Tag: Daily Support and Resistance

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Forex Market Analysis

Daily F.X. Analysis, December 09 – Top Trade Setups In Forex – Brace for BOC Policy! 

On the news front, the economic calendar is filled with the Bank of Canada’s policy rate. The BOC is expected to keep the Overnight Rate rate unchanged at 0.25%, which is likely to drive no major change in the Loonie. The BOC Rate Statement will be worth watching to determine further moves in CAD.

On the news front, the economic calendar is filled with the Bank of Canada’s policy rate. The BOC is expected to keep the Overnight Rate rate unchanged at 0.25%, which is likely to drive no major change in the Loonie. The BOC Rate Statement will be worth watching to determine further moves in CAD.

On the news front, the economic calendar is filled with the Bank of Canada’s policy rate. The BOC is expected to keep the Overnight Rate rate unchanged at 0.25%, which is likely to drive no major change in the Loonie. The BOC Rate Statement will be worth watching to determine further moves in CAD.

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD closed at 1.21044 after placing a high of 1.21337 and a low of 1.20952. EUR/USD pair fell on Tuesday for the third consecutive session but remained under consolidation in a tight range. The EUR/USD pair avoided major losses as the Euro remained appealing due to broad weakness in the U.S. dollar. The U.S. Dollar Index fell to its two and a half years lowest level on Tuesday and capped further losses in the EUR/USD pair. The U.S. dollar was weak on Tuesday as the country crossed the threshold of 15 million coronavirus cases, which was the world’s highest total. American hospitals braced to ration care amid staff shortages and warned about the rampant spread of the disease.

Pennsylvania’s governor Tom Wolf said that the coronavirus was running extensively throughout the state and could soon reach the level where hospitals will begin turning away patients. He also said that additional pandemic restrictions might be on controlling the spread of the virus.

Meanwhile, the talks for the second round of coronavirus relief stimulus between Democrats and the Republicans and the agreement of both parties over the bipartisan proposal of a $908 billion stimulus package also weighed on the U.S. dollar. Due to stimulus hopes and the rising number of coronavirus cases, the weak U.S. dollar capped further downside in the EUR/USD pair on Tuesday.

On the data front, at 11:30 GMT, the French Final Private Payrolls for the quarter raised to 1.6% against the expected -1.0% and supported the single currency Euro. At 12:45 GMT, the French Trade Balance showed a deficit of -4.8B against the expected -5.5B and supported Euro. At 15:00 GMT, the quarter raised the Final Employment Change to 1.0% against the forecasted 0.9% and supported Euro. The Revised GDP for the quarter dropped to 12.5% against the expected 12.6% and weighed on Euro. The ZEW Economic Sentiment raised in December to 54.4 against the estimated 37.5 and supported Euro. The German ZEW Economic Sentiment also surged to 55.0 from the projected 45.9 and supported Euro.

From the U.S. side, at 01:00 GMT, the Consumer Credit for October fell to 7.2B against the projected 17.6B and weighed on the U.S. dollar and capped further losses in EUR/USD pair. At 16:00 GMT, the NFIB Business Index fell to 101.4 against the estimated 102.6 in November and weighed on the U.S. dollar that capped further losses in the EUR/USD pair.

At 18:30 GMT, the Revised Nonfarm Productivity for the quarter declined to 4.6% against the expected 4.9% and supported the U.S. dollar and supported the downward momentum in EUR/USD pair. The Revised Unit Labor Costs for the quarter came in as -6.6% against the estimated -8.9% and supported the U.S. dollar. 

At 20:00 GMT, the IBD/TIPP Economic Optimism came in as 49.0 in December compared to the previous 50.0.

Moreover, the Euro remained comparatively appealing due to a more optimistic outlook of the Eurozone’s economy than the U.S. that capped further losses in the EUR/USD pair. The ECB’s policy decision is scheduled for Thursday. If the ECB takes a more hawkish tone, then Euro will rise and vice versa.

Daily Technical Levels

Support   Resistance

1.2086        1.2125

1.2071       1.2149

1.2046       1.2165

Pivot point: 1.2110

EUR/USD– Trading Tip

The EUR/USD is trading at 1.2127 level, finding an immediate resistance at 1.2160 and 1.2196 level along with a support level of 1.2085. Closing of candles underneath the 1.2103 level can send the EUR/USD pair further lower until 1.2080 and 1.2040. However, the focus is likely to stay on the German Trade Balance, which is due during the European session. Choppy session expected until economic figures show major deviations. The MACD is mixed, suggesting bearish; therefore, the idea will be to open a sell trade below the 1.2175 level today to capture quick green pips. 

GBP/USD – Daily Analysis

The GBP/USD pair closed at 1.33564 after placing a high of 1.33935 and a low of 1.32894. The GBP/USD pair fell on Tuesday for the third consecutive day amid the rising Brexit uncertainty that took its toll on British Pound. The mixed comments from various officials from both sides raised the uncertainty in the market related to the Brexit deal and weighed on British Pound. The British Cabinet Minister Michael Gove announced that they had reached an agreement in principle. The E.U.’s chief negotiator Michel Barnier told European ministers that a deal’s chances were very thin. At the same time, German Minister Michael Roth said there was no substantial progress in the trade talks between the E.U. and the U.K. He added that it was uncertain whether Britain and the E.U. could reach a trade deal.

All this uncertainty in the market weighed on the British Pound and dragged the pair GBP/USD on the downside. Another factor involved in the GBP/USD pair’s downward momentum was the latest move by the U.K. government to drop parts of its controversial internal market bill that paved the way for both sides to meet in Brussels on Wednesday to settle an agreement.

The U.K. government reached a post-Brexit arrangement in principle over the Irish border with the European Union after agreeing to ditch the most controversial parts of its internal markets bill. On Tuesday, the U.K. government said that it would abandon all the Brexit clauses relating to Northern Ireland in the internal market bill in exchange for promises by the E.U. to minimize checks and control due to being imposed on food and medicines going into Northern Ireland from Great Britain from January 01.

A deal on Ireland is reached between the E.U. and the U.K. it was not one of the key sticking points that have held the Brexit talks hostage. The Brexit talks will enter a last decisive phase from Wednesday as the PM Boris Johnson has prepared to travel to Brussels on that day to secure a deal over the European Union’s relations with the U.K. If he failed to reach an agreement with the E.U. It would mean that from the start of next year, the tariffs would be applied to some trade between the U.K. and the E.U. for the first time in almost half a century. U.K. sends almost 43% of its exports to the trade bloc E.U. and tariffs on its exports will be harmful to its economy. Failure to reach a deal will also end many cooperation types between the U.K. and the E.U. over crime, security, and travel.

The British Pound remains under pressure on Tuesday ahead of the final round of talks between PM Johnson and E.U. Commission President Ursula von der Leyen on Wednesday. On the data front, at 05:01 GMT, the BRC Retail Sales Monitor for the Year raised to 7.7%against the forecasted 5.0% and supported British Pound, and capped further losses in GBP/USD pair.

From the U.S. side, at 01:00 GMT, the Consumer Credit for October declined to 7.2B against the estimated 17.6B and weighed on the U.S. dollar. At 16:00 GMT, the NFIB Business Index declined to 101.4 against the expected 102.6 in November and weighed on the U.S. dollar.

At 18:30 GMT, the Revised Nonfarm Productivity for the quarter fell to 4.6% against the expected 4.9% and supported the U.S. dollar. The Revised Unit Labor Costs for the quarter came in as -6.6% against the projected -8.9% and supported the U.S. dollar. At 20:00 GMT, the IBD/TIPP Economic Optimism came in as 49.0 in December compared to the previous 50.0.

Daily Technical Levels

Support   Resistance

1.3297       1.3400

1.3242       1.3448

1.3193       1.3504

Pivot point: 1.3345

GBP/USD– Trading Tip

The GBP/USD is trading at 1.3378, holding below an immediate resistance level of 1.3395. On the higher side, the GBP/USD pair can lead to a 1.3437 level, and support stays at 1.3340, which is extended by an upward trendline. Overall it’s an ascending triangle, and it typically breaks on the higher side; thus, we can expect the GBP/USD price to move until 1.3435.

USD/JPY – Daily Analysis

The USD/JPY pair closed at 104.161 after placing a high of 104.204 and a low of 103.953. The pair posted gains on Tuesday as the market’s risk sentiment improved due to a combination of factors.

The news that Great Britain has started using the Pfizer vaccine on patients from Tuesday increased the risk-on sentiment as the hopes for economic recovery increased. Another factor involved in the rising risk-on sentiment was the rising hopes that the U.S. will soon deliver the second round of stimulus measures.

On late Monday, the Chinese Foreign Minister, Wang Yi, said that Beijing was open to restarting its relationship with the U.S. He also declared that both countries were at a critical historical stage after a year of intensifying tensions. Wang said that U.S. policy on China needed to return to objectivity and rationality. He also said that both sides should struggle to restart the dialogue and get back on the right track and rebuild mutual trust in the next Sino-US relations phase. Wang blamed the growing division between the world’s two biggest economies on some Americans with outdated Cold War mentality and ideological preconceptions. All these developments in vaccine usage, rising hopes for stimulus, and the U.S. and China relationship raised the risk sentiment that weighed heavily on the safe-haven Japanese Yen that ultimately supported the USD/JPY pair on Tuesday.

On the data front, at 04:30 GMT, the Average Cash Earnings for the Year came in as -0.8% against the expected -0.7% and weighed on the Japanese Yen. The Household Spending for the Year dropped to 1.9% against the forecasted 2.7% and weighed on the Japanese Yen and added gains in the USD/JPY pair. At 04:50 GMT, the Bank Lending for the Year came in line with the expectations of 6.3%. The Current Account Balance from Japan showed a surplus of 1.98T against the forecasted 1.83T for October and supported the Japanese Yen.

The quarter’s final GDP also raised to 5.3% against the expected 5.0% and supported the Japanese Yen. AT 04:52 GMT, the Final GDP Price Index for the Year raised to 1.2% against the forecasted 1.1% and supported the Japanese Yen. At 10:00 GMT, the Economic Watchers Sentiment dropped to 45.6 against the expected 52.7 and weighed on the Japanese Yen that supported the USD/JPY pair’s upward trend.

From the U.S. side, at 01:00 GMT, the Consumer Credit for October fell to 7.2B against the estimated 17.6B and weighed on the U.S. dollar. At 16:00 GMT, the NFIB Business Index fell to 101.4 against the estimated 102.6 in November and weighed on the U.S. dollar. At 18:30 GMT, the Revised Nonfarm Productivity for the quarter declined to 4.6% against the forecasted 4.9%, supported the U.S. dollar, and added further gains in the USD/JPY pair. The Revised Unit Labor Costs for the quarter came in as -6.6% against the projected -8.9% and supported the U.S. dollar and supported the USD/JPY pair’s upside momentum. At 20:00 GMT, the IBD/TIPP Economic Optimism came in as 49.0 in December than the previous 50.0.

Meanwhile, the USD/JPY pair’s gains remained limited as the U.S. dollar was under pressure as the country crossed 15 million coronavirus cases, which was the world’s highest total. American hospitals started to give warnings about the staff shortage and extensive spread of the disease. Pennsylvania’s governor Tom Wolf said that the coronavirus was spreading extensively throughout the state and could soon reach the level where hospitals will begin turning away patients. He also said that additional pandemic restrictions might be on controlling the spread of the virus.

Daily Technical Levels

Support   Resistance

104.00       104.27

103.84       104.38

103.73       104.54

Pivot point: 104.11

USD/JPY – Trading Tips

The USD/JPY is trading within a symmetric triangle pattern observed in the 4-hour timeframe. The pair recently disrupted the sideways trading series of 104.600 – 104.200, and now it’s trading at 104.300 level, especially after bouncing off over 103.700 level on the lower side, supporting the pair nearby 103.700 mark. On the downside, the USD/JPY may find support at the 103.200 level upon a bearish breakout of the 103.750 support level. While resistance stays at 104.350 and 104.700 today. Good luck

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Forex Signals

AUD/USD Upward Channel In-Play – Brace for a Buying Trend! 

The AUD/USD closed at 0.74260 after placing a high of 0.74435 and a low of 0.74100. After rising for three consecutive days, the AUD/USD pair dropped on Friday and posted small losses as it remained confined in a range between 0.74100 and 0.74400. The currency pair rose in the early trading session on Friday as it followed the previous day’s trend and because of the Australian side’s supportive economic data. Another factor involved in the rising AUD/USD prices in the early trading session was the improved risk-sentiment from the latest development in the coronavirus vaccine.

The AUD/USD closed at 0.74260 after placing a high of 0.74435 and a low of 0.74100. After rising for three consecutive days, the AUD/USD pair dropped on Friday and posted small losses as it remained confined in a range between 0.74100 and 0.74400. The currency pair rose in the early trading session on Friday as it followed the previous day’s trend and because of the Australian side’s supportive economic data. Another factor involved in the rising AUD/USD prices in the early trading session was the improved risk-sentiment from the latest development in the coronavirus vaccine.

The AUD/USD closed at 0.74260 after placing a high of 0.74435 and a low of 0.74100. After rising for three consecutive days, the AUD/USD pair dropped on Friday and posted small losses as it remained confined in a range between 0.74100 and 0.74400. The currency pair rose in the early trading session on Friday as it followed the previous day’s trend and because of the Australian side’s supportive economic data. Another factor involved in the rising AUD/USD prices in the early trading session was the improved risk-sentiment from the latest development in the coronavirus vaccine.

The approval for emergency use authorization to Pfizer and BioNtech added in the risk sentiment as the hopes for global economic recovery increased and supported the risk-sensitive Aussie. The strong Australian dollar pushed the AUD/USD pair higher in early trading hours on Friday. On the data front, at 05:30 GMT, the Retail Sales from Australia raised to 1.4% against the projected 0.5% and supported the Australian dollar, and capped further losses in AUD/USD pair.

From the US side, at 18:30 GMT, the Average Hourly Earnings rose to 0.3% against the expected 0.1% and supported the US dollar and added pressure on AUD/USD pair. The Non-Farm Employment Change fell to 245K against the expected 480K and weighed on the US dollar, and capped further losses in AUD/USD pair. The Unemployment Rate fell to 6.7% against the expected 6.8% and supported the US dollar. The Trade Balance from the US came in as -63.1B against the expected -64.7B and supported the US dollar. At 20:00 GMT, the Factory Orders for November rose to 1.0% against the expected 0.8% and supported US Dollar and added pressure on AUD/USD pair.

Despite the US’s disappointing Job report, the unemployment rate and factory order data managed to support the US dollar through the rough time and exerted downward pressure on AUD/USD pair. Meanwhile, the AUD/USD pair’s losses were also limited because of the underlying pressure on the US dollar after the agreement between Democrats and Republicans over the $908 billion stimulus package. The agreement on the bipartisan proposal added hopes that a massive stimulus could also be approved and weighed on the US dollar that kept the losses in AUD/USD pair limited on Friday.


Daily Technical Levels

Support Resistance

0.7407 0.7461

0.7376 0.7482

0.7354 0.7514

Pivot point: 0.7429

The AUD/USD slipped to trade at 0.7372 level, holding above an upward support level, which is extended by an upward channel. The AUD/USD channel may drive upward movement until 0.7405 and 0.7440 resistance levels on the higher side. Conversely, a bearish breakout of 0.7372 level can extend the selling trend until the next support level of 0.7337. The RSI and MACD are reporting selling bias in the pair. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, September 18 – Top Trade Setups In Forex – Consumer Sentimentin Focus! 

On the news front, the focus will remain on the U.S. Prelim Consumer Confidence and C.B. Leading Index m/m, which are expected to report mixed outcomes and may drive choppy movement in the U.S. dollar. Let’s focus on technical levels today.

On the news front, the focus will remain on the U.S. Prelim Consumer Confidence and C.B. Leading Index m/m, which are expected to report mixed outcomes and may drive choppy movement in the U.S. dollar. Let’s focus on technical levels today.

On the news front, the focus will remain on the U.S. Prelim Consumer Confidence and C.B. Leading Index m/m, which are expected to report mixed outcomes and may drive choppy movement in the U.S. dollar. Let’s focus on technical levels today.

Economic Events to Watch Today  

 

 

EUR/USD – Daily Analysis

The EUR/USD closed at 1.18474 after placing a high of1.18522 and a low of 1.17371. On Thursday, the EUR/USD pair fell in the early trading session to the lowest level since August 12 but managed to reverse its direction and recover its daily losses. The shared currency Euro remained appealing this week and has been driven more by movements in rival currencies like the U.S. dollar. A rise in demand for the U.S. dollar was the primary cause of the EUR/USD pair’s early losses.

In the early trading session, the U.S. dollar saw a jump in demand in reaction to the latest Fed’s decision to keep interest rates near zero until 2023. Fed also decided not to announce any stimulus package that lifted the demand for the greenback. This rise in the U.S. dollar pressured the EUR/USD pair, and the pair saw a sudden decline to its lowest level since mid-August.

After this decision to not add more stimulus to advance the Fed’s goal of spurring inflation, the U.S. stocks fell sharply on Thursday as the risk sentiment faded away. This decreased risk sentiment also added further weakness in the EUR/USD pair. 

The sudden decline in the EUR/USD could also be attributed to the latest warning from the World Health organization that cautioned on Thursday and said that there were alarming rates of transmission of coronavirus across Europe. This warning came in against the shortening quarantine periods from countries across Europe. After this warning, the concerns and fears of a resurgence of coronavirus raised and the local currency suffered that dragged the currency pair on the downside.

However, the Eurozone market outlook remains optimistic due to the bloc’s handling of the coronavirus pandemic. The Eurozone data has not been influencing this week as the Eurozone inflation data released at 14:00 GMT came in line with the expectations of -0.2%. The Final Core CPI for the year also remained flat with a projection of 0.4%. Whereas, the Italian Trade Balance rose to 9.69B against the forecasted 5.20B and supported the shared currency that pushed the EUR/USD pair’s prices on the upside.

Another factor involved in the upward movement of currency pair in the late trading session was the negative macroeconomic data releases from the United States. At 17:30 GMT, the Unemployment Claims from the U.S. last week rose to 860K from the forecasted 825K and weighed on the U.S. dollar. The Building Permits also declined to 1.47M from the projected 1.51M and weighed on the U.S. dollar. The Housing Starts dropped to 1.42M against the forecasted 1.47Mand weighed on the U.S. dollar. These negative reports from the U.S. pushed the pair EUR/USD higher in the late trading session.o increase the 2030 target of emission reduction to 55%, and investment for digital technologies. 

Daily Technical Levels

Support Resistance
1.1772      1.1889
1.1696      1.1930
1.1655      1.2007
Pivot point: 1.1813

EUR/USD– Trading Tip

The EUR/USD pair has traded sharply bullish to trade at 1.1849 level, and now it’s trading sideways within a narrow trading range of 1.1865 level to 1.1849 level. Violation of this range may determine further trends in the market. On the higher side, the EUR/USD can go after the 1.1898 level. Conversely, a bearish breakout of the 1.1840 support level may extend selling bias until the 1.18200 level.

GBP/USD – Daily Analysis

The GBP/USD closed at 1.29723 after placing a high of 1.29990 and a low of 1.28647. Overall the movement of the GBP/USD pair remained flat but slightly bullish throughout the day. On Thursday, the GBP/USD pair extended its bullish streak for 4th consecutive day. However, the gains were very short on Thursday as the pair dropped in the first half of the day amid broad-based U.S. dollar demand. In the second half of the day, the pair bounced back on the upside amid Bank of England’s latest monetary policy decision and weak U.S. economic data.

During the Asian and European trading session on Thursday, the pair faced high pressure due to the broad-based U.S. dollar strength driven by the latest Federal Reserve monetary policy decision. The Fed decided to hold its interest rates near zero until inflation reached 2% or above, projected to reach till 2023. Fed also decided not to announce any stimulus measure against the expectations, so the U.S. dollar rebounded.

The U.S. dollar strength dragged the pair EUR/USD on the downside; however, the pair managed to recover its daily losses and bounced back in the late trading session. The British Pound recovered from session lows on Thursday as the Bank of England kept the rates unchanged. The Bank kept the rates at 0.1% and the asset purchase target at 745B Pound and hinted that it was ready to adjust monetary policy to meet to support the recovery. 

As per the Bank of England, the U.K. economic data justified that Bank’s policies supported the recovery and acknowledged that GDP and inflation had recently been running above the estimates given in the August monetary policy report. However, despite the faster pace of economic recovery in the U.K., the Bank left the door open for negative interest rates as additional policy measures to keep the economy on track if the second wave of coronavirus emerged and affect the labor market that could trigger the slowdown.

The less dovish comments from BoE and cooling expectations that easing in November was a forgone conclusion raised the British Pound, and the pair GBP/USD started moving in an upward direction. Furthermore, the U.S. dollar came under pressure on the data front after the negative macroeconomic data releases on Thursday. The Unemployment claims from the U.S. rose during last week to 860K against the expectations of 825K and weighed on the U.S. dollar. The Building Permits also declined along with the Housing Starts in August to 1.47M and 1.42M, respectively. These negative economic figures also helped the GBP/USD pair to move on the upside and recover its early losses.

On the other hand, on the Brexit front, the Pound got an unexpected boost from the latest comments from E.U. Commission President Ursula von der Leyen, who said that she believes a trade deal with the U.K. was still possible despite the distraction caused by Boris Johnson’s Internal Market Bill. These comments also helped the GBP/USD pair to reverse its early daily movement on Thursday.

 Daily Technical Levels

Support Resistance
1.2890      1.3025
1.2810      1.3080
1.2756      1.3160
Pivot point: 1.2945

GBP/USD– Trading Tip

The GBP/USD pair is trading at 1.2945 level, holding within an upward channel supporting the pair at 1.2909 level. The closing of the recent Doji candle over the EMA and upward trendline support level of 1.2909 level suggests odds of upward movement in the market. Considering this, we may have some upward trend in the Sterling ahead of the BOE rate decision. Thus, we should look for a buying trade with a target of 1.2996 level. Violation of 1.2909 le el can trigger selling bias until 1.2828 level.

 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.737 after placing a high of 105.172 and 104.523. The pair USD/JPY extended its losses for the 4th consecutive day on Thursday and dropped to its lowest level since July 31 on the strong demand for the Japanese Yen. The pair was rather unaffected by the modest pickup in the U.S. dollar demand after the Federal Reserve kept its rates neat zero for likely until 2023 and refrained from announcing further monetary stimulus package.

On late Wednesday, the global risk sentiment was hit after the Fed failed to offer any clues about additional stimulus measures with the S&P 500 index down by 0.6% on the day. The Fed also upgraded its economic outlook and projected a much shallower contraction in 2020. This supported the rise in the U.S. dollar; however, it failed to impress the USD/JPY pair’s bullish traders as the focus was shifted to Japan’s monetary policy.

On Thursday, the Bank of Japan left its aggressive monetary stimulus on hold and upgraded its view of the pandemic-hit economy. The Bank of Japan announced its monetary policy decision a day after Mr. Yoshihide Suga took over as Prime Minister and pledged to continue his predecessor’s stance on monetary and fiscal policy.

As expected, the Bank of Japan kept its interest rates at -0.1% and left its asset purchases unchanged. Mr. Suga said that there was no need for any immediate changes in BOJ policies as they have helped to keep the financial markets stable and get credit to companies amid the coronavirus crisis. The Central Bank’s economic assessment was upgraded for the first time on Thursday since the coronavirus hit the economy and sent it to the bottom. BOJ said that economy has started to pick up with activity resuming gradually. However, the pace for recovery was likely to be only moderate as the pandemic is continuously affecting the countries worldwide. The BOJ decision came after hours the Federal Reserve unveiled its latest policy guidance, and the traders followed more the BOJ’s statement as it was the latest and the pair USD/JPY continued declining. 

Another reason behind the decreased USD/JPY prices was the negative and depressing U.S. economic data on Thursday. At 17:30 GMT, the Philly Fed Manufacturing Index remained unchanged and came as expected 15.0. The Unemployment Claims last week advanced to 860K against the anticipated 825K and weighed on the U.S. dollar. In August, the Building Permits also dropped to 1.47M from the forecasted 1.51M, and the Housing Starts declined to 1.42M from the expected1.47M and weighed on the U.S. dollar. The weak U.S. economic data weighed on the U.S. dollar and added further in the USD/JPY pair’s losses on Thursday.

Daily Technical Levels

Support Resistance
104.44      105.10
104.15      105.47
103.78      105.76
Pivot point: 104.81

USD/JPY – Trading Tips

The USD/JPY pair had violated the double bottom support level of 107.750, and now it’s holding below 50 periods EMA, suggesting odds of selling bias in the USD/JPY. On the 4 hour timeframe, the downward channel is likely to drive selling bias in the USD/JPY pair. On the lower side, the support stays at 104.500 level, and a bearish breakout can lead USD/JPY price further lower towards 104.300 level. The focus will remain on the Prelim UoM Consumer Sentiment data as it may drive further market trends. The MACD and EMA are also in support of selling bias. 

Good luck! 

 

 

Categories
Forex Market Analysis

Daily F.X. Analysis, September 08 – Top Trade Setups In Forex – European Data in Focus! 

On Tuesday, the economic calendar offers low impact economic events that may not drive any solid movement in the market. However, the eyes will remain on the German Trade Balance, French Trade Balance, and Revised GDP figures from the Eurozone. EUR currency pairs can show some price action during the day today.

On Tuesday, the economic calendar offers low impact economic events that may not drive any solid movement in the market. However, the eyes will remain on the German Trade Balance, French Trade Balance, and Revised GDP figures from the Eurozone. EUR currency pairs can show some price action during the day today.

On Tuesday, the economic calendar offers low impact economic events that may not drive any solid movement in the market. However, the eyes will remain on the German Trade Balance, French Trade Balance, and Revised GDP figures from the Eurozone. EUR currency pairs can show some price action during the day today.

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18120 after placing a high of 1.18485 and a low of 1.18114. The EUR/USD pair dropped on Monday and extended its previous day’s losses due to decreased risk appetite and negative industrial production data from Germany. However, the change in prices was little as the U.S. financial markets were closed for the Labor Day Holiday.

The U.S. Dollar was steady on Monday with a little change in U.S. Dollar Index at 92.895 level. However, the greenback sentiment remained weak after the dovish comments from Jerome Powell on Friday that interest rates will remain lower for longer. The dollar was also steady because of the slow growth in the job sector was reported in August.

On Friday, the U.S. Department of Labor showed slow growth and increased permanent job losses as the government funding was running out. It has raised doubts about the sustainability of the economic recovery. On the Euro front, traders’ focus has shifted to the European Central Bank’s meeting on Thursday this week. As it is expected, ECB will not change policy stance, but the focus will solely remain on the message the ECB will deliver on its inflation forecasts.

The local currency Euro marked a 2-year high at the beginning of the month, and after that, the European Central Bank meeting will hold more importance. Because officials were concerned about the higher Euro prices, it would impact the exports and prices.

On the data front, at 11:00 GMT, the German Industrial Production in July decreased to 1.2% from the expected 4.5% and weighed on the local currency Euro. At 13:30 GMT, the Sentix Investor Confidence for September came in as -8.0 against the expected -11.4 and supported single currency Euro. The decreased German Industrial Production raised concerns over the economic growth and weighed on the Euro that dragged the currency pair EUR/USD on the downside.

The EUR/USD pair was down on Monday because of the European Union’s rising coronavirus cases. On Monday, Spain became the first European country to surpass 500,000 coronavirus cases after the second surge in infections caused after schools were reopened. On Tuesday, the Trade Balance from Germany and France and the Retail Sales data from Italy will be under traders’ focus for finding fresh impetus.

Daily Technical Levels

Support Pivot Resistance
1.1803 1.1826 1.1841
1.1788 1.1864
1.1764 1.1879

EUR/USD– Trading Tip

The EUR/USD is trading with a selling bias around 1.1801 level, heading lower towards the next support area of 1.1780 level. On the 4 hour timeframe, the EUR/USD may find support at 1.1780, the triple bottom level, which is extended by an upward trendline. Below this, the next support is likely to be found around the 1.1725 level.

GBP/USD – Daily Analysis

The GBP/USD failed to stop its previous session losing streak and took further offer below the 1.3150 level while represented 0.96% losses on the day mainly due broad-based U.S. dollar on-going strength, supported by the combination of factors. On the other hand, the reason behind the currency pair declines could also be associated with the rising fears of a no-deal Brexit, which joined the on-going pessimism around the Cable and contributed to the currency pair losses. At this time, the GBP/USD currency pair is trading at 1.3155 and consolidating in the range between 1.3145 – 1.3267.

The GBP currency took a hit on the 1st-day of the week manly after the British Prime Minister Boris Johnson set October 15 as the deadline for a Brexit trade agreement with the European Union, which eventually bolstered the risk of a messy end to the Brexit transition period on December 31. As per the keywords, “U.K. will be ready to trade with the E.U. on Australia type terms if no deal agreed.” He further added, “If no deal reached by October 15 with the E.U., both sides should accept this and move on. Also, fuel the fears could be the reports that the U.K. 

However, the Brexit fears played a major role in weakening the market trading sentiment as the U.S. is on the labor day holiday. Across the pond, the intensifying tensions between the U.S. and China also added a burden around the market trading sentiment. After the U.S. punished Chinese technologies and diplomats by imposing several sanctions, China’s Foreign Ministry urged the U.S. to stop abusing private companies. As per the keywords of China’s Foreign Ministry, “Without evidence, the U.S. has abused national power to take measures on Chinese companies.” This ultimately exerted downside pressure on the trading sentiment and contribute to the currency pair losses.

As in result, the broad-based U.S. dollar flashed green and took the safe-haven bids on the day amid market risk-off sentiment. However, the U.S. dollar gains could also be associated with the upbeat U.S. labor market report, which showed a decline in the unemployment rate and a rise in U.S. Treasury yields. Thus, the gains in the U.S. dollar kept the currency pair under pressure. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies rose by 0.18% to 92.882 by 12:05 AM ET (5:05 AM GMT).

 Daily Technical Levels

Support Pivot Resistance
1.3109 1.3197 1.3254
1.3052 1.3342
1.2964 1.3398

GBP/USD– Trading Tip

The GBP/USD is trading with a selling bias at 1.3125 level, set to test the support level of 1.3120 level. The Cable is trading within a downward channel, which may extend support at 1.3120 level along with resistance at 1.3186. On the downside, the GBP/USD pair may find support at 1.3051 level upon the violation of the 1.3125 level. The MACD is also supporting selling bias; therefore, we will be looking for selling trades below the 1.3165 level. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 106.227 after forming a high of 106.503 and 106.055. Overall the movement of the USD/JPY pair remained bullish throughout the day. The pair USD/JPY moved in the upward direction and posted gains on Monday. The currency pair extended its bullish streak for the 5th consecutive day despite the sow job growth in the U.S. and increasing US-China tensions.

The tensions between U.S. & China further escalated on Monday after the U.S. administration of President Donald Trump announced a ban on the usage of products made from cotton from China’s Xinjiang region. The ban was imposed against the human rights violation in Xinjiang over the forced labor on Muslim minorities.

China’s response to such a ban is yet to come, but it is expected that the latest ban would only increase the lingering tensions between both nations. These conditions helped fade the market risk sentiment and capped on additional gains in the USD/JPY pair on Monday. The greenback gathered strength against its rivals on the back of upbeat macroeconomic data released in the previous week. But the pair’s upside momentum was limited after a sharp decline in the major equity indexes in the U.S. that helped the JPY to find demand as safe-haven.

On the data front, at 10:00 GMT, the leading indicators in July rose to 86.9% compared to June’s 83.8%; it failed to impact USD/JPY’s pair prices as it came in line with the forecast. However, traders’ focus has now shifted towards the second quarter Gross Domestic Product (GDP) and Trade Balance data from Japan that will be released on Tuesday. Markets expect the Japanese economy to contract by 8.1% every quarter. Any better than expected reading would give strength to the Asian stock markets and hurt the Japanese Yen that will add further gains in USD/JPY pair.

According to Johns Hopkins University data on the coronavirus front, the total number of coronavirus cases reached 27 million on Monday. These fears kept the risk sentiment under pressure and weighed on the USD/JPY pair’s gains.

However, the risk sentiment was favored by the latest comments from Steven Mnuchin on Sunday. He said that the new stimulus measures’ details would be delivered by the end of this week. He reiterated that the new bill would provide funds to the federal government through the start of December.

The White House and Congress agreed on the same terms to extend the funding, as confirmed by Nancy Pelosi and Steven Mnuchin. The announcement came to avoid the economic shutdown as the current funding was near to expire at the end of this month. These positive comments from Mnuchin raised the risk sentiment and weighed on the Japanese Yen and pushed the USD/JPY pair higher.


Daily Technical Levels

Support Pivot Resistance
106.1100 106.2500 106.3800
105.9900 106.5100
105.8500 106.6400

USD/JPY – Trading Tips

The USD/JPY is consolidating at 106.250 area, having a resistance mark of 106.485 level. An upward crossover of 106.505 level may extend further, buying into the next resistance mark of 106.850. On the downside, the safe-haven USD/JPY currency may gain support at 106.028 and 105.628. Let’s consider taking a bullish trade over 106.028 level as the MACD and RSI also suggest neutral bias. Good luck! 

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Forex Market Analysis

Daily F.X. Analysis, September 07 – Top Trade Setups In Forex – Labor Day Holiday! 

On the news front, eyes will remain on the U.K. Halifax HPI m/m and European Sentix Investor Confidence figures, but these are hardly expected to drive any market movement today. We may experience a lack of volatility in the market amid the Labor Day holiday in the U.S.

On the news front, eyes will remain on the U.K. Halifax HPI m/m and European Sentix Investor Confidence figures, but these are hardly expected to drive any market movement today. We may experience a lack of volatility in the market amid the Labor Day holiday in the U.S.

On the news front, eyes will remain on the U.K. Halifax HPI m/m and European Sentix Investor Confidence figures, but these are hardly expected to drive any market movement today. We may experience a lack of volatility in the market amid the Labor Day holiday in the U.S.

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18370 after placing a high of 1.18652 and a low of 1.17806. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD pair dropped on Friday amid the broad-based U.S. dollar strength against Euro as the tensions rose in the market that ECB was uncomfortable with the Euro rise. Another reason included in the fall of the currency pair was the strong US Jobs data and weak German Factory Orders. The decreasing risk sentiment due to increased US-China tensions and the rising number of coronavirus also added in the losses of the EUR/USD pair on Friday.

On Thursday, the U.S. dollar extended its gains as investors started to sell Euro against it because the European Central Bank was worried about the rising prices of local currency. This pushed the U.S. dollar 1.3% upside down the 28-month low level that it hit on Tuesday.

Earlier this week, the Euro touched 1.20 level, and the worries increased in the market that the rise in prices had come too fast and strong for the ECB to like it. These concerns were even confirmed by the ECB policymakers that reportedly warned that if the Euro kept increasing, it would weigh on the exports and drag down the prices and eventually increase the need for more monetary stimulus. These concerns also followed the remarks from ECB Chief Economist Philip Lane, who said that the exchange rate does matter for the monetary policy. It weighed on Euro and ultimately dragged the EUR/USD pair on the downside.

On the data side, the German Factory Orders in July were released at 11:00 GMT that decreased to 2.8% from the projected 5.1% and weighed on Euro that added pressure on EUR/USD pair. At 11:45 GMT, the French Government Budget Balance in July reported a deficit of -151.0B compared to June’s 124.9B.

From the U.S. side, the Average Hourly Earnings in August was increased to 0.4% from the forecasted 0.0% and supported the U.S. dollar. The Non-Farm Employment Change remained flat with the expectations of 1371K. In August, the Unemployment Rate also dropped to 8.4% against the forecasted 9.8% and supported the U.S. dollar that added further pressure on EUR/USD pair.

Furthermore, the fading risk sentiment also added in the EUR/USD pair’s losses as the escalating US-China tensions weighed on market sentiment. The Chinese government stopped renewing press credentials for foreign journalists working for American press organizations in China. China has also said that it will proceed with removals if the Trump administration takes any further action against Chinese media employees in the U.S.

Meanwhile, the coronavirus cases in Europe rose again and jumped back to the figures recorded in mid-March, the time of disease peak across the continent. Spain saw the highest daily cases since April and recorded 8959 cases in just 24 hours. Spain is one of the hardest-hit European countries by the coronavirus pandemic, with 488,513 cases. These pandemic related tensions also kept the risk sentiment under pressure that weighed on local currency and added the EUR/USD pair’s losses.

Daily Technical Levels

Support Pivot Resistance
1.1828 1.1838 1.1844
1.1821 1.1855
1.1811 1.1861

EUR/USD– Trading Tip

The EUR/USD bounced off over the support level of 1.1795, and now it’s heading further higher until the next target of 1.1890. The pair may find an immediate resistance at 1.1860 level. Conversely, the EUR/USD may find support at 1.1808 and 1.1780 levels. We can expect choppy trading today amid U.S. bank holidays in the wake of labor day. Neutral bias prevails in the market today.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.32820 after placing a high of 1.33189 and a low of 1.31754. Overall the movement of the GBP/USD pair remained flat throughout the day. The GBP/USD pair dropped to 6-days lowest level on Friday after the release of dismal PMI data from Britain and more stimulus hopes from the U.K. Another factor involved in the GBP/USD pair’s downward momentum was the increased risks of no-deal Brexit.

On Friday, the British Pound fell and posted weekly losses for the first time in the month as experts warned that any potential recovery could get limited by the threats of no-deal Brexit. The recent success of the British Pound was partly due to the U.K. government’s success in preventing a second wave of coronavirus. However, the fears that the virus could return and could persist for a very long period as long as it is not contained in Europe weighed on GBP. The number of cases in European countries increased day by day, and it has also kept the GBP/USD pair.

Furthermore, the end of the Brexit transition period is near, and it has also brought the risk of a no-deal Brexit more into focus. No-deal has been reached so far, and in case of no-deal, the U.K. would trade with the E.U. on World Trade Organization rules from next year onward. It could affect both sides in real economic terms but above all for the British economy. It is because the European Union is the largest trading partner of the United Kingdom. These Brexit tensions also weighed on local currency and kept the GBP/USD pair under pressure on Friday.

Meanwhile, the monetary policy also offered reasons for caution on the British Pound after the Bank of England monetary policy committee members, including Governor Andrew Bailey, suggested negative interest rates could have a role play in the recovery of the economy. These dovish comments from BoE’s governor weighed on the local currency that dragged the pair GBP/USD towards the six days lowest level at the ending day of the week.

On the data front, at 13:30 GMT, the Construction PMI from Great Britain in August reported a decline to 54.6 from the anticipated 58.5 and weighed on the Sterling that ultimately weighed on GBP/USD pair. Whereas from the U.S. side, the Unemployment rate decreased to 8.4% from the projected 9.8%, and the Average Hourly Earnings rose to 0.4% against the estimated 0.0% and supported the U.S. dollar.

The weak Sterling and the strong Greenback played an important role in pushing the GBP/USD pair downward. Furthermore, On Friday, the interest-rate-setter of Bank of England, Micheal Saunders, said that it was possible that more stimulus would be needed for the U.K.’s economy that has been hit by the pandemic. This need for more stimulus confirmed by an official BoE’s member raised the concerns of recovery and weighed on the local currency and added pressure on GBP/USD pair.

 Daily Technical Levels

Support Pivot Resistance
1.3231 1.3257 1.3274
1.3214 1.3300
1.3188 1.3317

GBP/USD– Trading Tip

The GBP/USD is trading with a selling bias at 1.3205 level, set to test the support level of 1.3168 level. The Cable is trading within a downward channel, which may extend support at 1.3175 level along with resistance at 1.3265. On the downside, the GBP/USD pair may find support at 1.3086 level upon the violation of the 1.3172 level. The MACD is also supporting selling bias; therefore, we will be looking for selling trades below the 1.3250 level. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 106.184 after placing a high of 106.551 and a low of 106.000. Overall the movement of the USD/JPY remained flat yet bullish throughout the day. The USD/JPY pair extended its bullish streak for the 4th consecutive day and rose to a high of 106.5 level on Thursday on positive U.S. jobless claims and services PMI data. However, the pair failed to remain higher and lost most of its daily gains in the late session as the Japanese Yen found demand as a safe-haven.

The U.S. stock market slipped sharply during last week, with S&P 500 and the Nasdaq Composite indexes down by 3.5% and 5.05%. The fall in equities was caused by the lack of progress in the next coronavirus stimulus package by the U.S. government and overdue correction.

Moreover, the US-Treasury yields for the 10-year note lost almost 5%, and the U.S. Dollar Index stayed in the positive territory near 92.8 level as the greenback continued to perform higher against its risk-sensitive rival currencies and helped the USD/JPY to limit its fall in the second session.

On the data front, at 17:30 GMT, the Unemployment Claims from last week were dropped to 881K from the projected 955K and supported the U.S. dollar that added further gains in the USD/JPY pair. 

The Revised Non-farm Productivity for the quarter raised to 10.1% from the forecasted 7.3% and weighed on the U.S. dollar. The Revised Unit Labor Costs for the quarter declined to 9.0% from the anticipated 12.0% and pressured on the U.S. dollar. The Trade Balance in July showed a deficit of 63.6B against the expectations of 58,2B deficit and weighed on the U.S. dollar. At 18:45 GMT, the Final Services PMI for August rose to 55.0 from the expected 54.8 and supported the U.S. dollar that added strength in the USD/JPY pair. At 19:00 GMT, the ISM Non-Manufacturing PMI remained flat with the expectations of 47.0 and had almost no effect on the U.S. dollar.

The decrease in Unemployment claim benefits and rise in Final Services PMI gave a push to U.S. dollar and USD/JPY pair gains on Thursday.

On the coronavirus front, 25.8 million people have been reported to be diagnosed from coronavirus globally. Almost 17 million people have been reported to be recovered, while more than 850,000 have reported as dead. On Wednesday, after easing the pandemic restrictions, India reported more than 78000 cases in a single day and surpassed the U.S. for a daily case record of coronavirus.

Australia saw the biggest drop in GDP for the quarter and was pushed into recession for the first time since 1991 amid a pandemic crisis and its effect on the economy. These lingering concerns over the coronavirus kept the safe-haven demand for Japanese yen on board and limited the USD/JPY pair’s gains.


Daily Technical Levels

Support Pivot Resistance
106.2400 106.2800 106.3500
106.1700 106.3900
106.1300 106.4600

USD/JPY – Trading Tips

The USD/JPY is consolidating at 106.250 area, having a resistance mark of 106.485 level. An upward crossover of 106.505 level may extend further, buying into the next resistance mark of 106.850. On the downside, the safe-haven USD/JPY currency may gain support at 106.028 and 105.628. Let’s consider taking a bullish trade over 106.028 level as the MACD and RSI also suggest neutral bias. Good luck! 

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Forex Market Analysis

Daily F.X. Analysis, August 28 – Top Trade Setups In Forex – U.S. Fed Chair Powell Speaks! 

On the news front, the economic calendar is due to a report series of CPI and GDP figures from the European economy. These events are expected to be overshadowed by the U.S. Personal Pending, Chicago PMI, and Revised UoM Consumer Sentiment, which are expected to slightly worse than beforehand. This may add further bearish bias for the U.S. dollar today.

On the news front, the economic calendar is due to a report series of CPI and GDP figures from the European economy. These events are expected to be overshadowed by the U.S. Personal Pending, Chicago PMI, and Revised UoM Consumer Sentiment, which are expected to slightly worse than beforehand. This may add further bearish bias for the U.S. dollar today.

On the news front, the economic calendar is due to a report series of CPI and GDP figures from the European economy. These events are expected to be overshadowed by the U.S. Personal Pending, Chicago PMI, and Revised UoM Consumer Sentiment, which are expected to slightly worse than beforehand. This may add further bearish bias for the U.S. dollar today.

Economic Events to Watch Today  

 

 

EUR/USD – Daily Analysis

During the Thursday’s Asian trading hours, the EUR/USD currency pair managed to extend its previous session gaining streak and still flashing green while taking round near 1.1830/40 level mainly due to the broad-based U.S. dollar selling bias, in the wake of cautious sentiment around the market ahead of the U.S. Federal Reserve (Fed) Chair Jerome Powell’s speech. On the contrary, the buying interest around the shared currency is declining on the day amid the intensifying virus fugues in Europe, which eventually becomes the key factor that has been capped further upside in the currency pair. 

At the moment, the EUR/USD currency pair is currently trading at 1.1835 and consolidating in the range between the 1.1817 – 1.1850. However, the traders are cautious about placing any strong position ahead of week’s Jackson Hole conferences where Federal Reserve’s (Fed) President Jerome Powell will speak about the central bank’s long-awaited monetary policy framework review, which will focus on inflation. 

Despite the upbeat U.S. and China data, the equity market has been declining since the day started amid the renewed concerns over the US-China relation. At the US-China front, the Trump administration sanctioned those companies who are helping China to mark its existence in the South China Sea. In contrast, China fired missiles in a military drill near the South China Sea. 

At the USD front, the broad-based U.S. dollar failed to gain any positive traction on the day. However, the losses could be associated with the doubts about the U.S. economic recovery ahead of Fed Chairman Jerome Powell’s speech at Thursday’s Jackson Hole symposium themed. However, the losses in the U.S. dollar became the key factor that kept the currency pair’s higher. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies dropped by 0.12% to 92.882 by 11:59 PM ET (4:59 AM GMT).

At the coronavirus front, the coronavirus cases grew to 236,429, with a total of 9,280 deaths toll, according to the German disease and epidemic control center, Robert Koch Institute (RKI) report. In the meantime, the cases rose by 1,576 in Germany yesterday against Monday’s +1278. Whereas the death toll also grew by 3. It is worth mentioning that Germany recorded its highest number of new COVID-19 cases during the weekend in almost 4-months. As a result, they undermined the bullish sentiment around shared currency and held the currency pair between the thin range.

Daily Technical Levels

Support Pivot Resistance
1.1754 1.1828 1.1894
1.1689 1.1967
1.1615 1.2033

 EUR/USD– Trading Tip

The EUR/USD is trading slightly bullish at 1.1851, crossing over the resistance level of 1.1849 level. On the lower side, the EUR/USD may find support at 1.1830, while a bearish breakout of 1.1830 level can trigger selling until 1.1800 level. In case of a bullish breakout, the EUR/USD pair may begin further buying trends until 1.1880 and 1.1945 levels.

GBP/USD – Daily Analysis

The GBP/USD stimulates the daily high to 1.3242, up 0.29%, while directing into the European session open. Like major pairs, the Cable restored the yearly high on Thursday ere dipping to 1.3161, which caught the two-day winning streak. After remarks from Fed Chair, the broad U.S. dollar rally pulled the quote descending the prior day. 

The greenback’s latest drops support the pair bulls before BOE Governor Andrew Bailey’s address at the Jackson Hole Symposium. While running the third bullish day in the previous four, the GBP/USD prices also spend tiny heed to the Brexit distress indicated by The Times.

The final scheduled round of post-Brexit trade negotiations between the E.U. and the U.K. have already been abandoned, but ministers are expected to appear next week. Additionally, Germany’s expulsion of Brexit discussions as agenda from next week’s critical talks amongst the E.U. representatives.

Subsequently, the uproar girdling insect repellent ingredient defending against the coronavirus (COVID-19) and 21-day immunity plan represented a mild enthusiasm at home. The sentiment overlooks the biggest daily COVID-19 problems while producing 1,522 numbers for Thursday.

On the other hand, U.S. President Donald Trump addressed to end dependence on China “once and for all.” Besides, the mystic concepts of Fed Chair Powell, involving Average Inflation Targeting (AIT), appear to decrease the allure as markets start reading between the words and spot economic worries.

 Daily Technical Levels

Support Pivot Resistance
1.3145 1.3215 1.3268
1.3092 1.3338
1.3022 1.3391

 GBP/USD– Trading Tip

The GBP/USD has distributed the trading range of 1.3240 – 1.3180, and a bullish breakout of Cable is anticipated to lead it higher unto 1.3275 mark. On the higher side, the GBP/USD faces the next resistance at 1.3275 mark and over this level, the pair may find 1.3323 resistance. Speaking about the technical side of the market, 50 periods of EMA, RSI, and MACD suggest bullish bias in the GBP/USD pair. Today, let’s look for buying trades above 1.3275 level.

USD/JPY – Daily Analysis

During Thursday’s early European trading session, the USD/JPY currency pair managed to stop its early-day losing streak and took modest bids near above 106.00 level mainly after the (BOJ) board member Hitoshi Suzuki expressing his take on the monetary policy outlook, which eventually undermined the Japanese yen and extended some support to the currency pair. 

 Meanwhile, the risk-off market sentiment, driven by the renewed US-China tussle and intensifying virus cases in Europe and Asia, tends to underpin the safe-haven Japanese yen and kept the currency pair sidelined. At this moment, the USD/JPY currency pair is currently trading at 106.02 and consolidating in the range between 105.81 – 106.08.

It is worth reporting that the Bank of Japan (BOJ) board member Hitoshi Suzuki expressed his part on the monetary policy outlook while saying that “Will ease monetary policy further without hesitation with an eye on the pandemic impact on the economy. “He also added that “If BOJ were to ease more, it could use a special program for combating pandemic, cut short-, long-term interest rates or ramp up risky asset buying.” However, these statements recently weakened the Japanese yen and provided little support to the currency pair. 

Apart from this, the Takatoshi Ito, a famous economist who was once a preferred nominee to become Bank of Japan (BOJ) governor, stated that the Japanese economy could see a quicker recovery by 2022 if a vaccine becomes available. However, the currency pair failed to give any major attention to the above headlines, as it remains flat around 106.00 due to the cautious risk tone and weaker greenback ahead of the Fed Chair Powell’s Jackson Hole speech.

Across the pond, the failure of the American lawmakers to offer any hint on the big coronavirus (COVID-19) relief package or the highest COVID-19 new cases in Italy since May, not to forget the fresh US-China tussle over the South China Sea, all factors are weighing on the market trading sentiment, which could be considered as the main factors for the currency pair limited moves. 

At the US-China front, the Trump administration plans sanctions on those companies who are helping China to mark its existence in the South China Sea. At the same time, China fired missiles in a military drill near the South China Sea. The U.S. Secretary of State Michael Pompeo criticized China for “coercive bullying tactics against our friends in the United Kingdom.” This also exerted a burden on the market trading sentiment. This, in turn, underpinned the safe-haven Japanese yen demand and capped upside momentum in the pair.

Despite the risk-off market sentiment, the broad-based U.S. dollar failed to gain any positive traction on the day, as well as the losses could be associated with the doubts about the U.S. economic recovery ahead of Fed Chairman Jerome Powell’s speech at Thursday’s Jackson Hole symposium themed. However, the losses in the U.S. dollar became the key factor that kept the currency pair’s gain limited. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies dropped by 0.12% to 92.882 by 11:59 PM ET (4:59 AM GMT).

Looking forward, the market traders await the Federal Reserve Chairman Jerome Powell’s speech in the Jackson Hole Symposium. As well as, America’s preliminary readings of the second quarter (Q2) GDP, which is expected -32.5% versus -32.9% will be key to watch. In the meantime, the updates surrounding the fresh Sino-US tussle, this time over the South China Sea, as well as the coronavirus (COVID-19) updates, could not lose their significance.


Daily Technical Levels

Support Pivot Resistance
105.8700 106.2900 106.9700
105.1800 107.4000
104.7600 108.0800

USD/JPY – Trading Tips

The USD/JPY is trading bearish at 106.082 level, holding above a support level of 106, which is extended by upward channel. On the higher side, the USD/JPY expected to gain an immediate resistance around 106.566 and 107.078. Looking at the 2-hour timeframe, the 50 periods EMA is extending resistance at 106.350. Likewise, the MACD and RSI are staying in a bearish zone, beneath 50 and 0, sequentially. The USD/JPY may trade bearish below 106.350 to target 106 and 105.800. Good luck! 

 

Categories
Forex Market Analysis

Daily F.X. Analysis, August 17 – Top Trade Setups In Forex – Eyes Technical Levels! 

On the news front, the market isn’t offering any high impact on market-moving fundamentals. Therefore, we have to focus on the market’s technical side to drive further movements in the market.

On the news front, the market isn’t offering any high impact on market-moving fundamentals. Therefore, we have to focus on the market’s technical side to drive further movements in the market.

On the news front, the market isn’t offering any high impact on market-moving fundamentals. Therefore, we have to focus on the market’s technical side to drive further movements in the market.

Economic Events to Watch Today   

 

EUR/USD – Daily Analysis

The EUR/USD pair closed at 1.18409 after placing a high of 1.18503 and a low of 1.17815. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD pair on Friday remained in a tight range in European trading hours after the release of GDP figure from the Eurozone, and in American trading session, it started to post gains and ended its day on a positive note.

At 11:45 GMT, the French Final CPI in July remained flat with the expectations of 0.4%. At 14:00 GMT, the Flash Employment Change in the second quarter was recorded as -2.8%, and the Flash GDP in the second quarter fell as expected -12.1%. The Trade Balance from Europe in June declined to 17.1B from the forecasted 18.0 B and weighed on single currency Euro.

The GDP data confirmed the fears and dropped by 12.1% showed the biggest contraction since the quarterly GDP calculation began in 1970 for Germany. It was even more pronounced than during the financial market and economic crisis. The macroeconomic data from Europe weighed on EUR and dragged the pair EUR/USD with itself.

The U.S. Dollar held steady against its rival currency as positive risk sentiment continues to weigh on the safe-haven greenback. The Core Retail Sales in July increased to 1.9% from the forecasted 1.3% and supported the U.S. dollar. At the same time, the Retail Sales data declined to 1.2% against the expected 2.0% and weighed on the U.S. dollar.

In August, the Prelim UoM Consumer Sentiment increased to 72.8 against the forecasted 72.0 and supported the U.S. dollar. The data failed to provide any significant trend to the pair, however as the consumer sentiment improved, the U.S. dollar started to pick up its pace against its rival currencies.

Meanwhile, the delay in the release of the next U.S. Stimulus aid package was getting longer day by day. It raised concerns as President Donald Trump accused that U.S. Congressional Democrats had refused to negotiate on the next bill. The pair was also higher on Friday as the risk sentiment improved ahead of the US-China trade deal review meeting scheduled for August 15.

Furthermore, the U.S. Dollar was higher on the ground as the 10-year U.S. Treasury rose continuously from past days. At the same time, the Euro was under pressure because of the massive selling bias in Turkish lira from recent weeks. The Euro underperformed during the lira crisis in 2018, and downside risks suggest that Euro might face sell-off if history was repeated.

The upcoming week will bring the minutes from both the U.S. Federal Reserve and the European Central Bank. Meanwhile, the pair will continue to follow the global risk sentiment; any progress in trade-deal will be beneficial for EUR/USD pair; however, if any tension arises and the US-China issue continues to escalate, the greenback could rise against its counterpart as a safe-haven asset.

Daily Technical Levels

Support Pivot Resistance
1.1745 1.1805 1.1900
1.1650 1.1960
1.1591 1.2054

EUR/USD– Trading Tip

The EUR/USD is facing resistance at 1.1865 level, which is extended by a double top level. Below this, the EUR/USD can extend selling bias until 1.1820 and 1.1782 level. However, the bullish breakout of the 1.1865 level can continue selling until 1.1908. On the hourly timeframe, the EUR/USD has formed an ascending triangle pattern, which may extend resistance at 1.1866 level. The closing of candles beneath this level is expected to drive selling bias until the 1.1819 level. Let’s keep an eye on 1.1866 level to stay bullish above and bearish below this level today. 

GBP/USD – Daily Analysis

The GBP/USD closed at 1.30824 after placing a high of 1.31426 and a low of 1.30452. Overall the movement of GBP/USD pair remained bullish throughout the day. The GBP/USD pair struggled to hold gains as both the U.S. dollar and Sterling has gloomy outlook. Both the U.S. & U.K. economies have suffered from the coronavirus pandemic, and the outlook of GBP/USD pair suggests that it was dominated by the pandemic induced gloomy economic condition.

This week, the GBP/USD pair has jumped between highs of 1.32123 and lows of 1.3007. The high was not too far from the previous week’s high of 1.3176, that was the best level for the GBP/USD pair in six months.

We can say that the GBP/USD pair has managed to sustain the impressive July gains; however, further gains seem unlikely. As the negotiations between the U.K. and Japan came to a halt this week. This came in after U.K. pretended to have better trade conditions than those it had as part of the E.U. Another factor weighed on U.K. currency this week was the biggest contraction in the U.K.’s economy in the second quarter by 20.4%.

The contraction was derived as a terrible consequence of the coronavirus induced lockdown measures. The U.K. government is still struggling with the reopening schedule, and PM Boris Johnson has pledged to open schools from next month.

As worries of the second loop of coronavirus worsened across the globe, the concerns raised over the question of how the government would react. There are speculations that if Britain’s coronavirus situation does not improve, the whole nation could see continuous lockdown.

On Brexit front, although both countries E.U. and the U.K. remain far apart on several crucial issues, Britain’s chief negotiator David Frost said on Thursday that a Brexit deal could be reached in September.

The next round of the talks between both countries will take place on August 18, and comments from both sides suggested that they remain committed to reaching a deal. This has been supportive of Sterling, and hence GBP/USD raised.

Meanwhile, on the data front, there was no data to be released from Great Britain, and as for the U.S., the Retail Sales dropped to 1.2% from the expected 2.0% in July and weighed on the U.S. dollar.

The Core Retail Sales, however, improved to 1.9% in July against the anticipated 1.3% and supported the U.S. dollar. The Prelim UoM Consumer Sentiment also raised to 72.8 points against the expected 72 and supported the U.S. dollar that kept the gains in GBP/USD pair limited on Friday. The risk sentiment also supported the GBP/USD pair on Friday as the traders were cautious ahead of the US-China trade deal review meeting scheduled to be released on August 15.

Daily Technical Levels

Support Pivot Resistance
1.3010 1.3077 1.3150
1.2938 1.3216
1.2871 1.3289

GBP/USD– Trading Tip

The GBP/USD is trading at 1.3106 level, holding above the 50 periods EMA support level 1.3080. The bearish breakout of the 1.3080 support level can extend selling unto 1.3019 level. The upward channel also supports the GBPUSD at 1.3080, which provides resistance at 1.3134 level. The GBP/USD should confer a bearish crossover of 1.3082 level confirm a strong selling bias in the Cable until then; we should wait and watch. On the higher side, Sterling may find resistance at 1.3175 and 1.3224. Let’s consider selling below 1.3080 and buying over the same with minor stop loss. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 106.573 after placing a high of 107.036 and a low of 106.433. Overall the movement of the USD/JPY pair remained bearish throughout the day. The U.S. Congress has failed to boost the economy and health care system, and it caused the U.S. President Donald Trump on Friday to stress for a coronavirus aid package. Trump pushed for state and local government aid and assistance regarding rental payments, more direct payments, and small business loans.

On the US-China front, both countries have delayed a review of their phase-1 trade deal that was initially scheduled for August 15. U.S. granted this time to China to increase the purchases of U.S. exports. The meeting was scheduled to take place on Saturday at the six-month anniversary of the phase one trade deal. The deal took its effect from February 15 as the global spread of coronavirus pandemic started.

On Friday, US President Donald Trump told us that the trade deal was intact and doing very well, but he did not mention anything about the delay in the review meeting. According to some sources familiar with the plans, the U.S. wanted to give more time to China to increase the purchases of the U.S. farm products that were part of the agreed deal. America’s favor given to China was provided to increase the review’s political optics as the U.S. Presidential elections were near.

On the negative side, there was news that Trump has said in a news conference that he was looking at banning other China-owned companies like Alibaba. This raised the fears of renewed conflicts and weighed on the market sentiment that dragged the USD/JPY pair on the downside.

Meanwhile, the Chinese Vice Foreign Minister Zheng Zeguang said that the relationship between the U.S. and China was at a critical juncture, and efforts should be made from both sides to maintain and stabilize the bilateral ties between both nations.

On the data front, at 09:30 GMT, the Tertiary Industry Activity in June from Japan rose to 7.9% from the forecasted 6.4% and supported the Japanese Yen that contributed to USD/JPY pair’s losses of the day.

At 17:30 GMT, the Core Retail Sales in July from the U.S. rose to 1.9% from the forecasted 1.3% and supported the U.S. dollar. At the same time, the Retail Sales in July dropped to 1.2% from the anticipated 2.0% and weighed on the U.S. dollar.

The core retail sales data exclude automobile sales that include about 20% of the retail sales data. The positive core retail sales and negative retail sales indicated that the automobile sector had suffered more than other sectors. The Prelim Nonfarm Productivity for the second quarter raised to 7.3% from the anticipated 1.5% and weighed on the U.S. dollar. The Prelim Unit Labor Cost for the second quarter rose to 12.2% against the forecasted 6.5% and supported the U.S. dollar.

At 18:15 GMT, the Capacity Utilization Rate also increased to 70.6% from the expected 70.3% and supported the U.S. dollar. The Industrial Production in July dropped to 3.0% from the anticipated 3.1% and weighed on the U.S. dollar. At 19:00 GMT, the Prelim UoM Consumer Sentiment in August rose to 72.8 from the anticipated 72.0 and supported the U.S. dollar. However, the Business Inventories in June came in as expected -1.1%. The Prelim UoM Inflation Expectations in August also remained flat at 3.0%.

After the release of U.S. economic data on Friday, the U.S. Dollar Index that rose to 93.40 earlier in the day, lost its traction and fell by 0.15% to 93.10 level. This weighed on USD/JPY pair, and the pair started to post losses on the day.

Daily Technical Levels

Support Pivot Resistance
105.8400 106.4500 107.1900
105.1000 107.8000
104.4900 108.5500

USD/JPY – Trading Tips

The USD/JPY consolidates in a sideways range, holding over resistance to become a support level of 106.428 level. Over this level, the USD/JPY is opening further room for buying until 107.450 level, but below this, the USD/JPY pair can trigger sharp selling until 105.752. The RSI and MACD are also supporting bearish bias in the pair. The current market price (CMP) of USDJPY is holding above 50 EMA, which extends support at 106.484 and may push the pair higher. Let’s consider buying above 106.480 level and selling below the same today. Good luck! 

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Forex Market Analysis

Daily F.X. Analysis, April 14 – Top Trade Setups In Forex – Eyes on G7 Meeting via Satellite! 

On the forex front, the U.S. Dollar Index was little changed at 99.49 amid thin holiday trading. The economic calendar is a bit muted, but the only focus today will be on the U.S. Labor Department will release the March import price index (-3.2% on month expected). 

On the forex front, the U.S. Dollar Index was little changed at 99.49 amid thin holiday trading. The economic calendar is a bit muted, but the only focus today will be on the U.S. Labor Department will release the March import price index (-3.2% on month expected). 

On the forex front, the U.S. Dollar Index was little changed at 99.49 amid thin holiday trading. The economic calendar is a bit muted, but the only focus today will be on the U.S. Labor Department will release the March import price index (-3.2% on month expected). 

Economic Events to Watch Today     

 

 

EUR/USD – Daily Analysis

The EUR/USD found bids and crossed above 1.09 level while representing 0.37% gains, mainly due to the recent broad-based U.S. dollar weakness after risk recovery in the market sentiment in the wake of fresh measured optimism about coronavirus outbreak. 

The fresh uptick in the oil prices and above-forecast China trade data also helping restore the risk-sentiment. At the moment, the EUR/USD is trading at 1.0941 and consolidates in the range between the 1.0893 – 1.0967.

At the coronavirus front, Australia has shown very sharp declines in the virus cases as compared to other countries and also registered declines in the death toll as per the latest report. Meanwhile, India’s flow is starting to drop, as the growth rate of new cases has consecutively declined after April 6. Moreover, the discussion of easing restrictions on activity is taking attention in the U.S. and other parts of the world. 

On the other hand, the above-forecast China trade data, especially imports, which registered a growth of 2.4%, contradicting expectations for a 2.4% decline, and the uptick in the crude oil prices, is helping improve the risk sentiment. 

The EUR currency got supported by multiple factors, the figures of newly infected peoples and death toll showing a sign slowing down across the hotspots in Europe and boosted the sentient around the shared currency. The Eurogroup has reached a half a trillion euros virus rescue package gave further support to the common currency bulls.

Looking forward, the USD moves and virus updates will continue to play an important role. Traders will keep their eyes on the G7 meeting for the fresh trading sentiment.

Daily Support and Resistance

  • S1 1.0772
  • S2 1.0847
  • S3 1.0877
  • Pivot Point 1.0923
  • R1 1.0953
  • R2 1.0998
  • R3 1.1073

EUR/USD– Trading Tips

Last week, the EUR/USD violated the asymmetric triangle pattern, which has lead the EUR/USD prices further higher towards the next resistance level of 1.09299 area. The long-held trading range of 1.0922 – 1.0765 as it’s been already violated, and now the pair is holding above this level. 

At this moment, the EUR/USD is holding at 1.09320, having an immediate support level of around 1.09060, where the bearish breakout of this level can extend selling until the next support level of 1.0846 and 1.07990. Conversely, the resistance stays at 1.0970 and 1.1035. The MACD is tossing above and below 0, converting the bearish sentiment into bullish and vice versa. Let’s consider staying bullish over 1.0960 today. 

GBP/USD– Daily Analysis

Today in the Asian trading hours, the GBP/USD currency pair found bids and hit the monthly high near above 1.2550, mainly due to fresh declines in the broad-based U.S. dollar in the wake of risk-on market sentiment. As well as, the latest statement that the UK PM Boris Johnson has discharged from the hospital and still recovering from coronavirus, this news also helped the pairs quote. The GBP/USD currency pair is currently trading at 1.2568 and consolidates in the range between the 1.2504 – 1.2574. However, the currency pair traders did not give any major attention to the coronavirus (COVID-19) crisis at home because the cases are comparatively larger in the U.S.

At the U.K. Crisis front, the United Kingdoms’ coronavirus death toll rose above 11,000, but the buyers are ignoring this probably because the death toll is comparatively larger in the U.S. almost 20,000 deaths have been registered so far.

On the other hand, the reason behind the pair’s bullish moves could also be the UK PM Boris Johnson’s health recovery as Johnson left the hospital. Though, The Guardian relied on his spokesman to say that He is “focusing on recovery.”

On the negative side, there are many chances to extend the U.K. lockdown for another month. Sir Patrick Vallance, Government Chief Scientific Adviser, said that the deaths toll from coronavirus could continue to rise this week or that could last for up to 3-weeks. It is worth mentioning that Chris Hopson, chief executive of NHS (National Health Services) Providers, indicates the lack of medical supplies.

Daily Support and Resistance    

  • S1 1.2366
  • S2 1.2436
  • S3 1.2474
  • Pivot Point 1.2505
  • R1 1.2544
  • R2 1.2575
  • R3 1.2645

GBP/USD– Trading Tip

The GBP/USD is trading with a bullish bias over 1.2500 to trade around 1.2496 but still holds within a sideways channel. The GBP/USD sideways channel has already been violated as the GBP/USD is holding around 1.2520 and along with resistance around 1.2770. Considering the weakness in the U.S. dollar, the chances of selling remains low, but the bullish bias remains solid over 1.2500 level. 

Since the resistance level of 1.2500 has already been violated, we may see GBP/USD prices going towards the next resistance level of 1.2720. The MACD and 50 EMA are also supporting the bullish bias, so let’s consider taking buying trades over 1.2432 with a target of 1.2500 first and then buying over 1.2500 to target 1.2610. 

USD/JPY – Daily Analysis

 the USD/JPY currency pair failed to continue its winning moves and dropped to 2-weeks low near the 107.53, mainly due to the fresh losses in the broad-based U.S. dollar in the wake of risk-on market sentiment. On the flip side, the risk-on market sentiment also weakened the Japanese yen and helped limit the downside in the currency pair, at least for the time being. 

The USD/JPY is trading at 107.69 and consolidates in the range between the 107.53 – 107.81. The reason behind the global risk-on market sentiment could also be better-than-expected Chinse trade data, which keeps the U.S. dollar U.S.wer and provided the goodish boost to the riskier currencies.

At the data front, the data showed China’s exports improved in March and fell 6-6% YoY as compared to a 17.2% slide in the previous month. Moreover, imports reversed the previous month’s decline and rose 2.4% during the reported month.

While the futures on the S&P 500 are representing a 1.27% gain at press time and the U.S. dollar U.S.ntinues to lose its momentum across the board. The dollar index, which measures the worth of the greenback against majors, is reporting a 0.30% drop. 

Daily Support and Resistance    

  • S1 106.59
  • S2 107.18
  • S3 107.46
  • Pivot Point 107.77
  • R1 108.05
  • R2 108.36
  • R3 108.95

USD/JPY – Trading Tips

The USD/JPY is trading with a bearish bias, and it is pretty much likely to find support around the triple bottom area of 107.039. A bearish breakout of this level can extend selling until 105.300. While the resistance holds around 108.640. The MACD and 50 periods of EMA are suggesting bearish bias, while the fundamentals side is also in favor of selling. Since we don’t have any major fundamental coming out shortly, traders will focus on the technical side and levels. Hence, we should look for selling trades below 108 to target 107.030 today.  

All the best for today! 

Categories
Forex Market Analysis

Daily F.X. Analysis, March 31 – Top Trade Setups In Forex – Consumer Confidence Under Spotlight! 

On Tuesday, the market is mostly focusing on the major and medium impact economic events due to come out from the Eurozone and the United States. In the U.S., the Conference Board will publish March Consumer Confidence Index (110.0 expected). The Market News International will release March Chicago PMI (40.0 expected). S.P./Case-Shiller will report the 20-City Composite Home Price Index for January (+0.4% on month expected). 

On Tuesday, the market is mostly focusing on the major and medium impact economic events due to come out from the Eurozone and the United States. In the U.S., the Conference Board will publish March Consumer Confidence Index (110.0 expected). The Market News International will release March Chicago PMI (40.0 expected). S.P./Case-Shiller will report the 20-City Composite Home Price Index for January (+0.4% on month expected). 

On Tuesday, the market is mostly focusing on the major and medium impact economic events due to come out from the Eurozone and the United States. In the U.S., the Conference Board will publish March Consumer Confidence Index (110.0 expected). The Market News International will release March Chicago PMI (40.0 expected). S.P./Case-Shiller will report the 20-City Composite Home Price Index for January (+0.4% on month expected). 

Economic Events to Watch Today     

 

 

EUR/USD – Daily Analysis

The EUR/USD retreated 1.0% to 1.1029, snapping a five-day rally. Official data revealed that the eurozone’s Economic Confidence Index slid to 94.5 in March (91.6 expected) from 103.4 in February. 

Later today, the eurozone’s March CPI (+0.6% on-year estimated) and German jobless rate (5.1% expected, 5.0% in February) will be reported. The global equities recovered last week, as in result, the greenback weakened its bid tone and helped EUR/USD rise from 1.0636 to 1.1148. 

That was mainly due to the U.S. Federal Reserve declaring an open-ended asset purchase program, and the U.S. Senate passed a special $2 trillion fiscal relief package. 

Italy marked as the second-highest country of confirmed cases in the world after the United States (105,470). Total cases are 92,472 confirmed, marking up the highest death rate in the world. 

The eyes will be on the risk market sentiment, which could turn pro-risk, as the China data released in Asia showed the manufacturing activity recovered sharply to above-50 levels or expansion territory.

The risk-on rally could weaken the safe-haven demand for the U.S. dollar and send EUR/USD higher. On the data front, the German Import Price Index for February and the Unemployment Rate is scheduled to release with the preliminary Eurozone Consumer Price Index for March. Besides this, the U.S. Consumer Confidence and the Chicago Purchasing Managers’ Index are also scheduled to release.

Daily Support and Resistance   

  • S1 1.0862
  • S2 1.0958
  • S3 1.1002

Pivot Point 1.1054

  • R1 1.1099
  • R2 1.1151
  • R3 1.1247

EUR/USD– Trading Tips

Technically, the EUR/USD is trading slightly bearish at 1.099, having an immediate support level of around 1.0947. The major currency pair has formed a bullish channel which is supporting the EUR/USD pair around 1.1060, and below this, the next support is likely to be found around 1.1000. 

On the higher side, the EUR/USD pair is facing resistance at 1.1150 area. Bullish crossover of 1.1060 area can open further room for buying until 1.1185 level. Whereas, the chances of a bearish bias will remain strong if the pair continues to hold below 1.1060 level today. On the lower side, the target is likely to stay at 1.0947 and 1.0885. 

GBP/USD– Daily Analysis

The GBP/USD dropped 0.7% to 1.2364. We haven’t seen much movement in the GBP/USD as the United Kingdom continues to struggle efforts and seems very close to open the world’s biggest hospital, which built-in 10-days. They are also ordering approximately 15,000 ventilators more while saying that it needs to cope with the coronavirus outbreak.

The global news agency, Guardian, indicates the risk for the European Union citizens who have made their houses in the U.K. illegally. Whereas, Dr. Jenny Harries, deputy chief medical officer for England, said during his daily press conference on Sunday that the current limitations and lockdowns in the U.K. could continue for six months.

At the USA front, U.S. President Donald Trump did not suggest the overall lockdown in the country and said no to nationwide stay-at-home order while helping to continue the previous day’s risk-on tone. As in result, the U.S. ten-year treasury yields and most Asian stocks flashing green and mark moderate gains by the press time.

Looking forward, the final figures of the U.K.’s fourth quarter (Q4) GDP, expected to march 0.0% initial forecast, will likely offer fresh direction ahead of the U.S. data. However, news regarding the Brexit and the virus updates will be kay to watch.

Daily Support and Resistance

  • S1 1.2131
  • S2 1.2256
  • S3 1.2319

Pivot Point 1.238

  • R1 1.2444
  • R2 1.2505
  • R3 1.263

GBP/USD– Trading Tip

Technically, the GBP/USD is trading sideways around within a narrow trading range of 1.2275 – 1.2425. Since the Sterling has already crossed over 1.2275 resistance area, this is now going to work as a support. The MACD is still heading into the bullish zone, suggesting strong chances of buying the GBP/USD pair.

On the 4 hour timeframe, the GBP/USD pair is pretty much likely to find resistance around 1.2520, along with support around 1.2278. In the case of market breaks bellow 1.2278, we may see GBP/USD prices heading into the selling zone until 1.2100 and 1.2005. Whereas, the chances of buying remains solid over 1.2275 until 1.2520.

USD/JPY – Daily Analysis

The USD/JPY currency pair found on the bullish track and rose to 108.72, mainly because the risk sentiment remains positive. The slight recovery in the greenback also keeps the pair higher. Elsewhere, the traders gave a little attention to Japan’s data-dump. 

Right now, the USD/JPY is currently tradings at 108.52 and consolidates in the range between the 107.78 – 108.72. However, the currency pair also took from the U.S. policymaker’s statement.

At the data front, Japan’s February month data dump, including Retail Sales, Industrial Production and Unemployment Rate, overall flashed upbeat signals. Whereas the Retail Sales (YoY) surprised markets by crossing -1.2% forecast to 1.7%, the preliminary figures of Industrial Production (MoM) also increased above 0.1% expected to 0.4%. While the Unemployment Rate remained stable at 2.4% with Job/Applicants Ratio returning below 1.47 forecast to 1.45.

At the U.S. economic front, U.S. President Donald Trump did not suggest the total lockdown in the country and suggested no to nationwide stay-at-home order while helped to continue the previous day’s risk-on tone. As in result, the U.S. ten-year treasury yields gain 5-basis points (bps) to 0.72%, and most Asian stocks flashing green and mark moderate gains by the press time. Consequently, the USD/JPY pair is exhibiting bullish and bearish biases both. Let’s look at the technical side. 

Daily Support and Resistance

  • S1 105.89
  • S2 106.85
  • S3 107.35

Pivot Point 107.82

  • R1 108.31
  • R2 108.79
  • R3 109.76

USD/JPY – Trading Tips

Technically, the USD/JPY is trading at 108.270, heading north to examine the resistance level of around 108.615. At the moment, the USD/JPY pair is consolidating within a narrow range, where the upper limit is 108.500, and the lower limit stays at 107.150. 

The USD/JPY may face a bullish pressure in the wake of the bullish engulfing candle, which has been formed on the 4-hour chart around 108.500 area. Such a pattern represents the dominance of bulls in the market. Consequently, the bullish breakout of 108.650 resistance level can lead the USD/JPY prices higher towards 109.750 level. Until then, we should look for doing choppy trading by selling below 108.600 and buying over 107.250. All the best for today!  

Categories
Forex Market Analysis

Daily F.X. Analysis, March 24 – Top Trade Setups In Forex – Eyes on Manufacturing PMI Figures! 

The U.S. Dollar Index regained bullish bias at 102.81, while U.S. stock scored daily downside limits. Federal Reserve Bank of St. Louis President James Bullard said U.S. jobless rate might soar to 30% in the second quarter, and the Fed can provide more support if necessary. The U.S. official data showed that existing home sales amounted to an annualized rate of 5.77 million units in February, higher than expected.

The U.S. Dollar Index regained bullish bias at 102.81, while U.S. stock scored daily downside limits. Federal Reserve Bank of St. Louis President James Bullard said U.S. jobless rate might soar to 30% in the second quarter, and the Fed can provide more support if necessary. The U.S. official data showed that existing home sales amounted to an annualized rate of 5.77 million units in February, higher than expected.

The U.S. Dollar Index regained bullish bias at 102.81, while U.S. stock scored daily downside limits. Federal Reserve Bank of St. Louis President James Bullard said U.S. jobless rate might soar to 30% in the second quarter, and the Fed can provide more support if necessary. The U.S. official data showed that existing home sales amounted to an annualized rate of 5.77 million units in February, higher than expected.

Later today, eyes will be on the U.K. and U.S. manufacturing figures, which have the potential to price action…

Economic Events to Watch Today    

 

 

EUR/USD – Daily Analysis

This morning, EUR/USD fell 0.2% to 1.0673, following a 0.4% gain on Friday. Later today, the eurozone’s March Consumer Confidence Index (-14.0 expected) will be released. The EUR/USD pair may cross the strong resistance level if the risk-off market sentiment gets more worsens ahead. Eventually, it will likely fuel deeper losses in the greenback and may increase demand for the common currency.

The EUR/USD currency pair may come under pressure in the coming European session if the Eurozone and German preliminary Manufacturing PMIs for March ignore expectations. The data is expected to surprise on the lower side, in the wake of the coronavirus outbreak and may show investors how much economy is affected by the COVID-19 impact.

Looking forward, the traders will keep their eye on the Eurozone and German preliminary Manufacturing PMIs for taking fresh direction, and it will likely leave the impact on the pair movement ahead. As well as, the United States and Federal Reserve incomplete deal-related headlines also will be key to watch.

Daily Support and Resistance

  • S1 1.043
  • S2 1.0592
  • S3 1.0678

Pivot Point 1.0753

  • R1 1.0839
  • R2 1.0914
  • R3 1.1075

EUR/USD– Trading Tips

The EUR/USD traded bearishly as it as violated and closed below horizontal support becomes a resistance level of 1.0990. The EUR/USD is trading around 1.0750, and it’s forming a lower-lows pattern on the 4-hour chart, which mostly drives a continuation of a selling trend. 

Right now, the EUR/USD is trading at 1.0720, consolidating in a narrow trading range of 1.0817 – 1.0660. The EUR/USD is facing hurdles around 1.0817, and above this, the pair has the potential to target the next resistance level of 1.0930. While the EUR/USD has odds of staying bearish below 1.0920 to target 1.0805. On the daily chart, a violation of 1.0605 can extend the selling trend until 1.0550.

GBP/USD– Daily Analysis

The GBP/USD retreated 0.7% to 1.1557, after a 1.4% rally in the prior session. The GBP/USD pair slipped due to a stronger dollar after the U.S. official data showed that housing starts posted at an annualized rate of 1.599 million units in February (1.500 million units expected). The U.K.’s emergency coronavirus legislation will also reach the House of Lords for additional discussion before turning into the law some time by the end of the week.

However, the risk-sentiment continues to flash green with the U.S. ten-year treasury yields, S&P 500 Futures, and Asian stocks are all on their ways to recover the latest losses; while the headline Manufacturing and Services PMIs from the U.K. and the U.S. are likely to move into the contraction phase, with readings below 50.00. 

Looking forward, the traders will keep their eye on the Flash Manufacturing PMI and FPC Meeting Minutes for taking fresh direction. As well as, the United States and Federal Reserve incomplete deal-related headlines also will be key to watch.


Daily Support and Resistance

  • S1 1.105
  • S2 1.1318
  • S3 1.1456

Pivot Point 1.1586

  • R1 1.1724
  • R2 1.1853
  • R3 1.2121

GBP/USD– Trading Tip

On Tuesday, the GBP/USD continues to consolidate in a broad trading range of 1.1400 – 1.1885 as the trend of the market isn’t clear. On the higher side, the bullish breakout of the 1.1885 level can open the buying trend until the next resistance level of 1.2185 (38.2% Fibo level) and 1.2300 level, which markets 50% retracement while the pair has solid chances of bouncing off over 1.1450 level. 

A bearish breakout of 1.1425 level can lead the Cable towards the next support area of 1.1050. The MACD is tossing above and below zero as investors are unable to determine the trend of the market. 

USD/JPY – Daily Analysis

At the starting of Tuesday’s Asian session, the USD/JPY currency pair hit the bearish track. They dropped to an intra-day low of 110.10, representing 0.69% losses mainly due to broad-based greenback weakness after rising expectations of further delays in the US COVID-19 bill. The USD/JPY is trading at 110.53 and consolidates in the range between the 110.09 – 111.30. Moreover, the currency pair gave little attention to the preliminary readings of Japan’s Jibun Bank PMIs and continued its declining streak.

At the data front, the preliminary readings of March month Jibun Bank Manufacturing PMI dropped below 47.6 to 44.8 in March. Moreover, the Services index dropped from 46.8 before 32.7, the lowest since September 2007. After the U.S. Senators’ failure to receive the much-awaited coronavirus (COVID-19) package bill, U.S. President, Vice President and Treasury Secretary tried to confirm traders that the stimulus package will be agreed soon. Still, he did not succeed in hiding fears of further delays in the relief package. 

However, the report came that the Senate is not expected to vote on the Bill today too, and indicated further delays in President Trump’s ‘major’ response to the coronavirus.

On the positive side, the U.S. inflation expectations recovered slightly from the record low after the latest Federal Reserve statement that there is no limit to their Quantitative Easing program. 

Daily Support and Resistance    

  • S1 105.08
  • S2 107.59
  • S3 109.24

Pivot Point 110.1

  • R1 111.75
  • R2 112.61
  • R3 115.13

USD/JPY – Trading Tips

The USD/JPY pair has shown a slight bearish movement, falling from 110.65 level to 109.580. On the 4 hour chart, the USD/JPY has formed a bullish channel that is still intact, and it’s pretty much likely to support the USD/JPY prices around 109.650. 

A bearish breakout of 109.600 level can lead the USD/JPY prices towards the next support level of 108.350, and around this level, we can expect USD/JPY to bounce off again. Conversely, the pair faces resistance around 111 and 112.190 today. Let’s stay bullish above 109.650 and bearish below the same level today. 

All the best for today!  

Categories
Forex Market Analysis

Daily F.X. Analysis, March 10 – Top Trade Setups In Forex – Choppy Trading In Play! 

The U.S. Dollar Index sank 0.9% on the day to 95.07, down for a third straight session. Investors were speculating a steep cut in U.S. interest rates, though the expectations retreated as President Donald Trump announced that he would announce “very dramatic” actions to support the economy. The Dollar Index rebounded to 95.33. The European Commission will post final readings of 4Q GDP (+0.9% on-year expected).

The U.S. Dollar Index sank 0.9% on the day to 95.07, down for a third straight session. Investors were speculating a steep cut in U.S. interest rates, though the expectations retreated as President Donald Trump announced that he would announce “very dramatic” actions to support the economy. The Dollar Index rebounded to 95.33. The European Commission will post final readings of 4Q GDP (+0.9% on-year expected).

The U.S. Dollar Index sank 0.9% on the day to 95.07, down for a third straight session. Investors were speculating a steep cut in U.S. interest rates, though the expectations retreated as President Donald Trump announced that he would announce “very dramatic” actions to support the economy. The Dollar Index rebounded to 95.33. The European Commission will post final readings of 4Q GDP (+0.9% on-year expected).

France’s INSEE will report January industrial production (+1.8% on month expected) and manufacturing production (+1.7% on month expected).

Economic Events to Watch Today  

 

 

EUR/USD – Daily Analysis

The EUR/USD rose 1.1% to 1.1410. Official data showed that German industrial production grew 3.0% on month in January (+1.7% expected). The coronavirus breaks in China and South Korea seem to be lagging, as countries outside in the world embrace drastic steps to try and stamp out the virus. 

In Italy, where 16 million people in Lombardy and different sections of the north are presently below quarantine, there were 133 life losses announced on Sunday, drawing the sum to 366. More than 7,000 people in the country have been verified to have the disease. 

In Iran, there were 49 new deaths. Some 194 people have now expired from COVID-19 there. Although the latest numbers from China and South Korea suggest, the virus seems to be diminishing in northeast Asia.

The ECB is expecting to deliver a rate cut to control the economic fallout from the deadly coronavirus outbreak. Moreover, an unexpectedly bigger decline in the Eurozone Sentix Investor Confidence for March, a lead indicator, also continues to burdening the EUR currency.

Looking forward, the trader’s eyes remain on the Eurozone final GDP while the general market bias and USD dynamics will proceed to play a pivotal role.

Daily Support and Resistance

  • S1 1.1196
  • S2 1.1315
  • S3 1.1384

Pivot Point 1.1434

  • R1 1.1503
  • R2 1.1553
  • R3 1.1672

EUR/USD– Trading Tips

The EUR/USD is trading with a bullish bias around 1.1445. The EUR/USD seems to extend the bullish trend in the wake of completing the 161.8% and 261.8% Fibonacci extension level, out of which 161.8% has already been achieved until 1.1258. 

At the moment, the EUR/USD is trading at 1.1458, and bullish breakout of this level can extend buying until 1.1610 level. On the lower side, the EUR/USD may find support around 1.1400 and 1.1296. The RSI and MACD are in the buying zone as the MACD’s histograms are over zero, the bullish zone. Consider taking buy trades above 1.1380.

GBP/USD– Daily Analysis

The GBP/USD gained 0.3% at 1.3083.to hit its highest mark in a week to the greenback. This came after the forecasts waned for an urgent Bank of England rate cut to follow this week’s emergency movement from the U.S. Federal Reserve to accommodate coronavirus damage. 

The U.S. official data revealed that the economy added 273,000 non-farm payrolls in February (+175,000 expected), and the jobless rate dropped to 3.5% (3.6% expected). Average hourly earnings were up 0.3% on the month (as expected). 

January trade deficit was posted at US$45.3 billion (US$46.2 billion expected), and wholesale inventories (final reading) fell 0.4% on the month (-0.2% expected). Despite mixed economic events, the U.S. dollar is getting weaker and driving the GBP/USD pair higher. 

The GBP/USD currency pair buyers are still hopeful because the BBC reports a bumper £5billion boost for British exports by the first post-Brexit budget, which is scheduled to release on Wednesday. Chancellor Rishi Sunak will also announce supportive news for salaried employees in his first budget.

Looking ahead, due to the few economic data/events on the economic calendar, all traders keep their eyes on COVID-19/Brexit headlines for taking fresh directions.

Daily Support and Resistance

  • S1 1.278
  • S2 1.2946
  • S3 1.3023

Pivot Point 1.3111

  • R1 1.3188
  • R2 1.3277
  • R3 1.3443

GBP/USD– Trading Tip

The GBP/USD is showing some severe bullish moves in the wake of a weaker dollar and strong Sterling. The GBP/USD soars to trade around 1.3060 and continuation of a bullish trend can extend buying until 1.3160 and even higher. The GBP/USD has formed a solid green candle on the 4-hour timeframe, which may help drive further buying in the Sterling. 

The MACD is consistently forming bullish histograms over zero points, supporting the buying trend in the GBP/USD pair. Let’s consider buying over 1.3025. 

USD/JPY – Daily Analysis

The USD/JPY currency pair stops its bearish rally and hit the high of 105.00 mainly due to risk sentiment improved in the wake of U.S. stimulus expectations. The hopes of the U.S. stimulus put a bid on the U.S. equity futures, treasury yields. 

At the press time, the USD/JPY currency pair is currently trading at 104.78 and consolidates in the range between the 102.02 – 105.05. The U.S. Vice President Mike Pence took U-turn from his Friday’s comments and signaling a lack of enough testing kits in the labs.

The USD/JPY currency pair recovered from the lowest since late-2016 mainly because U.S. President Donald Trump’s suggested to ‘major’ economic measures in order to control coronavirus (COVID-19) triggered the risk-on.

Looking forward, traders are now keeping their eyes on the U.S. President Trump’s real means to tame the adverse implications of the virus. However, the significant risk recovery could only occur if there is news of any cures.

Daily Support and Resistance

  • S1 98.73
  • S2 100.42
  • S3 101.35

Pivot Point 102.12

  • R1 103.05
  • R2 103.81
  • R3 105.5

USD/JPY – Trading Tips

The USD/JPY is trading at 104.200, testing the bearish channel, which supported the Japanese yen at 104.400. The increased reduced demand for safe-haven assets is driving strong bullish correction in the USD/JPY currency pairs. 

The USD/JPY has closed two consecutive bullish candles, which are followed by the bearish breakout setup and suggesting odds of further bullish bias until 104.650. 

Below 104.550, the selling trend continuation can lead the USD/JPY prices towards 101.670 whereas, further buying over 104.550 can lead the USD/JPY to 106.250 area

All the best for today!  

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Forex Market Analysis

Daily F.X. Analysis, February 19 – Top Trade Setups In Forex – UK CPI Surprises! 

The U.S. Empire Manufacturing Index rose to 12.9 in February (5.0 expected). Later today, January reports on housing starts (an annualized rate of 1,425,000 units expected), and producer price index (+0.1% on month expected) will be released.

The U.S. Empire Manufacturing Index rose to 12.9 in February (5.0 expected). Later today, January reports on housing starts (an annualized rate of 1,425,000 units expected), and producer price index (+0.1% on month expected) will be released.

The U.S. Empire Manufacturing Index rose to 12.9 in February (5.0 expected). Later today, January reports on housing starts (an annualized rate of 1,425,000 units expected), and producer price index (+0.1% on month expected) will be released.

European stocks were broadly lower, as the Stoxx Europe 600 Index declined 0.4%. Germany’s DAX fell 0.8%, France’s CAC lost 0.5%, and the U.K.’s FTSE 100 was down 0.7%.

Economic Events to Watch Today 

 

 

EUR/USD – Daily Analysis

The EUR/USD dropped 0.4% to 1.0796, the lowest level since April 2017. The German ZEW Current Situation Index declined to -15.7 in February (-10.0 expected) from -9.5 in January. The research institute said economic development is rather fragile at the moment, and the outlook for export-intensive sectors has deteriorated particularly sharply, citing impacts of the coronavirus outbreak.

The single currency’s vulnerability has prompted by moderate or negative growth in Germany during the last year. Moreover, data from this Monday imply that the market has not yet attained its bottom, as the Bundesbank stated in its monthly statement that there are no indications the currency position is set to improve in the opening quarter of the year, while coronavirus’ risk scores a new course of risk.

The traders eagerly anticipated the German ZEW economic sentiment, which was expected to worsen to 21.5 in February against. 26.7 reported in January. As per the recent release, the ZEW Indicator of Economic Sentiment for Germany decreased sharply in February, dropping 18.0 points to a distinct reading of 8.7 points. 

The fundamental event is thus lightly beneath its December 2019 mark. The evaluation of the economic situation in Germany has also worsened when we compare it with the previous month.

Moreover, EUR/USD currency pair near-term technical outlook also shows a bearish picture, with a test of the psychological support at 1.0800 on the cards. The traders will have their sights on the coronavirus headlines for taking fresh clues.

Daily Support and Resistance

  • S1 1.0702
  • S2 1.0754
  • S3 1.0774

Pivot Point 1.0806

  • R1 1.0826
  • R2 1.0858
  • R3 1.091

EUR/USD– Trading Tips

The pair appears to have formed neutral candles as the investors still didn’t find any solid reason to trigger bearish breakout at 1.0825 level. Today’s candle is also neutral, and it is pretty much likely to drive upward correction. Today, if the EUR/USD pair manages to drop below 1.0840, we may see EUR/USD prices going towards 1.0760. Let’s look for buying trade today above 1.0806. 

GBP/USD– Daily Analysis

The GBP/USD slipped 0.1% to 1.3002. Official data showed that the U.K. jobless rate was steady at 3.8% in the three months to December as expected. Earlier today, the Sterling declined during but concerns about whether the current Chancellor of Exchequer will be ready to pass the budget on time. 

A report from U.K. Prime Minister Johnson’s spokesman confirmed that the U.K. is not asking anything distinct from the E.U. in trade discussions and that they are available to negotiate. 

Besides, the market risk-tone getting worse day-by-day mainly due to the coronavirus fears, which provides support to the greenback as a safe-haven currency. Despite lowering the pace of the death toll and infected peoples in China, the uncertainty and fears still surrounding the market.

On the forecasted views, the Bank of England’s last MPR looks for the unemployment rate to stay unchanged at 3.8% for the next 3-4 months, we look for an increase to 3.9% in December (mkt 3.8%), with the potential for another pop higher in January. 

As we already mentioned that many countries had banned travelers from China, and major airlines have delayed flights, something that China’s representative to the E.U. warned was fuelling panic and threatening attempts to resume business.


Daily Support and Resistance

  • S1 1.285
  • S2 1.2928
  • S3 1.2964

Pivot Point 1.3007

  • R1 1.3043
  • R2 1.3085
  • R3 1.3164

GBP/USD– Trading Tip

The GBP/USD pair slipped lower to test the next support level of 1.2960 and has formed a Doji candle around this corner before taking a sharp bullish reversal. 

The GBP/USD is trading at 1.3036, below the 1.3065 resistance level. Closings of candles below this level may help secure a sell trade around 1.3065, whereas, a bullish breakout of 1.3065 can lead the Cable towards 1.3200. The MACD and RSI are holding in the buying zone, supporting bullish bias for the GBP/USD pair. Let’s look for bullish trades above 1.3018 today. 

USD/JPY – Daily Analysis

The USD/JPY currency pair flashing green and rose to 110.08, mainly due to the uptick in the Asian stocks. As well as the sluggish data from Japan sent the pairs higher. As of writing, the USD/JPY currency pair is currently trading at 110.06 and consolidates in the range between the 109.86 – 110.09. However, the risk-reset based on catalysts from China.

Stocks in China, Hong Kong, Indonesia, and Japan are printing moderate gains ranging between 0.20% and 0.60% after the latest improvement in risk-tone. Also representing the risk reset is the U.S. 10-year treasury yields that rise one basis point to 1.563% by the press time.

The fundamental reason behind the pair’s bullish moves is the release of Japan’s Machinery Order and Merchandise Trade Balance Reports. As well as the positive comments from China’s President Xi Jinping and the World Health Organization (WHO) that we have to stay relaxed. Whereas, the opposing statement from Moody’s Investors Service has been ignored.

Whereas Caixin Media Company Ltd. increased uncertainties regarding the reducing coronavirus infected people on Tuesday, the latest figures from Hubei showed a confused picture. According to the report, there are 1,693 new cases on February 18 against 1,807 of February 17. This report also suggests 132 new deaths compared to 93 recorded the previous day.

Moving ahead, China-related headlines will be the key to watch, the U.S. housing market numbers and the Producer Price Index data will also be essential to watch.

Daily Support and Resistance

  • S1 109.26
  • S2 109.54
  • S3 109.7

Pivot Point 109.83

  • R1 109.99
  • R2 110.11
  • R3 110.4

USD/JPY – Trading Tips

The USD/JPY pair has violated the sideways trading range of 110.025 – 109.500 in the wake of a stronger dollar. The couple is heading north towards the next resistance level of 110.800. On the way, the pair may find 161.8% Fibo extension resistance at 110.450. 

The RSI and MACD are crossing on the higher side, suggesting chances of further bullish bias in the USD/JPY currency pair. Alternatively, the USD/JPY can drop after testing 110.850 resistance. 

All the best for today! 

Categories
Forex Market Analysis

AUD/USD Currency Pair Seesaws Near 0.6900 As Traders Want More Clarity Regarding Sino-US Trade deal.

The AUD/USD currency pair flat near the 0.6900, mainly due to mixed sentiment regarding the Sino-US trade deal. As of writing, the AUD/USD currency pair is currently trading at 0.6920. The currency pair recently benefited from the Sino-US phase-one trade deal signing and positive comments from the U.S. and Chinese trade negotiators.

The AUD/USD currency pair flat near the 0.6900, mainly due to mixed sentiment regarding the Sino-US trade deal. As of writing, the AUD/USD currency pair is currently trading at 0.6920. The currency pair recently benefited from the Sino-US phase-one trade deal signing and positive comments from the U.S. and Chinese trade negotiators.

The AUD/USD currency pair flat near the 0.6900, mainly due to mixed sentiment regarding the Sino-US trade deal. As of writing, the AUD/USD currency pair is currently trading at 0.6920. The currency pair recently benefited from the Sino-US phase-one trade deal signing and positive comments from the U.S. and Chinese trade negotiators.

Apart from the Sino-US trade deal, China also cheered Trump administration as the U.S. removed China from the currency manipulator list. Besides, the latest comments from the United States Senate leader McConnell who sent optimism that the latest United States–Mexico–Canada Agreement (USMCA) will pass the house on Friday, also supported the Aussie.

While the U.S. Vice President Mike Pence said that Phase 2 talks had already started and officials are struggling to resolve disputes. As in result, the risk-on sentiment improved in the market, and ultimately riskier assets also got support.

Looking forward, November month Home Loans and Investment Lending for Homes from Australia will be followed by China’sChina’s December month House Price Index to offer a fresh direction to the pair.

Daily Support and Resistance

S3 0.682
S2 0.686
S1 0.6881
Pivot Point 0.6899
R1 0.6921
R2 0.6939
R3 0.6978

Technically speaking, the AUD/USD is trading bullish at 0.6920 within a bullish channel, which is keeping the Aussie on the higher side. The AUD/USD pair is likely to find resistance around 0.6930, but the latest higher’s high pattern may drive more buying in the AUD/USD pair.

The MACD and RSI are crossing over in the bullish zone, and these may underpin the demand for AUD/USD. On the higher side, the bullish breakout of 0.6930 is likely to lead Aussie prices towards 0.6960, while support continues to stay around 0.6900. Let’sLet’s stay bullish above 0.6910 today. Good luck!

Categories
Forex Market Analysis

Daily F.X. Analysis, January 8 – Top Trade Setups In Forex – Eyes on Trump’s Speech! 

On the forex front, the U.S. Dollar Index rebounded 0.3% on the day to 96.97 on Tuesday. The USD/JPY dipped 0.4% to 108.00, as U.S.-Iran tensions curbed investors’ risk appetite. This morning, the pair slid further to 107.67, the lowest level since mid-October, following reports that Iran has started attacks on U.S. targets in Iraq.

On the forex front, the U.S. Dollar Index rebounded 0.3% on the day to 96.97 on Tuesday. The USD/JPY dipped 0.4% to 108.00, as U.S.-Iran tensions curbed investors’ risk appetite. This morning, the pair slid further to 107.67, the lowest level since mid-October, following reports that Iran has started attacks on U.S. targets in Iraq.

On the forex front, the U.S. Dollar Index rebounded 0.3% on the day to 96.97 on Tuesday. The USD/JPY dipped 0.4% to 108.00, as U.S.-Iran tensions curbed investors’ risk appetite. This morning, the pair slid further to 107.67, the lowest level since mid-October, following reports that Iran has started attacks on U.S. targets in Iraq.

The Euro dropped 0.4% to $1.1154. Official data showed that the Eurozone’s CPI grew 1.3% on year in December (as expected), while retail sales in November rose 1.0% on the month (+0.7% expected). Later today, German factory orders for November will be released (+0.2% on month expected).

Economic Events to Watch Today

 

EUR/USD – Daily Analysis

The EUR/USD currency pair is representing limited gains, having hit the 5-day average resistance level at 1.1168 and looking to gain ground again mainly due to intensified geopolitical tensions. The EUR/USD pair is trading at 1.1147 and consolidates in the range between the 1.1145 – 1.1169.

The German data is due to come out at 06:00 GMT and expected to show Factory Orders rose by 0.3% month-on-month in November, having dropped by 0.4% in the preceding month. In year-on-year terms, factory orders are anticipated to have slipped by 5.5%. 

On the flip side, the positive reading may support the narrative that the German economy has bottomed out and will likely help the EUR/USD currency pair re-test resistance at 1.1206. The EUR currency will likely face losses if the data drops short of expectations by a significant margin. 

Daily Support and Resistance

  • S3 1.1042
  • S2 1.1101
  • S1 1.1127
  • Pivot Point 1.116
  • R1 1.1186
  • R2 1.1219
  • R3 1.1279

EUR/USD– Trading Tips

The EUR/USD is trading bearish around 1.1132, testing the support level of 1.1130. This level worked as a support during the previous days, the way Euro is forming candles, it seems to violate it pretty soon. On the 4 hour chart, the pair has formed a bullish channel that is keeping the EUR/USD supported near 1.1110. The MACD is just crossing below the 0 levels, which is suggesting odds of the bearish trend in the EUR/USD. At the same time, the bearish engulfing candle on the daily timeframe is adding further bearish bias on the EUR/USD pair. Let’s stay bearish below 1.1160 today. 

GBP/USD– Daily Analysis

The GBP/USD currency pair stay quite and consolidates in the narrow range between the 1.3105 – 1.3040 in the wake of the United States and Iran war fears. The GBP/USD currency pair is trading at 1.3119. Notably, the pair did not show a massive response to the early-day attack by Iran to the U.S.

The GBP traders gave a weak response to the greenback’s weakness amid Iran’s attack on the United States bases in Iraq. Apart from this, the USD dropped later when the United States did not take any action instantly.

As we already mentioned in the previous report that the UK PM Johnson would stick to his Brexit deadline, i.e., the end of 2020. Though, the previous headline suggested that the country will likely push the British leader towards a soft landing. The Bill of Tory leaders is still safe to the reaction of the opposition, mainly due to the clear majority of the ruling Conservatives. 

Although, the opposition Labour Party blamed the United Kingdom Prime Minister Boris Johnson of giving protection to the United States PM Donald Trump regarding the killing of Iran military general.

At the US-Iran war front, the United States President Donald Trump is also ready to speak on Iranian attacks over the U.S. bases in Baghdad and could affect the market’s moves. The U.S. ADP Employment Change and comments from Federal Reserve Governor Lael Brainard can also be the reason behind the pair moves.


Daily Support and Resistance

  • S3 1.2905
  • S2 1.3022
  • S1 1.3066
  • Pivot Point 1.314
  • R1 1.3184
  • R2 1.3257
  • R3 1.3375

GBP/USD– Trading Tip

The GBP/USD is also trading bullish around 1.3185 due to weakness in the U.S. dollar. The recent bullish engulfing candle is suggesting odds of bullish trend continuation in the GBP/USD pair. 

On the higher side, the GBP/USD may find resistance near 1.3185 level today while the support still stays at 1.3060. A bullish breakout of 1.3185 level can extend the bullish trend until 1.3285. Let’s stay bullish above 1.3125 today. 

USD/JPY – Daily Analysis

The USD/JPY currency pair dropped to 108.00, having hit the low of 107.83, mainly due to the risk-off market sentiment in the wake of Iran’s missile attacks on the U.S. airbases in Iraq earlier today. But currently, the USD/JPY currency pair has recovered to 108.50 but failed near the 108.45 due to risk recovery after confirmed that no damages have been seen by the United States President Donald Trump from the Iranian attacks. 

The USD/JPY pair is currently trading at 108.38 and consolidates in the range between the 107.64 – 108.53. More than one dozen missies have been reportedly launched at the Ain Assad Air Base. White House answers that they are aware of the attack, and the U.S. President Trump has been briefed, and he is monitoring the situation.

It is worth to mention that the United States President Donal Trump will make a statement tonight. With this, the U.S. Defense Secretary Esper and U.S. Secretary of State Pompeo have arrived at the White House. On the other hand, Iran’s guards warn the U.S. any aggression against Tehran will get a worse response.

Meanwhile, the market’s risk tone recently weakened with the U.S. 10-year Treasury yields slipping more than seven pips to 1.75%, whereas the S&P 500 Futures are losing more than 1% to 3,200 by the press time.

Looking forward, the traders will now keep their eyes on further progress surrounding the US-Iran tension for fresh direction. At the economic front, Japan’s Consumer Confidence for December and the US ADP Employment Change, an early signal to Friday’s NFP, will be closely observed.

Daily Support and Resistance

  • S3 106.54
  • S2 107.34
  • S1 107.66
  • Pivot Point 108.14
  • R1 108.46
  • R2 108.95
  • R3 109.75

USD/JPY – Trading Tips

The USD/JPY pair is trading bullish around 108.720, which marks 50% Fibonacci retracement on the 240 minutes chart. The pair is pretty much likely to surge higher to complete th2 61.8% Fibonacci retracement at 108.950. 

The MACD is forming bigger histograms than before, which indicates the positive sentiment of traders. Lastly, the 4 hour time has formed three white soldiers pattern, which is likely to keep the USD/JPY bullish today. Consider taking buying trades above 108.500 to target 108.950. 

All the best!