Daily F.X. Analysis, February 6 – Top Trade Setups In Forex -Risk-On Sentiment In Play! 

The U.S. trade deficit grew to 48.9 billion dollars in December (48.2 billion dollars deficit expected).

Later today, the Labor Department will report initial jobless claims for the week ended February 1 (a drop to 215,000 expected).

On China’s coronavirus outbreak, the number of confirmed cases has surged across 27,000, and the related death toll has topped 560. Hong Kong’s government announced plans to impose a mandatory 14-day quarantine on all people entering the city from mainland China

Economic Events to Watch Today 

 

 

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EUR/USD – Daily Analysis

The EUR/USD lost 0.4% to 1.0999. Official data revealed that the eurozone’s retail sales declined 1.6% on month in December (-1.1% expected). Later today, German December factory orders will be reported (+0.7% on month expected).

Its worth to mention that the Factory Orders may have recovered in December, as expected by economists. 

Therefore, the pair is currently flashing red and found near the 1.0995 and could hit the lowest level of October 8 at 1.0941 if the German data disappoints upbeat expectations. On the other side, the EUR currency put a strong bid if the German data release better-than-expected by a significant margin.

Looking forward, traders will keep their eyes on the German Factory Orders. Our focus will also point to the European Central Bank President, Lagarde, who is set to deliver her speech at 1:00 pm on the day. The traders will closely listen to Lagarde’s statement for clues about the fresh direction on the ECB policies.

Daily Support and Resistance

• S1 1.0905
• S2 1.0959
• S3 1.0979

Pivot Point 1.1014

• R1 1.1033
• R2 1.1068
• R3 1.1122

EUR/USD– Trading Tips

On Thursday, the EUR/USD continues to trade with a bearish bias bear 1.1000 psychological level. The bearish channel that we spoke about is still there, and it’s keeping the pair in a selling mode. 

At the moment, the EUR/USD pair is likely to face immediate support around 1.1020 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. 

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GBP/USD– Daily Analysis

The GBP/USD pared its gains in the prior session, retreating 0.3% to 1.2997. The currency pair did not get any support from the better-than-expected U.K. services PMI. Likewise, ISM Non-Manufacturing PMI and ADP Employment Change sent the U.S. dollar higher.

On the flip side, the market risk-sentiment is improving gradually despite the coronavirus cases increased time by time, mainly due to the equities of China, which gained support on better than expected economic events. 

Today, the U.K. economic calendar looking empty due to the lack of activities. Therefore, traders will keep their eyes on the Nonfarm Productivity and Average Labor Costs to determine the next movement in the market. 

Besides, the U.S. Jobless Claims and comments from the Federal Reserve Bank of Dallas President Robert Kaplan will be a pivotal event to watch today. The headlines regarding coronavirus and U.K. politics will keep the driver seats.

    

Daily Support and Resistance

• S1 1.2782
• S2 1.2896
• S3 1.2949

Pivot Point 1.301

• R1 1.3063
• R2 1.3123
• R3 1.3237

GBP/USD– Trading Tip

The GBP/USD broke below 1.3050 support is to test the next support level of 1.2965. It’s the most crucial level for the GBP/USD as a violation of this level can lead Sterling prices further down towards 1.2900 and 1.2830 in the coming week.  

At the moment, the GBP/USD has formed three black crows candles above 1.2960 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 gained 0.2% to 109.79, posting a three-day rally. The USD/JPY flashing green but still trading below the 110 level because traders await the U.S. Nonfarm Payrolls data at the end of the week for more evidence of a hotter economic performance. 

The USD/JPY is trading at 109.96, representing 0.16% gains on the day and consolidates in the range between the 109.72 – 109.97. The pair rose to 109.80 from the 109.30, mainly due to the report that Chinese researchers have produced a medicine that will use in treating the coronavirus.

It is worth to mention that the pair’s buyers continue to struggle to cross the 110 level. On the other hand, the U.S. bond yields rose during the trading day despite the recovery in the U.S. on Wall street. 

Whereas, the U.S. 10-year yields led global bonds, putting on +6bps to test 1.66% (1.58% to 1.64% after the news came that Chinese researchers had developed a drug that was useful in treating the coronavirus).

    

Daily Support and Resistance

• S1 108.57
• S2 109.12
• S3 109.47

Pivot Point 109.66

• R1 110.02
• R2 110.2
• R3 110.75

USD/JPY – Trading Tips

On Thursday, the USD/JPY pair is trading 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!