Daily FX Brief, November 04– Major Trade Setups – Stronger NFP Supports Dollar!

The Dollar Index slipped 0.2% on the day to 97.12 on Friday, down for a fifth straight session. The euro edged up 0.1% to $1.1167 while the British pound was little changed at $1.2935. The Markit U.K. Manufacturing PMI bounced to 49.6 in October (48.2 expected) from 48.3 in September.

USD/JPY rebounded 0.2% from a three-week low to 108.19. USD/CAD fell 0.2% to 1.3136. The Markit Canada Manufacturing PMI climbed to 51.2 in October from 51.0 in September.

Economic Events to Watch Today

Let’s took at these fundamentals.

  

---

GBP/USD– Daily Analysis

The GBP/USD currency pair flashing green and found on the recovery track mainly due to increasing optimism regarding the post-December election. As of writing, the cable pair currently trading at 1.2940.

At the time of writing, the GBP/USD pair was traded at 1.2937, up 0.03%, because traders await new ECB head Christine Lagarde’s first official speech, which is scheduled to happen later in the day.

Be it YouGov, Ipsos or Deltapoll suggest a clear lead of the Boris Johnson over the main opposition Labour Party regarding the general election on December 12. However, the United Kingdom Prime Minster Boris Johnson still looks doubtful due to Times mentions that the PM Boris Johnson will remove all fear regarding the no-Brexit deal from the Conservative party manifesto.

Moreover, the announcement came from the U.S. Commerce Secretary Wilbur Ross during the Sunday that the licenses for the American firm to perform business with the blacklisted Chinese Huawei companies will be given very soon. Apart from this, he said that the United States and China already very delayed with phase one of the trade deal, so the agreement will likely be signed very soon.

As we know, there was a little movement in the risk-on market, possibly due to President Donald Trump did not attend the Association of Southeast Asian Nations (ASEAN) summit in Thailand.

Moreover, the market sentiment has been unstable since the start due to the lack of primary data, and the event and Japan market closed as well.

Looking forward, all investors will keep their eyes on the trade and Brexit headlines whereas also keeping the focus on Markit Construction Purchasing Managers Index from the United Kingdom and the United States Facote Orders for September. 

Market consensus supports an upbeat print of 44.00 against 43.3 from the British PMI, whereas also expecting the U.S. statistics to decrease further to -0.3% from -0.1% previous.

Daily Support and Resistance    

S3 1.2855

S2 1.2901

S1 1.292

Pivot Point 1.2946

R1 1.2966

R2 1.2992

R3 1.3037

GBP/USD– Trading Tips

The GBP/USD hasn’t changed much so far as it continues to trade bullish due to the weaker U.S. dollar. The Cable has outraged the previous resistance level of 1.2930. Now the pair is likely to face fresh resistance around 1.3050 area. Consider staying bullish above 1.2941 today.  

USD/JPY – Daily Analysis

The USD/JPY currency pair consolidates in the narrow range near the 108.22, and the pair failed to reach on the bullish track of 100-day EMA as the global risk headlines were entirely in the market for the weekend.

However, the USD/JPY currency pair recently got support from the United States, and China trades positive news because the United States President Donald Trump recently hinted that the round-one of a trade deal would be signed in this month near the U.S. 

Moreover, the announcement came from the U.S. Commerce Secretary Wilbur Ross during the Sunday that the licenses for the American firm to perform business with the blacklisted Chinese Huawei companies will be given very soon. Apart from this, he said that the United States and China already very delayed with phase one of the trade deal, so the agreement will likely be signed very soon.

While the United States’ ten-year treasury yield recently declined to multi-weeks lows mainly due to the United States Federal Reserve Bank, Indonesia and Central Bank of Brazil recently announced the 3rd consecutive rate cut in their benchmark rates.

Such as the markets of japan close today due to culture holiday so that investors will keep their focus on the risk catalysts like the United States and China trade-headlines and political plays regarding the Brexit for fresh impulse.

Notably, the risk tone in the market could keep recent recovery mainly due to the positive sentiment regarding trade deal between the United States and China and also due to receding political uncertainty regarding Brexit. However, any negative activity or headlines could be taken very seriously regarding the market’s uncertainty.

    


Daily Support and Resistance

    

S3 107.33

S2 107.74

S1 107.96

Pivot Point 108.14

R1 108.37

R2 108.55

R3 108.96

 USD/JPY – Trading Tips

The USD/JPY continues to trade bearish with the selling bias due to weakness in the U.S. dollar. The USD/JPY pair broke the bullish channel, which was holding the USD/JPY at 108.800 zones.

Three Black Crows candlestick patterns are suggesting chances of additional selling in the USD/JPY until 107.450 today. On the upper side, resistance is likely to stay at 108.350. Consider taking bearish trades under 108.350 today.  

---

EUR/USD – Daily Analysis

The EUR/USD currency pair flashing green and presently trading at 1.1170, in the wake of the United States and China trade patch-up certainty. Moreover, the EUR/USD pair could take more buying trends, mainly due to confidence surrounding the United States and China.

Whereas, the Shared currency hit the low of 1.1128 during the United States trading session on Friday due to U.S. Nonfarm Payrolls beats forecasted numbers. No Doubt, the decline was short-lived, and the EUR/USD currency pair closed on the bullish track near 1.1165.

So, the EUR/USD currency pair least resistance level is on the bullish range. Whereas, the pair’s bullish sentiment could be increased due to the United States and China trade optimism and the resulting risk-on in the equities. 

An announcement came from the U.S. Commerce Secretary Wilbur Ross during the Sunday that the licenses for the American firm to perform business with the blacklisted Chinese Huawei companies will be given very soon. Apart from this, he said that the United States and China already very delayed with phase one of the trade deal, so the agreement will likely be signed very soon.

It should be noted that the Eurozone’s manufacturing powerhouse has got a big hit in the wake of the Sino-US trade war. Therefore, trade certainty between the United States and China could support the German economy and the EUR currency.

As of data, the final Manfutring PMI figures are scheduled to release across the EurozoneEurozone. Moreover, the Eurozone’s Sentix Investor Confidence for November is expected to release at 09:30 GMT, may leave any impact on the currency pair. Across the pond, the ISM-NY Business Conditions Index (Oct) and Factory Orders (Sep) data are scheduled for release. 

Daily Support and Resistance

S3 1.1067

S2 1.1111

S1 1.1138

Pivot Point 1.1155

R1 1.1182

R2 1.1199

R3 1.1243

EUR/USD– Trading Tips

The EUR/USD has struck below the double top resistance point of 1.1175 and has lately closed series of neutral candles, which are suggesting chances of a bearish bias until the 1.1175 level gets violated. The pair still stays in the buying zone as the MACD, and RSI value is holding above 0 and 50, respectively. Consider staying bullish above 1.1153 to 1.1180 and 1.1220 today. 

All the best!