Daily F.X. Analysis, April 09 – Top Trade Setups In Forex – Brace for High Impact Events! 

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!