Daily F.X. Analysis, March 02– Top Trade Setups In Forex – Buckle up for Series of Manufacturing PMI 

Earlier today, during the Asian trading hours, EUR/USD extended its rally to 1.1056, and GBP/USD edged up to 1.2826 as traders seem to do profit-taking in the Greenback.

The eyes now will remain on the research firm Markit will publish final readings of February Manufacturing PMI for the eurozone (49.1 expected), Germany (47.8 expected), France (49.6 expected), the U.K. (51.9 expected) and the U.S. (50.8 expected). The Bank of England will release the number of mortgage approvals in January (68,000 expected) and the M4 money supply.

Economic Events to Watch Today 

 

 

---

EUR/USD – Daily Analysis

The EUR/USD rose 0.2% to 1.1026. Official data showed that Germany’s jobless rate was steady at 5.0% in January, and CPI grew 1.7% on year in February, both as expected.

The dollar has traded near a three-month high against the Euro as worries over the outbreak of Coronavirus has driven sharp volatility in the market, mostly driving dollar prices higher. The Euro has tried to rally higher during the Asian trading session on Monday but continues to encounter resistance above. 

The European stocks were also deep in the red, with the Stoxx Europe 600 Index falling a further 3.5%. Germany’s DAX dropped 3.9%, the U.K.’s FTSE 100 lost 3.2%, and France’s CAC was down 3.4%.

The eyes will remain on the final readings of February Manufacturing PMI for the eurozone (49.1 expected), Germany (47.8 expected), France (49.6 expected), the U.K. (51.9 expected), and the U.S. (50.8 expected). The U.S. Commerce Department will report construction spending in January (+0.6% on month expected). The Institute for Supply Management will post its manufacturing index for February (50.5 expected).

Daily Support and Resistance

• S1 1.092
• S2 1.0842
• S3 1.0799

Pivot Point 1.0963

• R1 1.1041
• R2 1.1084
• R3 1.1162

EUR/USD– Trading Tips

The EUR/USD is trading bullish near 1.1116, as the pair seems to go further higher after violating double top resistance at 1.1097. Chances of further buying in the EUR/USD remains pretty high until 1.1140 and 1.1185. The pair may find immediate support around 1.1095, which is mostly extended horizontal support level. The MACD and RSI still stay on the bullish side and are signaling odds of more buying in the pair. The EUR/USD may find resistance around 1.1140 and 1.1185, so let’s look for bullish trends above 1.1085.

---

GBP/USD– Daily Analysis

The GBP/USD dropped 0.5% at 1.2821, the lowest level since mid-October last year. The U.K. government is expected to publish a negotiating mandate for the future relationship with the European Union. 

The outbreak of the Coronavirus has directed some traders to think central banks will be required to go after dovish monetary policy to support the economy against the potential threat of a coronavirus. The Sterling is still trading with a bearish bias as the interest rate cut sentiment from 0.75% to 0.50% remains pretty solid. 

Prime Minister Boris Johnson’s Tories succeeded December’s election, extending his hold on parliament and pushing some Brexit risk, the Sterling was trading near 83 pence per Euro, and it also gained some support against the U.S. dollar.

The Bank of England will release the number of mortgage approvals in January (68,000 expected) and the M4 money supply.

Daily Support and Resistance

• R3: 1.3209
• R2: 1.3015
• R1: 1.2916
• Pivot Point 1.2821
• S1: 1.2722
• S2: 1.2627
• S3: 1.2432

GBP/USD– Trading Tip

The GBP/USD continues trading with a bearish bias, breaking out of a narrow trading range of 1.2980 – 1.2880. On the 4-hour chart, the Cable has formed violated the descending triangle pattern, which was supporting the Sterling around 1.2880. 

It’s was one of the most crucial trading levels, and violation of this has further open room for selling until 1.2755 area. Below this level, the GBP/USD has the potential to go after the 1.2660 area. The MACD and RSI are holding in the selling zone, supporting bearish bias for the GBP/USD pair. Let’s look for selling trades below 1.2966 and bullish above the same level today. 

---

USD/JPY – Daily Analysis

The USD/JPY rebounded to 109.30. This morning, government data showed that Japan’s fourth-quarter capital spending declined 3.5% on year (-2.6% expected). The USD/JPY extended its decline to 109.30. This morning, government data showed that Japan’s jobless rate rose to 2.4% in January (steady at 2.2% expected), while industrial production grew 0.8% on month in January (+0.2% expected) and retail sales climbed 0.6% (-0.1% expected).

The Coronavirus is growing in the Middle East, Europe, and another area of the world, as Brazil verified its initial case in Latin America, while other regions of China found to lower their emergency response level as the number of new cases recorded there proceeds to reduce.

The Greenback is now trading with a slightly bearish bias amid forecasts that the U.S. Federal Reserve may lower the interest rates this year to control downside influence on the economy produced by China’s coronavirus outbreak.

Daily Support and Resistance

• R3: 113.5
• R2: 112.2
• R1: 111.46

Pivot Point 110.9

• S1: 110.16
• S2: 109.6
• S3: 108.29

USD/JPY – Trading Tips

The USD/JPY continues with its bearish momentum on Monday in the wake of weakness in the U.S. dollar and stronger Japanese yen. The USD/JPY pair is recovered a bit in the wake of a bullish correction, but more selling seems to come soon. The USD/JPY is trading bearish at 107.775, and it has high odds of going towards the next support level of 107.338.

We can see on the 4-hour chart above, the USD/JPY has formed a bearish engulfing pattern below 108.350, which may trigger further selling until 107.338. We need to keep an eye in the USD/JPY as the closing of candles above 108.338 level can help us secure a buy trade with a take profit of around 109.650.  

All the best for today!