Daily F.X. Analysis, February 11 – Top Trade Setups In Forex – Central Bank Speeches Ahead! 

On Tuesday, the U.S. Labor Department will post JOLTS job openings for December (6.85M expected). The National Federation of Independent Business (NFIB) will release January Small Business Optimism Index (103.3 expected).

The U.S. government bond prices were steady as the benchmark 10-year Treasury yield edged down to 1.574% from 1.578% last Friday.

Economic Events to Watch Today 

 

 

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EUR/USD – Daily Analysis

The EUR/USD lost 0.4% to 1.0911. The eurozone’s Sentix Investor Confidence Index fell to 5.7 in February (5.9 expected) from 7.6 in January.

If Federal Reserve Chairman Jerome Powell ignores the impact of coronavirus, then the greenback may put strong bids mainly due to fewer chances of the rate cut. As in result, the EUR/USD currency pair drop further below the 1.079. 

The U.S. dollar continued its fresh rally versus the European counterpart and moved the EUR/USD pair to new 2020 lows on the first day of a new trading week. Despite a positive sentiment encompassing equity markets, concerns about the spread of the fatal coronavirus continued helping the greenback’s perceived safe-haven status and continued exerting pressure on the major.

Besides this, the currency pair will likely take clues from the Europan Central Bank head Christine Lagarde’s presentation at the European Parliament in Strasbourg at 2 pm. 

    

Daily Support and Resistance

• S1 1.0874
• S2 1.0916
• S3 1.0931

Pivot Point 1.0957

• R1 1.0972
• R2 1.0998
• R3 1.104

EUR/USD– Trading Tips

The EUR/USD collapsed beneath the horizontal support level of 1.0995, which is now working as a support level for the EUR/USD pair. Closing of candles below this 1.099 is confirming a breakout and demonstrates that this level is currently working as a resistance. It may keep the Euro bearish until 1.09374. 

On the 4 hour timeframe, the pair’s MACD is closing histograms under 0, demonstrating chances of further selling in the pair while the bearish channel is also likely to get violated until and unless Nonfarm payroll comes out better than expected. 

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GBP/USD– Daily Analysis

The GBP/USD rebounded 0.2% to 1.2915, snapping a three-day losing streak. Later today, U.K. fourth-quarter GDP growth will be released (+0.8% on-year expected).

The U.K.’s data dump for December, including Trade Balance, Industrial Production and Manufacturing Production, will be the key to watch respecting the latest upbeat British data pushing BOE off from its bearish bias. However, the key will be the preliminary prints of the 4th-quarter (Q4) Gross Domestic Product (GDP). 

The growth measure is expected to decrease to 0.8% YoY from 1.1% earlier, while the QoQ GDP will shrink to 0.0% from 0.4% earlier. Moreover, the BOE’s Governor Mark Carney will also speak at the U.K. parliament and might reiterate his dislike for the Brexit. At Powell’s speech front, the Federal Reserve (Fed) chief Jay Powell will testify before Congress on Tuesday (15:00 GMT) and Wednesday. 

Whereas, the market’s traders are expecting dovish tone from the Powell mainly due to global economic slowdown in the wake of coronavirus outbreak. On the other hand, if Federal Reserve Chairman Jerome Powell ignores the impact of coronavirus, then the greenback may put strong bids mainly due to fewer chances of the rate cut.

Daily Support and Resistance

• S1 1.2753
• S2 1.2831
• S3 1.2858

Pivot Point 1.2909

• R1 1.2936
• R2 1.2987
• R3 1.3065

GBP/USD– Trading Tip

The GBP/USD broke below 1.2950 support is to test the next support level of 1.2925. It’s the most crucial level for the GBP/USD as a violation of this level can lead Sterling prices further down towards 1.2870 and 1.2830 in the coming week.  

At the moment, the GBP/USD has neutral candles below 1.2920 support level, which is suggesting a bearish trend in the GBP/USD. The MACD and RSI are holding in the bearish zone, supporting selling bias for the GBP/USD pair. 

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USD/JPY – Daily Analysis

The USD/JPY currency pair is flashing green but still below the 110 handles; the currency pair is still struggling to hit the 110 level ahead of major events. The USD/JPY currency pair is currently trading at 109.90 and consolidates in the range between 109.74 – 109.95. 

The currency pair is getting support from the improving risk-tone after China’s liquidity support and the positive report of coronavirus vaccination. Besides, the fresh developments of the virus, the focus also shifts on the U.S. yields and the Federal Reserve this week. The U.S. 2-year treasury yields fell from 1.41% to 1.38%, while the 10-year yields moved from 1.59% to 1.55%. 

The markets have been pricing in a 10% chance of a rate cut at the next Fed decision on March 18, and a terminal rate of 1.12% (vs. Fed’s mid-rate at 1.63% currently). While stock markets remain solid, with the U.S. benchmarks rising to new highs, there is an underbelly of dissatisfaction in the bond markets, which may be a warning that investors are still complacent.

Although, the risk-tone recovers mainly due to China’s liquidity support and the report came that the experts in Shanghai recently have isolated strains of the novel coronavirus, which will raise the development of vaccine and medicine against the virus. 

Daily Support and Resistance

• S1 108.57
• S2 109.11
• S3 109.47

Pivot Point 109.66

• R1 110.01
• R2 110.2
• R3 110.75

USD/JPY – Trading Tips

On Tuesday, the USD/JPY pair is consolidating with a bullish bias in the wake of weakening Japanese yen. The pair has crossed over 109.300 resistance level, and it seems to head towards 109.850. On Wednesday, the USD/JPY is likely to find resistance around 110.300 after violating 109.850. While support remains at 109.250. The RSI and MACD have crossed over in the buying zone and are supporting the bullish bias. Let’s look for buying trades above 109.26 today.

All the best for today!