Forex Fundamental Analysis Signals
In this session, markets are moving expectant at the G7 summit news, mainly due to the tone between President Trump and the rest of the leaders of the seven wealthiest economies of the world. The expectation occurs in the context of the tariffs imposed by the Trump Administration as part of the “America First” agenda to the steel and aluminium imports from Canada, European Union, and Mexico. The United States and European Union have established a dialogue for this Friday, said a French official. President Macron is confident in the advancement of trade issues that have split the United States and its trade allies.
Another summit that markets are following is the meeting of the Shanghai Co operation Organization (SCO). The meeting will begin this Saturday and will include with China, Russia, India, Pakistan and other four nations from Central Asia. The importance of this meeting lies in the fact that while G7 leaders are discussing the new protectionism, the Chinese President Xi Jinping and the Indian Prime Minister Narendra Modi will talk about an “open and inclusive world economy.”
The DAX 30 opened the session with a bearish gap. Still, the index is in a corrective structure. This is normal after the rally that started developing on March 26th when DAX found support at 11,726.6 up to May 22nd when it reached the 13,204.3 points. Our vision for DAX is that price could make a new lower low at 12,528.9 pts.
The FTSE 100 maintained the same consolidation structure from the past week. In the same way as the DAX 30, the FTSE is consolidating after the rally showed since March 26th when it touched the 6,866.9 level and then made an extended wave soaring to 7,903.5 in May 22nd. We foresee a new lower low at 7,468.3 points.
The common currency is developing a retracement from the 1.1840 level; the highest level reached in four weeks. We expect the pair will make a new higher low to the area between the levels 1.1724 to 1.1667, as an A-B-C structure. From this zone, we should see new higher highs to the 1.19 area.
The pound is making a corrective move shaping an A-B-C pattern, which should dip to the area between 1.33423 and 1.32880. From this area, the pair GBPUSD should continue the bullish cycle started on May 29th, when the price touched the 1.32045 support. The mid-term target is at 1.35940. Invalidation level for this sequence is 1.32544.
The Swiss currency is making a bearish move from the highest level reached on May 7th, when it touched the 1.00563 level. From this area, the pair started to dip in five waves, finding support at 0.97883 on June 7th. From this level, the USDCHF pair bounced above the last corrective structure touching the 0.98877 price. If 0.97883 represents the short-term bottom, we expect a new lower move to the area between 0.98313 and 0.98092, from where the USDCHF could begin to see new higher highs.
The cross is making a corrective pattern as a flag structure, if the price reaches the zone between 146.234 and 145.719, we foresee a new rally which should carry the price to new highs between 148.908 to 149.645 area.
GBPCHF is building an expanding ascending triangle. Our main scenario is a new low to the area between 1.31242 and 1.30806, from this area we expect a new higher target in the zone between 1.33236 and 1.33745. Invalidation level is 1.30581.