The current week is anticipated to display a slow start with U.S. banks on holiday and light economic data. U.K. jobs data will be reported on Tuesday, and the Fed will publish minutes from their last conference on Wednesday.
The market awaits U.S. economic events, which are expected to drive some price action during the U.S. session today. The U.S. Commerce Department will report January retail sales (+0.3% on month expected) and December business inventories (+0.1% expected).
The Labor Department will post the January import price index (-0.2% expected). The Federal Reserve will release January industrial production (-0.2% expected) and capacity utilization (76.8% expected). The University of Michigan will report its Consumer Sentiment Index for February (99.4 expected).
Economic Events to Watch Today
EUR/USD – Daily Analysis
The EUR/USD placed a second consecutive weekly loss and dropped to levels not witnessed since April 2017 during the previous week. The euro was the most vulnerable amongst the majors, and deviation is seen in the dollar index (DXY).
Typically, the greenback and the EUR/USD shares a sharp inverse relationship. Last week, though, the greenback held beneath highs posted in September while the currency pair split to a notable low, which could be indicating a slowing of momentum in the greenback dollar.
On Monday, the U.S. banks observance a holiday in the wake of President’sPresident’s day, and the economic calendar also remains light, which is why the current week is expected to have a quiet start. Volatility is expected to soar later in the week as the Fed publishes minutes from their latest meeting on Wednesday. On Friday, the PMI figures from Europe will be released and will help drive the movement in the market.
Coronavirus concerns in the markets have sunk a great deal, and the S&P 500 placed a second back-to-back weekly gain to settle at a fresh record high. The German DAX supported the bullish momentum in the global stock markets and closed at a record high for the first time in 2 years.
Daily Support and Resistance
- S1 1.0767
- S2 1.0828
- S3 1.0851
Pivot Point 1.0888
- R1 1.0911
- R2 1.0949
- R3 1.1009
EUR/USD– Trading Tips
The EUR/USD dropped to trade around 1.0841 support level, and it appears to form a Doji candle today, perhaps due to a lack of trading volume and liquidity. Today’s candle is slightly bullish, and it is pretty much likely to form a bullish engulfing pattern or a tweezers top pattern to drive bullish reversal in the pair.
Today, if the EUR/USD pair manages to drop below 1.0840, we may see EUR/USD prices going towards 1.0760. Let’sLet’s look for buying trade today above 1.0840.
GBP/USD– Daily Analysis
The GBP/USD traded slightly bullish last week after examining its 100-day moving average. The GBP/USD pair has made a remarkable recovery, although the bearish momentum from earlier in the month reaches to prevent further bullish bias.
The greenback, while posting a second back-to-back weekly rise, has exhibited signs of instability. During the previous week, the dollar weakened against the Sterling, which might be contributing an early sign for a pullback.
The current week is anticipated to display a slow start with U.S. banks on holiday and light economic data. U.K. jobs data will be reported on Tuesday, and the Fed will publish minutes from their last conference on Wednesday. Besides, the inflation figures coming from Britain will be posted on Wednesday. The CPI is anticipated to climb by 1.7% in the year to January versus growth of 1.3% in the previous reading.
The risk-tone stays sluggish with stocks in China contradicting those of India and Japan due to hopes of further monetary/fiscal measures to counter coronavirus risk. Looking forward, the U.S. markets are closed due to the President’sPresident’s Day Holiday, and therefore, fewer moves are expected to take place during the day ahead. However, the traders will keep thor eyes on the coronavirus/Brexit headlines.
Daily Support and Resistance
- S1 1.2888
- S2 1.2928
- S3 1.2944
Pivot Point 1.2968
- R1 1.2984
- R2 1.3008
- R3 1.3047
GBP/USD– Trading Tip
On Monday, the GBP/USD continues to trade sideways, holding below 1.3065 resistance market. The GBP/USD pair holds above 1.3000, which is the most crucial level, and the violation of this level can lead to GBP prices further lower towards 1.2965 and 1.2925. The MACD and RSI are holding in the buying zone, supporting bullish bias for the GBP/USD pair. Let’s look for bullish trades above 1.3000 and bearish below the same level today as the President Day holiday is likely to keep the market less volatile.
USD/JPY – Daily Analysis
The USD/JPY currency pair flashing red and dropped to 109.75 despite the release of downbeat Japan’ Japan’ preliminary 4th-quarter (Q4) GDP data earlier today. The USD/JPY is currently trading at 109.81 and consolidates in the range between the 109.72 – 109.86. The traders are keeping their focus on qualitative catalysts.
On the forecasted view, Japan’s economic growth decreased and came out well below 0.9% figure to 1.6%, whereas the annual figures also disappoint with -6.3% against -3.7% expected.
The 1st economic recession after the 4th-consecutive quarter of growth pushes the policymakers of the Bank of Japan to take steps and understand how to secure the economy ahead. Whereas, the recent data regarding spending and activity figures were soft, while the traders should not ignore the International Monetary Fund’s (IMF) suggestion for taking fresh directions.
The Bank of Japan struggles to decrease the strength of the Japanese Yen, the safe-haven currency getting benefits from the risk-off market sentiment in the wake of China’s coronavirus, and Brexit fears. These two factors are the biggest reason behind the pair bearish sentiment.
At the coronavirus front, the Chinese officials have struggled too much to improve the risk-sentiment, which is severely disturbed by the fears of the coronavirus. The market showed a slight improvement in the risk-tone. However, the broad sentiment and the numbers have unchanged so far, so, the USD/JPY currency pair still trading on the bearish track.
Daily Support and Resistance
- S1 109.42
- S2 109.6
- S3 109.69
Pivot Point 109.79
- R1 109.87
- R2 109.97
- R3 110.15
USD/JPY – Trading Tips
The USD/JPY pair is trading 110.025 – 109.500 due to a lack of economic events as the U.S. banks are closed in the observance of Presidents Day. At the moment, the USD/JPY pair is holding below 110 resistance as it failed to violate the horizontal resistance level of 110.025.
In case, the USD/JPY manages to break above 110.025 level; we may see USD/JPY prices going towards 110.350 at first and then towards 110.850. Alternatively, the USD/JPY can drop to 109.300 in case of failure to break above 110.025.
All the best for today!
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