Forex Market Analysis

European Union and Japan Sign a Trade Deal – Forex and Indices – Daily Update – 17.07.18

Fundamental Overview

European Union and Japan sign a trade deal

Financial Market Updates: Japan and the European Union signed a trade deal amid uncertainty generated by the protectionist policy led by the Trump Administration. The trade deal creates the largest open economic area. The agreement promises to eliminate 99 per cent of tariffs.



Technical Analysis


Today the EURUSD pair failed the bullish continuation, remaining in the consolidation range, it suggests that the pair should continue with the previous bearish cycle. In consequence, we update our bias from a bullish to a bearish move. The potential sell zone (PSZ) is between 1.1760 and 1.1807 with a bearish target placed at 1.1293. Invalidation level is 1.1852.




As noticed in previous Daily Updates, the GBPUSD pair in a 2-hour chart is moving sideways, the short-term pivot level at 1.3275 has failed, in consequence, GBPUSD should make a new lower low. The Pound could fall to the area between 1.3024 and 1.2885, completing a major degree bearish cycle. Invalidation level is at 1.3472.




The complex corrective structure that is developing the USDCHF pair in the 2-hour chart shows a signal more for a bullish continuation than a downward reversal move. In the last session, the Swiss currency tested and bounced from the potential buy zone. We foresee USDCHF making a new higher high with the target placed in the area between 1.0112 and 1.0141. Invalidation level is at 0.9857.




The EURJPY cross in the 2-hour chart is moving bullish in an ascending wedge; the price tested the exhaustion zone between 132.01 and 133.05, from where we expect a bearish reversal move as a bull trap. We foresee drops to the area between 129.87 to 129.28. Consider that if the price makes a bull trap after this, it is highly likely that the price will make a bullish failure pattern.




The GBPJPY cross in the 2-hour chart is making a consolidation pattern after a bullish impulsive move, which could make fresh highs to the area between 150 and 150.70. Our vision for the cross is that the price could make a limited low to the 146.2 level before it continues its previous bullish trend. Invalidation level is 143.799.



FTSE 100

As commented in previous Daily Update, FTSE 100 in the 2-hour chart continues consolidating between 7,720 pts and 7,550 pts. We maintain our bias as neutral in FTSE 100 index.



DAX 30

DAX 30 in the 2-hour chart soared above the 12,600 pts and is near to reaching the exhaustion zone at 12,695 pts. The next control level is 12,807 pts which could drive to 13,020 pts, completing an internal bullish cycle. Invalidation level of the bullish cycle is 12,104 pts.


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