Author: Ali B.

On the forex front, the ICE U.S. Dollar Index marked a day-low of 98.64 Friday before paring losses to close flat at 99.08. Research firm Markit will publish final readings of April Manufacturing PMI for the Eurozone (33.6 expected), Germany (34.4 expected), France (31.5 expected). The Eurozone Sentix Investor Confidence Index for May will be released (-28.0 expected). The Commerce Department will report March factory orders (-9.4% on month expected) and final readings of durable goods orders (-14.4% on month expected).

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD currency pair stopped its three-day winning streak and dropped to 1.0936 while representing 0.33% declines on the day mainly due to the broad-based U.S. dollar strength in the wake of risk-off market sentiment. However, the reason for the risk-off market sentiment could be attributed to the intensifying trade war between the U.S. and China. 

The EUR/USD is trading at 1.0936 and consolidates in the range between the 1.0935 – 1.0975. As we all well aware that the currency pair rose 0.48%, 0.75%, and 0.24% on Wednesday, Thursday, and Friday, respectively, but failed to extend its bullish rally on the first day of trading this week.

The GDP of the Eurozone dropped 3.8% in this quarter from the previous 14.4%. The ECB expects a 5% – 12% contraction in Eurozone’s economy this year. The International Monetary Fund (IMF) has forecasted the same Eurozone’s economic contraction as 5%, which was in line with the ECB’s projection. The ECB Vice President Luis de Guindos said in April that he expected a worse recession to be faced by the European economy than the rest of the world.

Furthermore, the President of the United States, Donald Trump, on Friday, announced to punish China for not holding the virus in its Wuhan city and mishandling the coronavirus outbreak by imposing tariffs. He said that trade relations with China were on his secondary importance now after the coronavirus outbreak. This also helped the EUR/USD pair to move upward.

The EUR was boosted by the hopes and hype of an early reopening of the economy across the globe. The pair EUR/USD was also helped by the developments made in COVID-19 vaccines, which caused the decreased demand for the U.S. dollar as a funding currency. EUR was also supported by the decreasing number of deaths and appearing cases in Germany, Italy, Spain, and France. Overall the EUR/USD pair has recovered from its March corona caused the lowest level of 1.0637 to its multi-week highest of 1.1019 on Friday.

Daily Support and Resistance

• R3 1.1005
• R2 1.0993
• R1 1.0977

Pivot Point 1.0965

• S1 1.095
• S2 1.0937
• S3 1.0922

EUR/USD– Trading Tips

On Monday, the EUR/USD price is holding at 1.0924 area, after placing a high of 1.0948 during the Asian session. On the 4 hour chart, the EUR/USD has formed a candlesticks pattern three black crows around 1.0927 level. Typically such a pattern shows that buyers are exhausted, and sellers may enter into the market soon. On the lower side, the EUR/USD pair has already completed 38.2% Fibonacci retracement at 1.0920, and now it can go for 50% retracement at 1.0900 mark. Both of the leading indicators are supporting the bullish trend, but a slight retracement can be expected. The resistance is likely to be found around 1.0971 and 1.0992. Consider staying bearish below 1.099 level today.  

GBP/USD – Daily Analysis

The GBP/USD failed to stop its Friday’s losses and dropped below 1.2450 level while representing 0.36% losses on the day as the U.S. dollar is benefitting again from the risk-off sentiment in the financial markets. However, the reason behind the risk-off market sentiment is the intensifying trade tussle between the U.S. and China. 

The on-going crisis of the UK Tory government about the mishandling of the virus situation also keeps the British Pound under pressure. The GBP/USD currency pair is currently trading at 1.2448 and consolidates in the range between the 1.2440 – 1.2487. On the other hand, the PMI from the U.S. also dropped to its 11 years lowest level at 41.5 and weakened the U.S. dollar across the board. However, the pair GBP/USD ignored US PMI and continued falling on Friday.

As for the news, Boris Johnson’s announcement for coming up with a plan on how to restart the economy next week did not give much impact to GBP. The biggest risks nowadays to the U.K.’s economy and the British Pound include the Brexit & coronavirus. 

As for Brexit, both parties Britain and the European Union has its differences in the future relationship. Another challenge of Brexit is the timeline for securing a deal because Johnson has insisted that the transition period will not be extended by his government. 

If Johnson will not seek an extension, which can only be applied before June 31, there is a possibility that both sides will not have a deal before the deadline of December. European Union insisted that an agreement of this size needs several years to be hammered. 

Daily Support and Resistance

• R3 1.2544
• R2 1.2524
• R1 1.249

Pivot Point 1.247

• S1 1.2436
• S2 1.2416
• S3 1.2382

GBP/USD– Trading Tip

The GBPUSD pair showed strong bearish movement to trade at 1.2445, testing a double top pattern around 1.2425. The recent Doji pattern on GBP/USD pair is suggesting chances of bullish correction over 1.2425 support level. This may lead the GBP/USD prices towards 1.2515 level. On the lower side, the violation of 1.2420 support can lead the Sterling prices towards the next target level of 1.2316. Overall, the trading bias of GBP/USD remains bullish, considering the 50 EMA as it’s keeping the Cable bullish above 1.2420 today.  

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 106.903 after placing a high of 107.405 and a low of 106.603. Overall the movement of USD/JPY remained bearish throughout the day. The USD/JPY pair during the America Session started to move upward towards the 107 level but failed to hold and preserve the recovery due to weak PMI.

At 4:30 GMT, the Tokyo Core CPI for the year was released, which showed a decline of -0.1% against the expected 0.1%. At 5:30 GMT, the Final Manufacturing PMI from Japan was released by the Bank of Japan for March, which showed that the manufacturing sector in Japan contracted to 41.9.

It was expected to remain the same as the previous month’s 43.7. The decline in manufacturing activity due to coronavirus pandemic resulted in weak Japanese Yen against the U.S. dollar. As for the U.S. data, at 18:45 GMT, the Final Manufacturing PMI form the U.S. was released, which came as 36.1 against the expectations of 36.9, and it weakened the U.S. dollar. At 19:00 GMT, the ISM Manufacturing PMI for the month of April was released, which was dropped to its 11 years lowest level at 41.5 from the previous month’s 49.1.

The drop in U.S. manufacturing activities due to a pandemic, which disturbed the supply chain across the globe, made the US PMI fell to its records low, and this weakened the U.S. dollar across the board on Friday. The weakened U.S. dollar pulled the pair USD/JPY to 106.6 level at the ending day of the week.

At 19:00 GMT, the Construction Spending from the U.S. also released, which came in as 0.9% against the -3.5% and supported the U.S. dollar. The ISM Manufacturing prices were also increased to 35.5 from the forecasted 30.7. The Wards Total Vehicle Sales during April were recorded as 8.6M against the 7.0M forecasted.

Daily Support and Resistance    

• R3 108.76
• R2 108.14
• R1 107.66

Pivot Point 107.03

• S1 106.55
• S2 105.92
• S3 105.44

USD/JPY – Trading Tips

The USD/JPY pair take’s a bearish turn in the wake of mixed sentiment to trade around 106.700. As we can see in the 4-hour chart above, the USD/JPY pair is struggling to cross over the downward trendline, which is extending resistance around 106.950. The 50 EMA is also keeping pressure on the pair around the same level of 107.050. Below this level, we may see a selling trend in the USD/JPY pair until the next target levels of 106.44 and 106. The 50 EMA and MACD are also suggesting selling bias for the USD/JPY pair. Taking a selling trade below 106.950 can be a good idea today.

All the best for today! 

The U.S. dollar traded with a selling bias in the wake of weaker economic data. The closely watched Unemployment Claims for a previous week from the United States weighed on the U.S. dollar when it came in as 3839K against the expected 3500K. The Personal Spending for the month of March from the U.S. was declined by -7.5% against the expected decline by -4.8% and added in the weakness of the U.S. dollar.

The Core Price Index for the month of March came in line with the expectations of -0.1% and had a null effect on the U.S. dollar. The Employment Cost for the first quarter of this year came in favor of the U.S. dollar when it exceeded 0.8% against the expectations of 0.7%. Later today, the market is expected to show thin volatility in the wake of Labor day holiday. However, investors will be focusing on the ISM Manufacturing PMI figures from the United States to drive further price action in the market. 

Economic Events to Watch Today     

EUR/USD – Daily Analysis

The direct currency pair EUR/USD surged dramatically to close the day at 1.09517, having placed a high of 1.09725 and a low of 1.08327 yesterday. The ECB held its rates unchanged on Thursday and said that it expects the rates to remain at the present level or lower levels until the inflation of the Eurozone meet the level or reach near the projection of 2%. ECB also said that it was ready to adjust all of its instruments to achieve its projected aim of inflation in a sustained manner.

The Euro gained bullish momentum, although French Flash GDP for the First Quarter dropped more than expectations. It was expected to decline by -4.0 % in the first quarter of this year, but the results showed that the actual drop in French Flash GDP was recorded as -5.8%. While the German Retail Sales data decline by -5.6% against the expectations of -8.1%, it was in favor of the single currency Euro as the actual drop in German Retail Sales was less than its forecasted value.

At 11:45 GMT, the French Consumer Spending in the month of March was dropped by -17.9%, which were assumed to be dropped by -5.7%, and hence it weighed on single currency Euro. The French Prelim Consumer Price Index for the month of April came in favor of Euro as 0.1%, which was expected to decline by -0.2%.

The Spanish Flash Gross Domestic Product (GDP) for the First Quarter of year also dropped more than expected and weighed on Euro. The drop-in Spanish GDP was recorded as -5.2% at 12:00 GMT, whereas it was expected to drop by -4.2%. The Spanish Flash Consumer Price Index (CPI) for the year also showed a decline in April by -0.7% when it was expected as-0.5% and weighed on Euro currency.

The single currency Euro remained supportive by the data and ECB’s decisions on Thursday and gave strength to EUR/USD pair. Though the quarterly GDP of the Eurozone dropped to its lowest level since the records, the EUR/USD pair still managed to remain bullish throughout the day. 

Daily Support and Resistance

• R3 1.115
• R2 1.1062
• R1 1.1009

Pivot Point 1.0921

• S1 1.0869
• S2 1.078
• S3 1.0728

EUR/USD– Trading Tips

On Friday, the EUR/USD price is holding at 1.0944 area, after placing a high of 1.0973 during the U.S. session on Thursday. On the 4 hour chart, the EUR/USD has formed a candlesticks pattern hanging man around 1.0955 level. Typically such a pattern shows that buyers are exhausted, and sellers may enter into the market soon. On the lower side, the EUR/USD pair can go for completing 38.2% Fibonacci retracement at 1.0920 and 50% retracement at 1.0900 mark. The trading sentiment for the EUR/USD continues to be bullish, especially after the bullish crossover of 50 EMA and MACD. Both of the leading indicators are supporting the bullish trend, but a slight retracement can be expected. The resistance is likely to be found around 1.0971 and 1.0992. Consider staying bearish below 1.099 level today.  

GBP/USD – Daily Analysis

During Thursday’s Asian session, the GBP/USD is trading slightly bearish around 1.2562, maintaining the overall trading range of 1.2644 to 1.2525. Most of the buying triggered in the wake of weaker U.S. Jobless Claims figures 

The U.K. Prime Minister, Boris Johnson, informed that the latest figure of 81,011 tests was hopeful, which were conducted on Wednesday, close to the government target of 100,000 tests per day by the end of April. He also said to the business community that he acknowledge their patience but informed that they have to keep going the way they are doing business now for the time being.

On the other hand, surgeons across the U.K. have warned that if the U.K. comes out of the lockdown too soon, it will cause the death of thousands. The Royal College of surgeons urged Prime Minister Boris Johnson to consider the service that saved his life when discussing the lifting of restrictions from lockdown.

Furthermore, there was no economic data or major event from the U.K. side, so the movement of the GBP/USD pair remained solely on USD. The U.S. dollar remained weak throughout the day because of poor economic data on Thursday. 

The unemployment claims for the previous week from the U.S. were recorded as 3839K against the expectations of 3500K. An increased number of unemployed people weighed on the U.S. dollar and helped the pair GBP/USD to move in an upward direction and close the month with a bullish candle.

Daily Support and Resistance

• R3 1.2896
• R2 1.2769
• R1 1.2682

Pivot Point 1.2555

• S1 1.2467
• S2 1.2341
• S3 1.2253

GBP/USD– Trading Tip

The GBPUSD pair showed strong bullish movement to trade at 1.2540 after making a double top pattern around 1.2644. The recent bearish engulfing pattern on GBP/USD pair suggesting chances of selling in Sterling. On the lower side, the GBP/USD may find support around 1.2520. Below this, the GBP/USD prices have the potential to go after 1.2470. 

Overall, the trading bias of GBP/USD remains bullish, considering the 50 EMA and MACD, both of the indicators are supporting selling bias. Consider staying bullish above 1.2510 and bearish trades below 1.2638 level today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.169 after placing a high of 107.497 and a low of 106.404. Overall the movement of USD/JPY remained Bullish throughout the day. The USD/JPY pair posted gains on Thursday despite the weakness of the U.S. dollar across the board amid poor than expected economic data. Throughout the day, the USD/JPY pair moved back and forth but managed to post gains in the ending day of the month.

On Thursday, Federal Reserve announced to expand the scope of its main street lending in order to support the small and medium-sized businesses by giving them credit. The scheme would now provide the credit flow to the financially sound small & medium-sized companies which were in good condition before the pandemic.

Federal Reserve announced to allow finance to companies with up to 15,000 employees and $5 Billion in revenue, which was previously set for companies with up to10,000 employees and $2.5 Billion in revenue during the period of the pandemic, which affected the business activity across the United States.

At 17: 30 GMT, the closely watched Unemployment Claims for a previous week from the United States weighed on U.S. dollar when came in as 3839K against the expected 3500K. The Personal Spending for the month of March from the U.S. was declined by -7.5% against the expected decline by -4.8% and added in the weakness of the U.S. dollar.

Daily Support and Resistance    

• R3 108.76
• R2 108.14
• R1 107.66

Pivot Point 107.03

• S1 106.55
• S2 105.92
• S3 105.44

USD/JPY – Trading Tips

The USD/JPY pair take’s a bullish turn in the wake of risk-on sentiment to trade around 107.180. As we can see in the 4-hour chart above, the USD/JPY pair is struggling to cross over the downward trendline, which is extending resistance around 107.250. The 50 EMA is also keeping pressure on the pair around the same level of 107.250. Below this level, we may see a selling trend in the USD/JPY pair until the next target levels of 106.99 and 106.960. The 50 EMA and MACD are also suggesting selling bias for the USD/JPY pair. Taking a selling trade below 107.350 and buying above 107.030 can be a good idea today.

All the best for today! 

On the forex front, the ICE U.S. Dollar Index slipped 0.1% on the day to 99.96 on Tuesday, as investors awaited U.S. first-quarter GDP data and the Federal Reserve’s interest rates decision due later today. The U.S. Federal Reserve will announce its interest rate decision (hold at 0.00% – 0.25% expected). The European Commission will post the Eurozone’s April Economic Confidence Index (73.1 expected).

Moreover, the European Central Bank will report the Eurozone’s M3 money supply in March (+5.5% on-year expected).

Economic Events to Watch Today     

EUR/USD – Daily Analysis

Today in the early Asian session, the EUR/USD currency pair erasing yesterday’s losses and crossed above key support at 1.0809 while representing a 0.27% gains on the day mainly due to the broad-based U.S. dollar weakness in the wake of risk-on market sentiment. 

The better mood in the risk market supports the shared currency. At the time of writing, the EUR/USD currency pair is currently trading at 1.0847 and consolidates in the range between the 1.0818 – 1.0855. However, the traders are cautious about placing nay strong position ahead of the all-important Federal Reserve (Fed) rate decision. 

At the USD front, the dollar index’s (DXY) bounce from the 13-day low of 99.45 reached during Tuesday’s American trading hours, and it ran out of steam near 99.90 early on Wednesday. It’s mostly because both the S&P 500 futures and Asian stocks climbed, as in result greenback is losing its haven demand. 

The greenback dropped to multi-week lows against the JPY currency and faced notable declines against the Aussie dollar and the New Zealand dollar mainly due to the better sentiments in the risk market. However, the reason behind the renewed risk-on market sentiment could be the lack of negative updates related to coronavirus. The slight stability in the oil market also keeps the market calm.

Later today, the U.S. Federal Reserve will announce its interest rate decision (hold at 0.00% – 0.25% expected). The U.S. Commerce Department will post 1Q annualized GDP (-4.0% on quarter). The National Association of Realtors will publish pending home sales for March (-13.6% on month expected).

Daily Support and Resistance

• S1 1.0682
• S2 1.0761
• S3 1.0792

Pivot Point 1.084

• R1 1.087
• R2 1.0919
• R3 1.0998

EUR/USD– Trading Tips

The EUR/USD is trading bullish at 1.0868 as the U.S. dollar seems to face bearish pressure ahead of Fed fund rate decision. On the higher side, the EUR/USD has the potential to go after 1.0882, and bullish breakout of this level may drive EUR/USD prices further higher until the next resistance level of 1.0960. The overall trading bias continues to be bullish, especially after the bullish crossover of 50 EMA and MACD. Both of the leading indicators are supporting bullish trend with immediate support around 1.0814. We should consider taking buying trades above 1.0840 today. 

GBP/USD – Daily Analysis

During Wednesday’s Asian session, the GBP/USD currency pair flashing green and taking bids near the 1.2475 while representing 0.40% gains on the day mainly due to broad-based U.S. dollar fresh weakness in the wake of renewed risk-on sentiment in the market. The currency pair erased Tuesday’s losses, which were caused by doubt regarding the U.K. government’s coronavirus (COVID-19) figures. 

Currently, the GBP/USD is trading at 1.2475 and consolidates in the range between the 1.2423 – 1.2486. However, the pre-FOMC and US GDP sentiments are boosting the currency pair’s strength.

On Tuesday, the official death toll of 552 shows further flattening of the virus curve in the U.K., while the update from the Office of National Statistics (ONS) indicates that the actual death toll in England to April 17 was 54% higher than the government released data report.

On the other hand, the U.S. dollar hit the multi-week lows against the JPY currency and suffered notable declines against the Aussie dollar and the New Zealand dollar mainly due to lack of its demand ahead of FOMC and U.S. GDP. The Dollar index’s (DXY) climbed from the 13-day low of 99.45 reached during Tuesday’s American trading hours ran out of steam near 99.90 early Wednesday, as the S&P 500 futures and Asian stocks rose, as in result greenback is losing its haven demand.

At the Brexit front, the report came that the discussions between the European Union (E.U.) and the U.K. regarding new trade arrangements from next year continue to postponed mainly due to disagreements and the coronavirus crisis. Besides this, the U.K.’s international trade secretary Liz Truss said that the E.U. is expected to stick under pressure and agree to a post-Brexit trade deal with the U.K.

Daily Support and Resistance

• S1 1.2315
• S2 1.2371
• S3 1.24

Pivot Point 1.2427

• R1 1.2456
• R2 1.2483
• R3 1.2539

GBP/USD– Trading Tip

The GBP/USD is exhibiting bullish bias around 1.2449 area, as it’s maintaining a fresh trading range of 1.2525 – 1.2396. On the 4 hour chart, the cable has also formed a bullish channel, which is supporting it around 1.2396 along with resistance around 1.2501. On the higher side, a bullish breakout of 1.2520 opens up further room for buying until 1.2560 and 1.2626 level. 

The GBP/USD pair is holding a buying zone, above 50 EMA, which is also supporting the cable around 1.2409. Since the MACD is holding above 0, we should look for buying trades in the GBP/USD pair. Let’s look for buying trades above 1.2410 and bearish trades below 1.2520 level today. 

USD/JPY – Daily Analysis

During the Asian session, the USD/JPY currency pair extended its 6-day losing streak and dropped to 106.41 while representing 41% declines on the day mainly due to broad-based U.S. dollar weakness in the wake of the risk-on market sentiment. However, the currency pair failed to cheer Japanese yen weakness and dropped to 6-weeks low. As of writing, the USD/JPY currency pair is currently trading at 106.44 and consolidates in the range between the 106.39 – 106.89. 

Whereas, the safe-haven demand for the U.S. dollar continues to lose due to the better mood in the equity market as hopes of re-opening of the economies in Australia, New Zealand, and parts of Europe boosting the market sentiment. Moreover, the dismal U.S. C.B. Consumer Confidence data, as well as the hopes of sharp U.S. economic contraction, keeps the U.S. dollar under pressure.

The currency pair continues to follow the broad-based U.S. dollar directions so far this week, with the latest stop in the dollar decline offering some support. The U.S. dollar index trades at 99.70 after hitting a daily low of 99.63.

The reason behind the risk-on market sentiment could also be the upbeat comments from the BOJ Governor. The Bank of Japan (BOJ) Governor Haruhiko Kuroda said on Tuesday that Japan’s financial system remains firm because a whole as bank groups have satisfactory capital buffers.

Daily Support and Resistance    

• R3 108.1
• R2 107.72
• R1 107.3

Pivot Point 106.93

• S1 106.51
• S2 106.14
• S3 105.72

USD/JPY – Trading Tips

On the technical front, the USD/JPY was facing solid support around 107, the round figure, but it got violated over increased demand for safe-haven yen. At the moment, the USD/JPY is facing strong resistance around 107, along with support at 106.500, but this support seems weaker, and we may see USD/JPY prices falling further until 106.240 later today. Looking at the leading indicators on the 4-hour timeframe, we may see USD/JPY prices are holding below 50 periods EMA, and at the same time, the MACD is also holding into a negative zone. Let’s look for selling trades below 106.800 today. 

All the best for today! 

On the forex front, the U.S. Dollar Index eased 0.2% on the day to 99.72. On the economic data front, the Conference Board U.S. Leading Index dropped 6.7% on month in March (-7.2% expected). Today, the focus will be on the Eurozone’s economic events, which include the Trade balance, PPI, and current account, and these are due during the European session.

Economic Events to Watch Today     

EUR/USD – Daily Analysis

The EUR/USD gained 0.4% to 1.0878 and GBP/USD rebounded 0.3% to 1.2501. The markets are now concerned about extended lockdowns indicating a deeper economic recession than previously forecasted. Moving on, the market sentiment is expected to stay pro-risk during the day ahead. 

European stocks rebounded further, with the Stoxx Europe 600 Index gaining 2.6%. Germany’s DAX climbed 3.2%, the U.K.’s FTSE 100 increased by 2.8%, and France’s CAC jumped 3.4%.

The coronavirus outbreak has brought the deep divides among the member states on fiscal spending. Italy and Spain have blamed northern nations led by Germany and the Netherlands – of not doing enough.

Whereas Italy, Spain, France, and some other countries need debt mutualization through corona bonds, Germany and the Netherlands are still not buying the idea of community debt needed to control the economic fallout from the virus outbreak. 

Looking forward, as the data calendar is light with no first-tier releases scheduled for release in the Eurozone and the U.S. The traders keep their eyes on the coronavirus related updates for meaningful direction.

Daily Support and Resistance

• S1 1.0698
• S2 1.0779
• S3 1.0826

Pivot Point 1.0859

• R1 1.0907
• R2 1.094
• R3 1.1021

EUR/USD– Trading Tips

On Monday, the EUR/USD is trading sideways at 1.0835, exhibiting a bearish crossover below 50 EMA, which is now extending resistance around 1.0903 level. Continuation of a selling trend below 1.0903 level can extend selling until the next support area of 1.0772, but on the way, the pair may find support around 1.0815 level. The EUR/USD is likely to find support around 1.0772, but below this, the next support prevails around 1.0652 level. 

At this moment, the EUR/USD is holding at 1.0835, having an immediate resistance level of around 1.09230, where the bullish breakout of this level can extend buying until the next resistance level of 1.1036. Conversely, we should look for selling trades below 1.0870.

GBP/USD– Daily Analysis

The GBP/USD rebounded 0.3% to 1.2501 and consolidated in the range between the 1.2604 – 1.2450. However, the currency pair traders did not give any major attention to the coronavirus (COVID-19) crisis at home because the cases are comparatively more significant in the U.S. 

Moreover, the United Kingdom and European Union Brexit drama keep moving while the latest news recommending to keep a check of Britain’s £39 billion has also been underlined by the cost of dealing with coronavirus especially the economic £250 billion rescue package announced by Chancellor Rishi Sunak to protect jobs and businesses.

On the other hand, U.S. President Donald Trump showed some willingness for another relief plan while also supporting an economic re-open plan.

Looking forward, all traders will keep their eyes on the coronavirus headlines due to a light economic calendar. However, any surprise announcement of stimulus might grab the spotlight.

Daily Support and Resistance

• S1 1.2254
• S2 1.2365
• S3 1.2433

Pivot Point 1.2475

• R1 1.2544
• R2 1.2586
• R3 1.2697

GBP/USD– Trading Tip

The GBP/USD is trading with a neutral bias over 1.2420 support areas to trade around 1.2446. The GBP/USD pair is likely to find support around 1.2420, which is extended by the triple bottom level that we can see on the 4-hour timeframe. A bearish breakout of 1.2425 support area is expected to trigger a sell-off until 1.2210. The 50 periods EMA is also keeping the GBP/USD pair supported around 1.2430. Thus, the bounce off above this level can lead the GBP/USD pair towards the next resistance level of 1.2657. While bearish breakout of 1.2460 can open up further room for selling until the next support area of 1.2220. 

USD/JPY – Daily Analysis

The USD/JPY is flashing green and registered fresh gains near the 107.94, mainly due to the broad-based U.S. dollar strength in the wake of intensifying coronavirus fears, keeps the market tone heavy on the day. The slump in the Japanese exports for March keeps Japanese yen down, which also supports the currency pair to stay at the upside. The USD/JPY is trading at 107.84 and consolidates in the range between the 107.50 – 107.94.

At the USD front, the U.S. dollar continues to take bids mainly due to its safe-haven demand in the wake of intensified coronavirus fears. As per the latest report that the United States death toll rose above 40,000, whereas SkyNews mentions the U.K. has a bit over 16,000 people who died from the virus.

On the other hand, the reason behind the fresh risk-off market sentiment is the rise in the coronavirus (COVID-19) related death figures from the U.S. and the U.K. Whereas, the lack of clarity on the easing lockdown keeps the investors confused, as the new infections continue to rise globally.

Daily Support and Resistance    

• S1 105.92
• S2 106.84
• S3 107.44

Pivot Point 107.76

• R1 108.36
• R2 108.69
• R3 109.61

USD/JPY – Trading Tips

The technical side of the USD/JPY has not changed much as it’s price continues to hold above the triple bottom area of 107.039. The MACD and 50 periods of EMA are suggesting bearish bias. Therefore, a downward breakout of this level can extend selling until 105.300, while the resistance holds around 108.640. We should look for selling trades below 107 to target 106.630, and buying can be seen above the same 107.360 level today.  

All the best for today! 

On the forex front, the U.S. dollar strengthened against its major peers for a second straight session, with the ICE Dollar Index gaining 0.3% on the day to 99.93. Today, eyes will remain on the European Commission as it will post final readings of March CPI (+1.0% on-year expected). In the U.S., the Conference Board will release its Leading Index for March (-7.1% on month expected).

Economic Events to Watch Today     

EUR/USD – Daily Analysis

The EUR/USD fell 0.4% to a week-low of 1.0862. Official data reported that the Euro zone’s industrial production slipped 0.1% on month in February as expected). The European Commission will post final readings of March CPI (+1.0% on-year expected).

The official data which is scheduled to release at 09:00 GMT is expected to show that Eurozone’s industrial production decreased by 0.2% month-on-month in February. 

European stocks stabilized after a 3% loss in the prior session, with the Stoxx Europe 600 Index rising 0.6%. Germany’s DAX increased by 0.2%, the U.K.’s FTSE 100 climbed 0.6% while France’s CAC was little changed.

Markets are now concerned about extended lockdowns indicating a deeper economic recession than previously forecasted. Moving on, the market sentiment is expected to stay pro-risk during the day ahead. 

As in result, the EUR/USD currency pair could continue to gain altitude. At the data front, the Eurozone Consumer Price Index (CPI) is scheduled for release, while the U.S. data calendar is thin with just Baker Hughes US Oil Rig Count number expected to release at 17:00 GMT. 

Daily Support and Resistance  

• S1 1.0684
• S2 1.0772
• S3 1.0815

Pivot Point 1.086

• R1 1.0904
• R2 1.0949
• R3 1.1037

EUR/USD– Trading Tips

The EUR/USD is trading bearish at 1.0835, exhibiting a bearish crossover below 50 EMA, which is now extending resistance around 1.0903 level. Continuation of a selling trend below 1.0903 level can extend selling until the next support area of 1.0772. 

On Friday, the EUR/USD is likely to find support around 1.0772, but below this, the next support prevails around 1.0652 level. At this moment, the EUR/USD is holding at 1.0835, having an immediate resistance level of around 1.09230, where the bullish breakout of this level can extend buying until the next resistance level of 1.1036. Conversely, we should look for selling trades below 1.0870.

GBP/USD– Daily Analysis

GBP/USD dropped 0.8% to 1.2523 and consolidated in the range between the 1.2604 – 1.2450. However, the currency pair traders did not give any major attention to the coronavirus (COVID-19) crisis at home because the cases are comparatively more significant in the U.S. 

At the U.K. Crisis front, the United Kingdoms’ coronavirus death toll rose above 11,000. Still, the buyers are ignoring this probably because the death toll is comparatively larger in the U.S. almost 20,000 deaths have been registered so far. The GBP/USD is exhibiting selling bias in the wake of a stronger dollar. 

The U.S. official data showed that Initial Jobless Claims declined to 5.245 million for the week ended April 11 (5.500 million expected), and Housing Starts fell to an annualized rate of 1.216 million units in March (1.300 million units expected). Later today, the Conference Board U.S. Leading Index will be reported (-7.2% on month in March expected).

Later today, eyes will be on the U.S., the Conference Board will release its Leading Index for March (-7.1% on month expected) to determine further bias in the pair.

Daily Support and Resistance

• S1 1.2181
• S2 1.2353
• S3 1.244

Pivot Point 1.2525

• R1 1.2612
• R2 1.2697
• R3 1.2869

GBP/USD– Trading Tip

On Friday, GBP/USD is trading with a neutral bias over 1.2450 support areas to trade around 1.2486. The GBP/USD pair is likely to find support around 1.2450, which is extended by the triple top level, which got violated on the previous Friday.

On the 4-hour chart, the GBP/USD has formed a small bullish channel, which is likely to extend bullish bias for the pair. The 50 periods EMA is also keeping the GBP/USD pair supported around 1.2450. Thus, the bounce off above this level can lead the GBP/USD pair towards the next resistance level of 1.2657. While bearish breakout of 1.2460 can open up further room for selling until the next support area of 1.2220. 

USD/JPY – Daily Analysis

The USD/JPY pair is flashing red and struggling towards above 108.00 level, mainly due to the broad-based U.S. dollar weakness in the wake of risk-on market sentiment. In the meantime, the weaker safe-haven Japanese yen keeps the pair supportive and turned out to be one of the key data that placed a lid on any additional losses in the currency pair, at least for now. 

Currently, the USD/JPY pair is trading at 107.81 and consolidates in the range between the 107.64 – 108.08. At the USD front, the U.S. dollar continues to lose its buying momentum across the board, as the U.S. stocks futures and the Asian equities are flashing green mainly after the renewed hopes for coronavirus treatment. 

The greenback that tracks the greenback against a basket of other currencies dropped 0.25% to 99.862. It should be noted that the investors failed to prefer the greenback, which is traditionally viewed as a safe-haven, mainly because of the United States President Donald Trump’s step to reopening the economy, which could continue to add bullish pressure around the equities during the day ahead. 

Daily Support and Resistance    

• S1 105.92
• S2 106.84
• S3 107.44

Pivot Point 107.76

• R1 108.36
• R2 108.69
• R3 109.61

USD/JPY – Trading Tips

The technical side of the USD/JPY has not changed much as it’s price continues to hold above the triple bottom area of 107.039. The MACD and 50 periods of EMA are suggesting bearish bias. Therefore, a downward breakout of this level can extend selling until 105.300, while the resistance holds around 108.640. We should look for selling trades below 107 to target 106.630, and buying can be seen above the same 107.360 level today.  

All the best for today! 

On the forex front, the U.S. Dollar Index was seldom changed at 99.5 amid thin holiday trading. The economic calendar is muted a bit. The only focus today will be on the U.S. Labor Department, which will release March’s import price index (-3.2% on month expected). 

Later in the day, the U.S. Commerce Department will post March retail sales (-8.0% on month expected) and February business inventories (-0.4% on month expected). The New York Federal Reserve will publish April Empire Manufacturing Index (-35.0 expected). The Federal Reserve will release March industrial production (-4.0% on month expected), capacity utilization (74.0% expected), and its latest Beige Book.

Economic Events to Watch Today     

EUR/USD – Daily Analysis

The EUR/USD climbed 0.7% to 1.0987, French Finance Minister Bruno Le Maire said his government sees 2020 GDP contracting 8%, compared with a decline of 6% previously estimated.

The fresh uptick in the oil prices and above-forecast China trade data also helping restore the risk-sentiment. At the moment, the EUR/USD is trading at 1.0941 and consolidates in the range between the 1.0893 – 1.0967. At the coronavirus front, Australia has shown very sharp declines in the virus cases as compared to other countries and also registered declines in the death toll as per the latest report. 

On the other hand, the macro-environment also supported the EUR/USD, and so do technical charts, especially Tuesday’s marubozu candle, which is indicative of strong bullish sentiment. 

Looking forward, Spain and Italy are ready to release the report of inflation numbers for the month of March and will be essential to watch. Apart from this, the traders will also keep their eyes on U.S. Retail Sales and Industrial Production numbers for March. 


Daily Support and Resistance

• S1 1.0811
• S2 1.0887
• S3 1.0936

Pivot Point 1.0964

• R1 1.1012
• R2 1.104
• R3 1.1116

EUR/USD– Trading Tips

The EUR/USD prices fell after testing 1.09885 resistance level, and the pair now seems to reverse back to the long-held trading range of 1.0922 – 1.0765. The EUR/USD is likely to find support around 1.0922 level. At this moment, the EUR/USD is holding at 1.09320, having an immediate support level of around 1.09060, where the bearish breakout of this level can extend selling until the next support level of 1.0846 and 1.07990. Conversely, the resistance stays at 1.0970 and 1.1035. The MACD is tossing above and below 0, converting the bearish sentiment into bullish and vice versa. Let’s consider staying bullish over 1.0960 today. 

GBP/USD– Daily Analysis

The GBP/USD rose 0.9% to 1.2629. The GBP/USD is currently trading at 1.2508 and consolidates in the range between the 1.2604 – 1.2494. However, the currency pair traders did not give any major attention to the coronavirus (COVID-19) crisis at home because the cases are comparatively more significant in the U.S.

At the U.K. Crisis front, the United Kingdoms’ coronavirus death toll rose above 11,000, but the buyers are ignoring this probably because the death toll is comparatively larger in the U.S. almost 20,000 deaths have been registered so far.

The Brexit talks, which will be video conferencing between the European Union and the United Kingdom, are expected to happen and will likely entertain the cable traders as both sides have been stuck on the deadlines while the U.K. recently gave warning the bloc to change tactics or face serious ‘problems.

On the flip side, the headlines related to the expected British lockdown extension will likely keep the traders busy during the day ahead. Looking forward, the U.S. data, including the Retail Sales, activity numbers, and the Fed’s Beige Book, will be key to watch. The virus updates could keep the driver’s seat.


Daily Support and Resistance

• S1 1.2352
• S2 1.2475
• S3 1.255

Pivot Point 1.2599

• R1 1.2674
• R2 1.2723
• R3 1.2846

GBP/USD– Trading Tip

The GBP/USD is trading with a bearish bias over 1.2500 support areas to trade around 1.2516. The cable is likely to find support around 1.2490, which is extended by the triple top level, which got violated on Monday. As we can see on the 4-hour chart, the GBP/USD sideways channel has already been violated, and now it’s likely to keep the pair bullish outside this range of 1.2479 – 1.2185. 

Ahead of the U.S. retail sales, the U.S. dollar is gaining bullish momentum, driving the bearish trend in the GBP/USD pair. However, the overall bias remains bullish as the prices are holding above 50 periods EMA. Conversely, the MACD is crossing into the bearish zone, opposing the EMA signal. So let’s consider taking buying trades over 1.2472 with a target of 1.2560. 

USD/JPY – Daily Analysis

During Wednesday’s European session, the USD/JPY currency pair has succeded to recover almost 50 pips from the previous session lows and rose to a fresh session high near the 107.35 level in the last hour mainly due to the fresh upticks in the U.S. dollar. The USD/JPY is currently trading at 107.36 and consolidates in the range between the 106.94 – 107.46.

The pair for the second straight session on Wednesday showed some resilience below the 107.00 round-figure marks and attracted some dip-buying near monthly lows set on April 1.

Despite the latest positive news about decreasing the new coronavirus cases and deaths across the world, investors still worried about the economic fallout from the deadly coronavirus. This eventually supported the USD’s status as the global reserve currency and started some fresh selling around the major.

On the other hand, the risk-off market sentiment and declines in the global equity markets keep supporting the Japanese yen’s safe-haven status, which eventually keeps the currency pair limited.

Daily Support and Resistance    

• S1 105.75
• S2 106.52
• S3 106.84

Pivot Point 107.3

• • R1 107.62
  • R2 108.08
  • R3 108.85

USD/JPY – Trading Tips

The USD/JPY is trading with a bearish bias, and it is pretty much likely to find support around the triple bottom area of 107.039. A downward breakout of this level can extend selling until 105.300, while the resistance holds around 108.640. The MACD and 50 periods of EMA are suggesting bearish bias, while the fundamentals side is also in favor of selling. Since we the U.S. retail sales due during the U.S. session, traders will focus on the news to drive the next movement in the market. Hence, we should look for selling trades below 107 to target 106.630, and buying can be seen above the same 107 level today.  

All the best for today! 

On the forex front, the U.S. dollar stabilized against its major peers on Wednesday, as the ICE Dollar Index gained 0.2% on the day to 100.16. Eyes will remain on the German Federal Statistical Office, which is due to report February trade balance (16.5 billion euros surplus expected) and current account balance (17.0 billion euros surplus expected).

The U.K. Office for National Statistics will post February monthly GDP (+0.1% on month expected), industrial production (+0.1% on month expected), manufacturing production (+0.1% on month expected) and trade balance (1 billion pounds surplus expected).

Economic Events to Watch Today     

 EUR/USD – Daily Analysis

The EUR weakened against the U.S. dollar on reports that European Union finance ministers failed to agree on a coronavirus relief package. EUR/USD slid 0.3% to 1.0862.

German leading institutes expect the country’s GDP to slump 9.8% in the second quarter compared with the prior quarter and drop 4.2% for the whole year, citing the coronavirus pandemic. Meanwhile, the Bank of France sees the first-quarter GDP shrinking 6% from the previous quarter, the largest decline since World War II, amid nationwide lockdown due to the coronavirus outbreak.

Moving on, the shared currency may face deeper losses if a discussion about the stimulus package again fails to happen on the day or end on a sour note. It’s worth noting that the ECB is already running a negative interest rate policy and a massive asset purchase program. As a result, markets are increasingly expecting governments to do their bit by providing fiscal stimulus. 

Looking forward, the ECB minutes, which are scheduled to happen at 11:30 GMT, are expected to repeat downside risks to the economy and willingness to do more if required. On the data front, Germany is set to report trade figures for the month of February at 07:00 GMT. 

Daily Support and Resistance

• S1 1.0742
• S2 1.08
• S3 1.0829

Pivot Point 1.0858

• R1 1.0887
• R2 1.0917
• R3 1.0975

EUR/USD– Trading Tips

The EUR/USD continues trading within a symmetric triangle pattern, which is keeping the pair within 1.0922 – 1.0765 trading zone. At this moment, the EUR/USD is holding at 1.0866, having an immediate support level of around 1.0835, where the bearish breakout of this level can extend selling until the next support level of 1.07990 and 1.0765.

The MACD has still tossing above and below 0, converting the bearish sentiment into bullish. At the same time, the 50 periods exponential moving average is also keeping the EUR/USD in a neutral mode, extending an immediate resistance around 1.08856. So, let’s consider taking selling trades below 1.0835 to target 1.0775 and bullish above the same to target 1.0910 and 1.0970 today.

GBP/USD– Daily Analysis

The GBP/USD rebounded for a second straight session, gaining 0.4% to 1.2392. U.K. government spokesman James Slack said Prime Minister Boris Johnson is in a stable condition and responding to coronavirus treatment in hospital. 

Later today, U.K. monthly GDP data and manufacturing production for February will be released (both +0.1% on month expected). Whereas, the market risk sentiment getting heavy due to the rise in the U.S. cases, marked as a second highly infected nation, after Italy, in the world. 

As in result, early Asia risk-on sentiment, mainly due to U.S. President Donald Trump’s push for restarting the economy, failed to extend while the U.S. 10-year treasury yields dropped 2-basis points to 0.746% with stocks in Asia flashing mixed results.  

Looking ahead, the traders may not give any major attention to the U.K.’s data-dump comprising Manufacturing Production, Industrial Production, and monthly GDP due to being before the virus outbreak period. 

However, the weekly release of U.S. Jobless Claims and speech from the Federal Reserve Chairman Jerome Powell will be essential to watch. Apart from this, virus updates will not lose its importance and will be essential to watch for new directions.

Daily Support and Resistance

• S1 1.2104
• S2 1.2236
• S3 1.2315

Pivot Point 1.2368

• R1 1.2447
• R2 1.25
• R3 1.2632

GBP/USD– Trading Tip

On Thursday, the GBP/USD soars to trade around 1.2398 within a sideways channel. The channel is supporting the Cable at 1.220 and along with resistance around 1.2490. The release of GDP figures from the U.K. can help drive a breakout in the market. In the case market breaks bellow 1.2278, we may see GBP/USD prices heading into the selling zone until 1.2100 and 1.2005. 

Whereas, the chances of buying remains solid over 1.2275 until 1.2520. The MACD and 50 EMA are also supporting the neutral bias, so let’s consider taking buying trades over 1.2368 with a target of 1.2470 and sell trades below 1.2368  

USD/JPY – Daily Analysis

During Thursday’s Asian session, the USD/JPY currency pair flashing green and continued its previous session recovery rally toward above the 109.00 level. The currency pair rose from 108.60 to 109.06, mainly due to the recent risk reset market sentiment. 

Currently, the USD/JPY is currently trading at 108.94 and consolidates in the range between the 108.80 – 109.06. However, the Japanese yen earlier weakened caused by risk-on market sentiment in the wake of expectation of further stimulus and an easy run for the favorite candidate for the U.S. President’s post.

During the Newyork trading session, the attention was on the Federal Reserve Open Market Committee’s minutes of the unscheduled meeting on March 15. The minutes indicated anxiety about the virus and the extremely large degree of uncertainty. There was a muted reaction to the minutes because they didn’t show anything that hasn’t already been priced in by market traders. They just decided to cut the benchmark rate to nearly zero and restart bond-buying programs.

Moreover, Japan’s Prime Minister Abe has announced a state of emergency in Tokyo and 6-other provinces. He plans to control the economic fallout of COVID-19 as well as a substantial fiscal stimulus package. The package, worth ¥16.5trn, equates to 20% of GDP. Consequently, the USD/JPY currency pair is moving nowhere as investors seem confused about whether to buy USD/JPY over a stronger dollar or sell over the increased safe-haven appeal. 

As per the latest comments from the U.S. and Japanese policymakers also indicated that more stimulus to control the coronavirus (COVID-19) is on their way. On the flip side, Bernie Sanders turned from the U.S. Presidential Candidate’s race, giving an edge to the market favorite Joe Biden and helping to improve the trading sentiment.

Daily Support and Resistance    

• S1 107.84
• S2 108.34
• S3 108.59

Pivot Point 108.85

• R1 109.09
• R2 109.35
• R3 109.86

USD/JPY – Trading Tips

On Thursday, the USD/JPY’s symmetric triangle pattern continues to play due to a lack of high impact economic events. Choppy sessions continue to trade around 108.884, and it’s strictly following a narrow trading range of 108.650 – 107.250. The technical side of USD/JPY is mostly the same as the USD/JPY’s pair continues to find support around 108.700. On the 4 hour timeframe, the Japanese pair has closed a bullish engulfing candle over 50 EMA, which is suggesting odds of more buying in the USD/JPY currency pair. The USD/JPY may exhibit further room for buying until 109.680, and violation of this can open more room for buying until 110.500 and 111.450. On the lower side, support continues to hold around 108.750. Let’s look for buying traders over 108.850 today.  

All the best for today! 

Daily F.X. Analysis, April 08 – Top Trade Setups In Forex – Choppy Sessions Continued! 

On the forex front, the U.S. dollar weakened against its major peers, with the ICE Dollar Index dropping 0.8% on the day to 99.91. Later in the day, the U.S. Federal Reserve will release its latest monetary meeting minutes. Whereas, the Bank of France will report Industry Sentiment Indicator for March (90 expected).

Economic Events to Watch Today     

EUR/USD – Daily Analysis

The EUR/USD rebounded 0.9% to 1.0895, snapping a six-day decline. Official data showed that German industrial production grew 0.3% on month in February (-0.8% expected). Previously, an uptick in German’s industrial production for February may not provide support to the EUR/USD because the futures tied to the S&P 500 futures are starting to reporting a 0.60% drop and will likely draw bids for the greenback during the day ahead. 

The European stocks remained on the upside, with the Stoxx Europe 600 Index gaining 1.9%. Germany’s DAX jumped 2.8%, France’s CAC rose 2.1%, and the U.K.’s FTSE 100 was up 2.2%, which is extending slight support to the single currency Euro.

Today, the European data docket is light, so apart from this, Federal Reserve’s March meeting minutes will be key to watch, which are scheduled to release at 18:00 GMT. While on the technical side, the immediate bias would remain bearish in the pair until the hourly chart descending trendline drawn from overnight highs is intact. 

Daily Support and Resistance

• S1 1.0647
• S2 1.0762
• S3 1.0827

Pivot Point 1.0876

• R1 1.0941
• R2 1.0991
• R3 1.1106

EUR/USD– Trading Tips

Looking at the 4-hour timeframe, the EUR/USD is trading within a symmetric triangle pattern, which is keeping the pair within 1.0922 – 1.0765 trading zone. Right now, the pair is trading at 1.0858, having an immediate support level of around 1.07990 and 1.0765. The EUR/USD violated the support level of 1.085, which is now working as a resistance. A bearish breakout of 1.07990 level may extend selling bias until the next support level of 1.0650 while the MACD has crossed over 0, converting the bearish sentiment into bullish. 

We can’t fully really on the MACD right now as the lack of trends in the market is causing its value to toss above and below 0, signaling a neutral bias. But the 50 periods exponential moving average is also keeping the EUR/USD in a bearish mode, extending an immediate resistance around 1.08856. So, let’s consider taking selling trades below 1.091 to target 1.0775 and bullish above the same to target 1.0946 today.

GBP/USD– Daily Analysis

The GBP/USD bounced 0.9% to 1.2340. The pair doesn’t seem to show much interest as the death toll from the coronavirus increased by 621 to 4,934. The total number of confirmed infections rose to 47,806. Apart from the coronavirus intensifying concerns, the GBP currency could remain bearish in the European trading hours, mainly due to the sluggish data. As in result, the U.S. 10-year Treasury yields remain flashing green around 0.68% with major Asian stocks marking gains.

At the Brexit front, the European Union and many others are forcing the Tory administration for the delay in the Brexit deadline while Cabinet Office Minister Michael Gove showing a willingness to leave talks unless there was a broad outline of a deal.

At the USD front, the U.S. Dollar taking bids on the day, as the S&P 500 futures slumped by 0.5%, indicating the risk-off sentiment in the global market after New York reported 731 deaths from coronavirus on Monday- the biggest daily rise. On the other hand, Spain’s daily losses of coronavirus deaths also increased for the 1st-time in 5-days.

Looking forward, investors will keep their eyes on every incoming detail about the virus for fresh direction. Moreover, Brexit headlines will also key to watch as the EU-UK policymakers are finalizing the timetable for further Brexit talks in April and May.

Daily Support and Resistance

• S1 1.2075
• S2 1.2201
• S3 1.2269

Pivot Point 1.2327

• R1 1.2395
• R2 1.2453
• R3 1.2578

GBP/USD– Trading Tip

On Wednesday, the GBP/USD continues trading around 1.2298 within a symmetric triangle pattern, which is supporting Sterling at 1.220 and along with resistance around 1.2490. On the 4-hour timeframe, the GBP/USD pair may find resistance around 1.2470, along with support around 1.2278. In the case of market breaks bellow 1.2278, we may see GBP/USD prices heading into the selling zone until 1.2100 and 1.2005. Whereas, the chances of buying remains solid over 1.2275 until 1.2520. The MACD and 50 EMA are also supporting the neutral bias, so let’s consider taking buying trades over 1.2209 with a target of 1.2400 and sell trades below 1.2335. 

USD/JPY – Daily Analysis

During Wednesday’s early Asian session, the USD/JPY currency pair flashing green and struggles to cross above the 109.00 level mainly due to the latest recovery in the U.S. Dollar in the wake of the risk-off market sentiment. Whereas, the fresh bid in the safe-haven Japanse yen is one of the key factors behind the limit to the pair’s gains. 

Right now, the USD/JPY pair is trading at 108.81 and consolidates in the range between the 108.50 – 109.00. Yesterday’s risk-on sentiment extended to Europe due to the optimism that the pace of new COVID-19 cases may be slowing, but the U.S. markets were failed to hold. Despite this, the U.S. Secretary of Housing said there are signs that COVID-19 cases in the U.S. could level out sooner than predicted.

At the USD front, the U.S. Dollar taking bids on the day, as the S&P 500 futures slumped by 0.5%, indicating the risk-off sentiment in the global market after New York reported 731 deaths from coronavirus on Monday- the most prominent daily rise. On the other hand, Spain’s daily losses of coronavirus deaths also increased for the 1st-time in 5-days.

At the U.K. front, the Foreign Secretary looking confident about the UK PM Boris Johnson’s health and said that he would recover from pandemic while describing him as a “fighter.” Moreover, Japan’s Prime Minister Abe has announced a state of emergency in Tokyo and 6-other provinces. He plans to control the economic fallout of COVID-19 as well as a substantial fiscal stimulus package. The package, worth ¥16.5trn, equates to 20% of GDP. Consequently, the USD/JPY currency pair is moving nowhere as investors seem confused about whether to buy USD/JPY over a stronger dollar or sell over the increased safe-haven appeal. 

Daily Support and Resistance

• S1 105.37
• S2 106.64
• S3 107.08

Pivot Point 107.91

• R1 108.35
• R2 109.17
• R3 110.44

USD/JPY – Trading Tips

As we can see on the 4-hour timeframe, the USD/JPY’s symmetric triangle pattern still remains intact, perhaps due to a lack of high impact economic events in the market. The USD/JPY is trading choppy above and below 108.884, and it’s strictly following a narrow trading range of 108.650 – 107.250. With that being said, the USD/JPY’s immediate support is likely to be found around 108.700. On the 4 hour timeframe, the Japanese pair has closed a bullish engulfing candle over 50 EMA, which is suggesting odds of more buying in the USD/JPY currency pair. 

The USD/JPY may exhibit further room for buying until 109.680, and violation of this can open more room for buying until 110.500 and 111.450. On the lower side, support continues to hold around 108.750. Let’s look for buying traders over 108.850 today.  

All the best for today!