 152.16, with the price largely oscillating within a narrow range. The pair remains below key resistance levels, notably the 50-day moving average at 152.13, while finding support around 151.05, indicating a consolidation phase.

This movement is closely linked to the dynamics of U.S. Treasury yields, which have held steady, thereby supporting the dollar against the yen. The correlation between USD/JPY and U.S. Treasury yields remains strong, indicating that any shifts in U.S. inflation data could significantly impact the pair. A stronger-than-expected U.S. inflation print could lead to higher yields, further boosting USD/JPY, while a weaker print might cap gains and invite selling pressure.

Overall, the USD/JPY outlook remains bullish, contingent on U.S. economic data outcomes, with traders advised to watch for the U.S. inflation data and any shifts in Treasury yields for further cues on the pair's trajectory.

GBP / USD

The GBP/USD currency pair is currently trading near the $1.2740 mark, experiencing relative stability due to the Bank of England's cautious stance on interest rates, which are maintained at 4.75%. Technical analysis indicates the pair is slightly above its pivot point, suggesting potential for an upward move if it remains above this level, with immediate resistance at $1.27996. However, a break below the pivot could lead to declines towards support levels at $1.26870.

The U.S. Dollar Index's mild bullishness, supported by stable economic data and rising U.S. Treasury yields, adds complexity to the pair's dynamics. The anticipation of the US Federal Reserve's interest rate decision and upcoming US CPI data are key factors that could influence the pair's movement. Despite the pound's recent gains, overall sentiment remains cautious due to global economic uncertainties and potential geopolitical risks.

Traders should closely monitor developments, as future movements will depend on both domestic UK factors and broader global economic conditions.

EUR / CHF

The EUR/CHF currency pair is at a critical juncture, influenced by upcoming monetary policy decisions from both the Swiss National Bank (SNB) and the European Central Bank (ECB). Market participants are divided on the SNB's potential rate cut, which could introduce significant volatility and impact the Swiss franc's strength. Despite potential rate cuts, the Swiss franc remains robust, supported by its status as a safe-haven asset amid global uncertainties.

Technical indicators suggest potential bullish momentum for EUR/CHF, with resistance levels at 0.9334, 0.9446, and 0.9520, and support at 0.9256 and 0.9211. The ECB's anticipated rate cut could exert downward pressure on the euro, contrasting with the SNB's more stable approach. Traders should be prepared for potential volatility and consider these technical levels when evaluating their strategies.

Overall, the EUR/CHF pair appears poised for significant movement, driven by both domestic and international monetary policy developments.

Economic Calendar

11122024

Contents

Disclaimer

This is a marketing communication. The information in this report is provided solely for informational purposes and should not be regarded as a recommendation to buy, sell or otherwise deal in any particular investment. Please be aware that, where any views have been expressed in this report, the author of this report may have had many, varied views over the past 12 months, including contrary views.

This report was prepared with the assistance of artificial intelligence.

A large number of views are being generated at all times and these may change quickly. Any valuations or underlying assumptions made are solely based upon the author’s market knowledge and experience.

Please contact the author should you require a copy of any previous reports for comparative purposes. Furthermore, the information in this report has not been prepared in accordance with legal requirements designed to promote the independence of investment research. All information in this report is obtained from sources believed to be reliable and we make no representation as to its completeness or accuracy.

This report is not subject to any prohibition on dealing ahead of the dissemination of investment research. Accordingly, the information may have been acted upon by us for our own purposes and has not been procured for the exclusive benefit of customers. Sucden Financial believes that the information contained within this report is already in the public domain. Private customers should not invest in these products unless they are satisfied that the products are suitable for them and they have sought professional advice. Please read our full risk warnings and disclaimers.

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