Forex Market Analysis

Daily F.X. Analysis, July 03 – Top Trade Setups In Forex – U.S. Independence Day! 

A day before, the highly noticed Non-Farm Employment Change from the United States was increased to 4.8M from the expected 3.037M and supported the U.S. dollar. The Unemployment rate from the U.S. in June dropped to 11.1% from the 12.4% forecasted and helped the U.S. dollar. The news side is a bit muted today, and we may see no major even as the U.S. Banks will be closed in the observance of U.S. independence day.

Economic Events to Watch Today 




EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.12393 after placing a high of 1.13025 and a low of 1.12232. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD pair in its early trading session rose to nearly six days high on the back of increased risk appetite in the market. The increased number of jobs created from the United States in June improved market risk sentiment, which raised riskier currency pair EUR/USD pair. However, the pair failed to extend its gains and started moving in the reverse direction after the release of NFP data from the United States.

The EUR/USD currency pair remained well-supportive ahead NFP data from the U.S. due to increased hopes of renewed jobs that increased risk sentiment. After a better than expected rise in job data, the traders started following the results, which were in favor of the U.S. dollar, and the EUR/USD pair came under pressure.

The investors’ appetite was already up after the global economies’ positive data indicated faster recovery after a sharp earlier contraction. However, the second wave of coronavirus continued its fever around the market and kept a lid on investors’ appetite, which reversed the pair’s bullish trend on Thursday.

Meanwhile, the earlier gains of EUR/USD could also be attributed to the attractiveness of shared currency Euro that was under spot after the gradual reopening of the European economy despite the second wave of coronavirus. The persistent monetary stimulus from the European Central Bank and effective control of the virus spread added strength in Euro.

On data front at 12:00 GMT, the Spanish Unemployment Change in June came in as 5.1K against the forecasted -113.0K and weighed on Euro. At 13:00 GMT, the Italian Monthly Unemployment Rate was dropped to 7.8% from the forecasted 7.9% and supported Euro.

At 14:00 GMT, the Producer Price Index from the whole bloc was dropped to -0.6% in May from the expected -0.4% and weighed on Euro. The Unemployment Rate from Eurozone for May was declined to 7.4% against the expected 7.6% and supported Euro.

The Eurozone’s mixed data failed to provide any specific move to the EUR/USD pair on Thursday so, traders continued to follow the U.S. dollar signals for fresh impetus.

On the other hand, from America, the highly noticed Non-Farm Employment Change from the United States was increased to 4.8M from the expected 3.037M and supported the U.S. dollar. The Unemployment rate from the U.S. in June dropped to 11.1% from the 12.4% forecasted and helped the U.S. dollar. The U.S. dollar strength dragged the rising currency pair EUR/USD in the late session, and hence EUR/USD pair ended its day with a bearish candle.

Daily Support and Resistance

  • R3 1.138
  • R2 1.1328
  • R1 1.1289

Pivot Point 1.1237

  • S1 1.1198
  • S2 1.1146
  • S3 1.1108

EUR/USD– Trading Tip

The EUR/USD is trading in a tight range of 1.1243 – 1.1193, limiting the price action for now. On the lower side, the EUR/USD pair can drop towards 1.1145 level upon the bearish breakout of 1.1193 level, while the bullish breakout of 1.1243 level will allow us to go long. On Friday, the pair may show slow movement in the wake of the U.S. bank holiday. Anyhow, we should look for selling below 1.1295 and buying above 1.1193 level. 

GBP/USD – Daily Analysis

 The GBP/USD pair was closed at 1.24679 after placing a high of 1.25297 and a low of 1.24559. Overall the movement of GBP/USD pair remained flat but slightly bearish throughout the day. The GBP/USD pair extended its previous daily gains and rose near a one-week top on Thursday in early trading hours amid increasing risk sentiment and selling bias around the U.S. dollar.

The increased risk sentiment resulted in the positive momentum around GBP/USD pair after a potential COVID-19 vaccine by the joint efforts from German biotech firm BioNTech and U.S. pharmaceutical giant Pfizer, which gave positive results in its phase1 and phase 2 trials. This, in turn, undermined the demand for safe-haven U.S. dollar and raised GBP/USD pair towards a one-week high level.

The global risk sentiment was further supported by the U.S. monthly jobs report of Non-Farm Payroll. The positive data showed that the coronaviruses worst was probably over, and the hopes for sharp V-shaped recovery again came on board. The intraday profit-taking in GBP/USD was prompted after the risk –on market flow took its pace in the presence of persistent Brexit uncertainties.

In the latest Brexit round of talks, E.U. & U.K. officials failed to make any breakthrough on several vital issues. The negative comment from E.U. negotiator Michel Barnier that there was a still serious gap between Bloc and Britain weighed on GBP/USD pair.

The pair was further dragged in late after the release of a decreased unemployment rate from the U.S., which added strength to the U.S. dollar and dragged the GBP/USD pair with itself. At 17:30 GMT, the Non-Farm Employment Change for June showed that 4.800M jobs were created in one June, which gave strength to the U.S. dollar and dragged the GBP/USD pair from its daily gains. The Unemployment Rate from June also dropped to 11.1% from expected 12.4% and supported the U.S. dollar, which weighed on GBP/USD prices and turned the daily gins in losses.

A meeting between U.K. and E.U. negotiators scheduled for Friday this week has been delayed to next week due to divergence between them. This has raised serious doubts over securing the Brexit deal before the end of the transition period in December. This kept British Pound under heavy pressure and the pair GBP/USD on the downside on Thursday.

Daily Support and Resistance

  • R3 1.2657
  • R2 1.2574
  • R1 1.2524

Pivot Point 1.2441

  • S1 1.239
  • S2 1.2308
  • S3 1.2257

GBP/USD– Trading Tip

The GBP/USD is trading at 1.249 level, and it’s finding immediate support at 1.2478 level. Closing of candles above 1.2478 level can open further room for buying until double top resistance level of 1.2530 level. While, the bullish breakout of 1.2530 level, can drive further buying in Cable until 1.2620 level. The RSI and MACD show bullish bias as the MACD and RSI are holding in a buying zone. Let’s consider taking a buy trades above 1.2441 level today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.495 after placing a high of 107.722 and a low of 107.330. Overall the movement of USD/JPY remained bullish throughout the day. At 4:50 GMT, the Monetary Base for the year from Japan surged to 6.0% from the anticipated 4.2% and supported Japanese Yen, which kept a lid on the additional gains in USD/JPY pair.

At 17:30 GMT, the Average Hourly Earnings from the U.S. fell by 1.2% from the expected decline of 0.8% and weighed on the U.S. dollar. The Non-Farm Employment Change added 4.8M jobs in June against the expected 3.037M jobs and added strength in the U.S. dollar, which raised USD/JPY pair.

The Unemployment Rate from the U.S. for June also decreased to 11.1% from the expected 12.4% and supported the U.S. dollar. The Unemployment Claims from the previous week was not in favor of the U.S. dollar as it surged to1.427M against the expected 1.35M. The Trade Balance from the U.S. showed a deficit of 54.6B against the expected deficit of 53.0B and weighed on the U.S. dollar. At 19:00 GMT, the Factory Orders from the U.S. also declined to 8.0% from the expected 8.6% and weighed on the U.S. dollar.

The Non-Farm Payroll data showed a record high number of jobs created in June by the U.S. economy raised risk sentiment in the market after the hopes of sharp V-shaped economic recovery emerged due to a rise in NFP. It raised USD/JPY riskier assets across the board on Thursday, but the gains started to fell after the release of other economic data. The negative reports related to unemployment claims, factory orders, and trade balance from the U.S. exerted pressure on USD/JPY pair on Thursday.

Daily Support and Resistance    

  • R3 108.79
  • R2 108.48
  • R1 107.98

Pivot Point 107.67

  • S1 107.17
  • S2 106.86
  • S3 106.36


USD/JPY – Trading Tips

The USD/JPY is trading with a bearish bias of around 107.560. On the two-hourly charts, the USD/JPY is gaining bullish support from the regression channel. Channel is expected to support the USD/JPY pair around 107.420 while crossing below this level can open up further room for selling until 107 and 106.850 level. The 50 EMA will also be supporting the Japanese pair at 107.300 level. However, the MACD and RSI are suggesting selling bias. Let’s keep an eye on 107.400 level to buy above and sell below this level. Good luck! 


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