Daily F.X. Analysis, April 27 – Top Trade Setups In Forex – COVID19 Continues to Play! 

On the forex front, the U.S. dollar eased against other major currencies, with the Dollar Index slipping 0.2% on the day to 100.29. In the U.S., the Federal Reserve Bank of Dallas will release its Manufacturing Activity Index for April (-75.0 expected).

Economic Events to Watch Today     

 

 

EUR/USD – Daily Analysis

The EUR/USD currency pair continues to taking bids and rose above 1.0840 regions, mainly due to the positive German virus stats report. The broad-based U.S. dollar draw offers and reporting losses on the day in the wake of risk-on market sentiment, which eventually supports the currency pair. 

The bullish trend in the currency pair could be short-lived because the European leaders failed to agree on a comprehensive coronavirus stimulus package last week. The EUR/USD pair is currently trading at 1.0841 and consolidates in the range between the 1.0812 – 1.0843.

On the other hand, the German Chancellor Merkel showed some willingness to offer almost EUR 1 trillion as financial support for a coronavirus recovery package. The leaders failed to reach an agreement on the size of the fund, and it should share the burden of financing with those countries that run fiscal and trade surpluses.

As per the German disease and epidemic control center, Robert Koch Institute (RKI) showed the number of confirmed coronavirus cases increased to 155,193, with a total of 5,750 deaths registered so far. Moreover, the institute surveyed that a total of 114,500 people has recovered from the virus. 

Daily Support and Resistance

• R3 1.0847
• R2 1.0836
• R1 1.0829

Pivot Point 1.0819

• S1 1.0812
• S2 1.0802
• S3 1.0795

EUR/USD– Trading Tips

The EUR/USD pair continues trading in a buying mode around 1.0858, despite weaker manufacturing and services PMI figures from the Eurozone. The overall trading bias continues to be bearish as the EUR/USD prices are holding below 50 EMA, which is extending resistance around 1.08500 level. On the 4-hour chart, the EUR/USD is likely to find resistance below the symmetric triangle pattern, which may drive the selling bias in the pair. Currently, it’s holding the pair over 1.08580, which is the triple yop level. Above this, a slight bullish recovery can be seen until 1.0889 level. While bearish breakout of 1.0765 level can drive selling until 1.0649 level today, let’s look for selling trades below 1.0770 level today.  

GBP/USD – Daily Analysis

The GBP/USD currency pair succeeded in extending its 4th consecutive day winning streak and rose above mid-1.2400 while representing 0.60% gains on the day mainly due to the broad-based U.S. dollar weakness in the wake of better mood in the market. Apart from this, the on-going criticism about the U.K.’s handling of the coronavirus (COVID-19) crisis and Tory government’s stand on Brexit keeps the currency pair’s gain limited for the time being. A

The GBP/USD pair is currently training at 1.2452 and consolidates in the range between the 1.2360 – 1.2455. However, the UK PM Boris Johnson came back from the pandemic infection, which satisfied the buyers. The Uk PM Boris Johnson will likely take its seat back from the acting chief Dominic Raab after getting permission from the doctors at the Chequers. Although, Boris Johnson said that he is looking forward to going to Downing Street on Monday.

The U.k. PM Boris Johnson was absent since early April due to the coronavirus decease. Whereas, the UK Tory government getting an inadequate response from the entire nation about the handling of the coronavirus (COVID-19) crisis despite the hard efforts from the Chancellor Rishi Sunak and Health Secretary Matt Hancock, and the Deputy PM Dominic Raab.

Although, the shortage of medical supplies and the surge in the death toll have forced the United Nations (U.N.) poverty expert Philip Alston to attack the U.K.’s coronavirus response as “utterly hypocritical.

Moreover, the Health Secretary’s optimistic target of 100,000 tests a day got a surprise on Saturday after the government needed to avail the military helps to overcome the 29,000 marks.

Daily Support and Resistance

• R3 1.2379
• R2 1.2375
• R1 1.2371

  Pivot Point 1.2367

• S1 1.2363
• S2 1.2359
• S3 1.2356

GBP/USD– Trading Tip

The GBP/USD showed a slight bullish reversal to place a high around 1.2434, although the bullish trend wasn’t long enough as prices recorded soon. At the moment, the Cable is trading at 1.2437 area, after violating the resistance level of 1.2420 level and now this level is working as a support. A bullish breakout of 1.2368 level can extend the buying trend until 1.2420 level today. Elsewhere, the support continues to hold around 1.2258 level. The 50 EMA and MACD are both are suggesting selling bias in the Cable. So let’s look for selling trades below 1.2399 and bullish above 1.2420 level today. 

USD/JPY – Daily Analysis

The USD/JPY is consolidating in a tight trading range of 107.675 level to 106.950 level, mainly due to the risk-on market sentiment keeps the safe-haven Japanse lower and providing support to the currency pair. The U.S. announced 4.427 million initial jobless claims for the preceding week overnight, with an unparalleled 26 million people dropping their jobs since late March.

At the USD front, the U.S. dollar took bids due to mixed risk sentiment, which is starting to dominate the markets and caused the bearish pressure to remain intact. The U.S. Dollar Index, which dropped below the 100 marks earlier in the day, is up 0.12% on the day at 100.47 and stays on track to close the 4th-straight day in the positive area.

The latest pullback of the U.S. dollar kept a lid on bullish moves in the pair. Currently, the USD/JPY is trading at 107.27 and consolidates in the range between the 106.98 – 107.86. However, investors are cautious and waiting for a fresh catalyst before placing any position.

Whereas, the multiple diverging factors failed to provide any meaningful direction or assist the pair in breaking through a narrow trading band held since the beginning of this week. The reason behind the risk-on market sentiment is the report regarding the passage of another $484 billion U.S. economic support package by the U.S. Senate. 

While the latest modest recovery in crude oil prices also keeps the market sentiment calm. Looking ahead, the eyes will remain on the Core Durable Goods Orders m/mas that’s due during the U.S. session in order to forecast further trends in the USD related pairs. 

Daily Support and Resistance    

• R3 107.84
• R2 107.73
• R1 107.62

Pivot Point 107.51

• S1 107.4
• S2 107.29
• S3 107.17

USD/JPY – Trading Tips

The USD/JPY is mostly trading bearish within a narrow trading range of 107.720 – 107 zones. At the moment, the USD/JPY is holding at 107.197, and the triangle pattern that is formed during the previous week still lasts.  

The triangle pattern is prolonging resistance around 107.550, along with support around 106.980. If USD/JPY manages to violate the descending triangle pattern, we may see pair dropping towards 106.200. While on the upper side, a bullish breakout of 108 can lead USD/JPY prices towards 109.100. The leading indicator, such as MACD and 50 EMA, are supporting bearish bias in the market today. 

All the best for today!