Home Forex Forex Market Analysis Daily F.X. Analysis, February 04 – Top Trade Setups In Forex -U.S....

Daily F.X. Analysis, February 04 – Top Trade Setups In Forex -U.S. Factory Orders! 

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Hong Kong, the government has closed more border checkpoints connected to China, while the city’s medical workers continued a strike demanding the closing of all such checkpoints.

Regarding U.S. economic data, the Markit U.S. Manufacturing Purchasing Managers Index (final reading) rose to 51.9 in January, above 51.7 expected. The Institute for Supply Management’s Manufacturing PMI increased to 50.9 in January, beating 48.5 expected. Monthly construction spending fell 0.2% on month in December, missing expectations of +0.5%.

Later today, the U.S. Commerce Department will report December factory orders (+1.2% on month expected), and durable goods orders (final reading, +2.4% expected).

Economic Events to Watch Today

 


EUR/USD – Daily Analysis

The EUR/USD climbed higher late last week but has grappled with continuing the skyward trend in the early week. The revival in the EUR/USD that took place lately may have been the effect of trades squaring before the month-end.

The single currency euro is sensitive to changes in risk sentiment as it is usually employed as a funding currency. Nevertheless, it is less sensitive when we compare it with the Japanese yen and Swiss franc, which are generally known as safe-haven currencies.

Considering the idea of risk appetite, both the RBA (Reserve bank of Australia) and the BOJ (Bank of Japan) kept the rates steady today. Some traders may have assumed a little more of a dovish stance from policymakers after the increase in the Coronavirus break during the previous week.

Regarding U.S. economic data, the Markit U.S. Manufacturing Purchasing Managers Index (final reading) rose to 51.9 in January, above 51.7 expected. The Institute for Supply Management’s Manufacturing PMI increased to 50.9 in January, beating 48.5 expected. Monthly construction spending fell 0.2% on month in December, missing expectations of +0.5%.

Daily Support and Resistance

  • S3 1.091
  • S2 1.099
  • S1 1.1043

Pivot Point 1.107

  • R1 1.1123
  • R2 1.115
  • R3 1.123

EUR/USD– Trading Tips

The EUR/USD is trading in a narrow trading range of 1.1100 – 1.1040 area, as it continues to maintain the downward channel. Right now, the pair is likely to face immediate support around 1.1040 level, and violation of this can lead the EUR/USD prices towards 1.0925. 

The EUR/USD pair as already retrace back 1.1098, and it has the potential to show further selling bias. On the lower side, a breakout of the support level of 1.0990 can lead EUR/USD prices towards the 1.0945 area. 


GBP/USD– Daily Analysis

The GBP/USD plunged from 1.5% to 1.2997. U.K. Prime Minister Boris Johnson rejected Europe Union chief negotiator Michel Barnier’s demand to respecting the bloc’s regulations under a trade deal. On the other hand, the Markit Construction PMI for January will be released later today (47.1 expected).

The latest risk recovery came possibly due to the Chinese officials’ that struggle to satisfy the traders and halt short-selling in the stock market. While Asian equities and the U.S. 10-year treasury yield recovers from Monday’s fall. Nevertheless, the increasing losses of coronavirus contagion keep the risk on the cards.

The total death losses have increased to 425, and the number of confirmed cases has risen to more than 20,000 due to coronavirus.

Looking forward, the final figures of the U.K. Construction PMI, which is expected to be 46.6 against 44.4, will be the key economic figure to watch on Tuesday. While markets are expecting no significant surprises in data, risk catalysts may lead to near-term GBP/USD pair movements.

Daily Support and Resistance

  • S3 1.2679
  • S2 1.2864
  • S1 1.293

Pivot Point 1.3049

  • R1 1.3114
  • R2 1.3234
  • R3 1.3418

GBP/USD– Trading Tip

The GBP/USD is consolidating in a narrow trading range of 1.3220 to 1.2980. Earlier today, the GBP/USD pair tried to break below 1.2985 support level, but it failed to continue its bearish momentum. 

Right now, 1.3220 is supporting the pair, and it’s very much likely to drive the bullish trend in the GBP/USD until the breakout occurs. Whereas, the bearish breakout of this level can extend selling until 1.2945 today. 

Let’s look for sell trades only below 1.2980 level and buying above the same today. 


USD/JPY – Daily Analysis

The USD/JPY currency pair found on the bullish track and rose to 108.78, mainly due to an uptick in the Asian stocks, but the pair is still trading below the 100-day Moving Average. The USD/JPY currency pair is currently consolidating at 108.75 and consolidates in the range between the 108.55 – 108.78. Notably, the pair has hit a low level of 108.55 an hour ago.

The reason behind the bullish sentiment in the pair could be the uptick in the S&P 500 futures and the Asian equity markets. China’s Shanghai Composite Index is scoring 0.65% at press time. 

On the front of the latest reports, the total death losses have increased to 425, and the number of confirmed cases has risen to more than 20,000 due to coronavirus.

It is worth to mention that Moody’s Investors Service responded on the increasing risks to chinas credit rating in the wake of the coronavirus outbreak. Whereas, the global rating giant announced expected drops in the consumption and its credit implications as the main catalysts.

Daily Support and Resistance

  • S3 107.87
  • S2 108.25
  • S1 108.47

Pivot Point 108.64

  • R1 108.85
  • R2 109.02
  • R3 109.4

USD/JPY – Trading Tips

On Tuesday, the USD/JPY pair is trading with slightly bullish bias after testing the support level around 108.500. The USD/JPY is maintaining the upward channel, which is keeping the safe-haven currency bullish. 

On Tuesday, the USD/JPY is likely to find resistance around 109.250, which is the same level that provided support to the USD/JPY earlier. We can see selling below this level until 108.520. 

Furthermore, the RSI and MACD have crossed over in the buying zone and are supporting the bullish bias. Let’s look for buying trades above 108.950 today.

All the best for today! 

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