Categories
Forex Signals

EUR/USD Downward Channel in Play – Sell Signal Update!

The strength in the U.S. dollar also dragged the EUR/USD pair lower to the 1.2175 level. For the moment, the EUR/USD is gaining support at the 1.2175 level, and below this, it can dip further until the 1.2130 level. On the higher side, the pair may face resistance at the 1.2216 level. The RSI and MACD support bullish correction, and these may cause a bounce off in the EUR/USD pair until the 1.2216 level. Below 1.2216, we can again see a dip in EUR/USD.


Entry Price – Sell1.21603
Stop Loss – 1.22003
Take Profit – 1.21103
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.
iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368
Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

Categories
Forex Signals

EUR/USD Completes Retracement – Brace for a Bullish Correction! 

The EUR/USD is trading with a bearish bias today at the 1.2248 level, having violated the upward trendline at the 1.2252 level. Closing of candles below this trendline confirms a breakout, and there’s a strong odd of selling trend’s continuation until 1.2203. The next support may be found around the 1.2175 level below this, along with resistance at 1.2258 and 1.2313. The 50 periods EMA is likely to extend resistance at the 1.2262 level, and supporting the selling trend in the EUR/USD today; however, we are taking a buying trade as the pair is forming Doji, and it may bounce off to continue trading bullish. 


Entry Price – Buy 1.226

Stop Loss – 1.222

Take Profit – 1.23

Risk to Reward – 1:1

Profit & Loss Per Standard Lot = -$400/ +$400

Profit & Loss Per Micro Lot = -$40/ +$40

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368

Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

 

Categories
Forex Market Analysis

Daily F.X. Analysis, December 30 – Top Trade Setups In Forex – U.S. Trade Balance Ahead! 

The eyes will remain on the Spanish Flash CPI y/y, the U.S. Chicago PMI, and Pending Home Sales m/m figures on the news side. However, these are low impact events and may not drive sharp moves in the market.

Economic Events to Watch Today  

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.22489 after placing a high of 1.22748 and a low of 1.22066. EUR/USD currency pair raised on Tuesday for the 4th consecutive day as the U.S. dollar was weak across the board and risk sentiment was high. The European stocks closed higher on Tuesday following a rally on Wall Street in the previous session. The pan-European Stoxx600 indexes ended up 0.76%, with most sectors in the positive territory. The rally has improved the European sentiment in U.S. stocks on Monday that came in after President Donald Trump signed a $900 billion coronavirus relief package into law; the measure will include direct payment to most Americans by $600.

Previously, Trump has demanded a $2000 direct payment days before the signing. On Monday, the House of Representatives voted to increase the second round of direct federal payments to $2000 and left it up to the GOP-controlled Senate. After this, the U.S. stocks rallied and continued rising till Tuesday morning. This pressured on the U.S. dollar ultimately added in the EUR/USD pair’s upward direction on Tuesday.

However, the positive sentiment in Europe came after the Brexit trade deal was secured between the E.U. and U.K. on Christmas Eve. Following this, London’s FTSE100 index rose by 2% on Tuesday. On Monday, the 27 ambassadors from the European Union member nations formally accepted the deal implemented on January 1. This news also supported the upward momentum in the currency pair EUR/USD pair on Tuesday.

Meanwhile, on Tuesday, the European Commission President Ursula von der Leyen said that the European Union would buy an extra 100 million doses of Pfizer and BioNTech’s coronavirus vaccine to bring the total from the two firms to 300 million doses.

She tweeted that they had decided to take an additional 100 million doses of the Pfizer/BionTech vaccine that has already being used to vaccinate people across the E.U. After some of the vaccine contestants organized by the E.U, this plan came in after some of the vaccine candidates faced unexpected delays in clinical trials that forced the bloc and other wealthy nations to rely on shots from fewer manufacturers than initially planned.

The E.U. officials said that the two firms have committed to rapidly deliver 200 million doses after regulatory approval for 15.5 euros per piece. The extra 100 million will be delivered at the same price, but the timetable will be negotiated as they will be delivered in 2021. The E.U.’s goal to roll out vaccine at the mass level also supported the local currency Euro and supported the upward momentum in EUR/USD pair.

The risk sentiment in the market driven by the vaccine rollout, U.S. stimulus, and the Brexit optimism also kept pushing the pair EUR.USD even higher on the board on Tuesday. Moreover, on the data front, at 19:00 GMT, the S&P/CS Composite -20 HPI for the year from the U.S. rose to 7.9% in October from the expected 7.0% and supported the U.S. dollar that capped further upside in the EUR/USD prices.

Daily Technical Levels

Support   Resistance

1.2210     1.2279

1.2175     1.2311

1.2142     1.2347

Pivot point: 1.2243

EUR/USD– Trading Tip

The EURUSD has violated the ascending triangle pattern, which was extending resistance at 1.2265 level, and above this, the odds of bullish trend continuation remain pretty stable. On the lower side, the support stays at the 1.2266 level, and the continuation of an upward trend can lead the pair towards the next resistance level of 1.2317. A slight downward retracement can be expected before a further upward trend.


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.35009 after placing a high of 1.35225 and a low of 1.34405. The GBP/USD pair raised on Tuesday despite the rising number of coronavirus cases in the U.K. amid the Brexit development and improved risk sentiment.

The GBP/USD pair was supported on Tuesday from the rising risk sentiment in the market due to more optimistic news from the vaccine front. The U.K. has covered the way for widespread vaccinations with a homegrown shot that will be less expensive and easier to transport and store than other vaccines. For this purpose, the vaccines developed by the University of Oxford and AstraZeneca were set to get approval from the U.K. for emergency use authorization.

The U.K. drug regulator, the Medicines and Health products Regulatory Agency, will imminently authorize the AstraZeneca and Oxford University vaccine for emergency use within days to control the spread of coronavirus in the country. The vaccine’s efficacy rate is 90% after taking two doses, as one dose will provide only 62% efficacy against the coronavirus. Approving another vaccine will help the U.K. government battle against the coronavirus pandemic and lift the severe social distancing restrictions put in place before Christmas.

The new coronavirus cases in the U.K. on Tuesday were recorded as 53,135, and a health regulator of the country has said that the rise in coronavirus cases in the U.K. was of extreme concern. The Health Secretary has announced that the NHS was facing unprecedented pressures as hospitals in England and Wales were treating more coronavirus patients than at the peak of the first wave in April.

On the Brexit front, four days after sealing a free trade agreement with the European Union, the British government warned businesses to get ready for disruptions and bumpy moments when the new rules affect Thursday night. On Monday, the Businesses were scrambling to digest the details and implications of the 1240 page deal sealed between the U.K. and the E.U. on Christmas Eve. Meanwhile, E.U. ambassadors gave their unanimous approval on Monday to the Brexit trade deal with the U.K. However, the deal still needs approval from the E.U. legislature that is expected to come in February. At the same time, the U.K.’s House of Commons is expected to approve it on Wednesday.

After its approval by 27 E.U. ambassadors, the Brexit trade deal’s optimism gave support to British Pound that ultimately pushed the currency pair GBP/USD higher on the board despite the rising number of coronavirus cases in the country. Furthermore, the U.S. dollar was also weak across the board, which also helped the GBP/USD pair keep posting gains on Tuesday. Trump signed the second stimulus bill on Sunday that weighed heavily on local currency. Whereas, on the data front, at 19:00 GMT, the S&P/CS Composite -20 HPI for the year from the U.S. surged to 7.9% in October from the predicted 7.0% and supported the U.S. dollar that capped further gains in the GBP/USD prices on Tuesday.

Daily Technical Levels

Support   Resistance

1.3456     1.3533

1.3413     1.3567

1.3379     1.3611

Pivot point: 1.3490

GBP/USD– Trading Tip

The GBP/USD pair has also violated the resistance level of 1.3520 level, and on the higher side, the next target remains at the 1.3580 level. On the lower side, the GBP/USD pair may find support at the 1.3520 level now. We can expect a continuation of an upward trend in the Sterling today as the MACD and RSI suggest a bullish trend. Alongside, the GBP/USD pair may soar until the 1.3620 level today as the 50 EMA also extending bullish bias for the Cable.


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 103.530 after placing a high of 103.824 and a low of 103.461. After posting gains for two consecutive days, USD/JPY dropped and posted losses on Tuesday amid the broad-based U.S. dollar weakness despite the risk sentiment. The U.S. Dollar was weak on Tuesday as investors were hopeful that Senate would pass the additional $1400 in stimulus paychecks. The greenback that measures the value of the U.S. dollar against the basket of six currencies was down by 0.24% on Tuesday and weighed on the USD/JPY pair.

The House of Representatives approved the rise in the amount of the stimulus checks from $600 to $2000 earlier in the week. Now the eyes have turned to Senate, where the Majority Leader Mitch McConnell moved to block the rise in the amount on Tuesday. Whereas, U.S. President Donald Trump has urged him to approve the increase in the number of stimulus paychecks.

The greenback has seen steady losses since U.S. President Donald Trump has signed the $2.3 trillion coronaviruses and spending bill on Sunday. Investors shifted from the U.S. dollar immediately after as more stimulus prospects reduced the demand for safe-haven assets. The country’s economic recovery was under threat as the U.S. continuously saw a large number of coronavirus cases, and it has increased the hopes for more fiscal stimulus measures from Congress. Hence, investors kept selling the U.S. dollar in hopes that the Senate could pass the increase in the number of stimulus checks at the last minute.

Furthermore, another reason behind the weakness of the U.S. dollar was that some investors warned that the dollar would fall further in 2021 as President-elect Joe Biden will roll out further stimulus measures. Biden and his administration will come into power on January 20. Despite the weakness of the U.S. dollar, the USD/JPY pair was also falling on the back of increasing figures of coronavirus cases in the U.S. There were also reports suggesting that the new variant of coronavirus first discovered in the U.K. has reached the U.S. The health officials in Colorado confirmed that the infected individual was held in isolation in Elbert Country and that the person was in his 20s and had no travel history.

This also raised the fears for global economic recovery and raised the safe-haven appeal that ultimately supported the safe-haven Japanese yen, and added the USD/JPY pair’s downward momentum on Tuesday.

Meanwhile, on the data front, at 19:00 GMT, the S&P/CS Composite -20 HPI for the year from the U.S. advanced to 7.9% in October from the anticipated 7.0% and supported the U.S. dollar that capped further losses in the USD/JPY prices on Tuesday.

On the other hand, the losses in USD/JPY pair were also capped by the reports that AstraZeneca and University of Oxford’s vaccine were set to receive approval from the U.K.’s regulatory for emergency use authorization. This resulted in improved risk sentiment and weighed on the Japanese Yen due to its safe-haven status and capped further losses in the USD/JPY pair on Tuesday.

Daily Technical Levels

Support   Resistance

103.39     103.78

103.23     104.01

103.01     104.17

Pivot point: 103.62

USD/JPY – Trading Tips

The USD/JPY violates the sideways range at the 103.500 level. It was a support level extended by an ascending triangle pattern that has already been violated. On the 2 hour timeframe, the USD/JPY pair is gaining support at 103.250 and 102.980 levels along with a resistance level of 103.575, which is extended by a triangle pattern that got violated. The pair is now closing a doji candle over 103.260 support level that suggests odds of bullish correction. On the higher side, the pair can lead towards the 103.575 level and then offer us a sell trade. Let’s brace for it. Good luck!

Categories
Forex Chart Basics

If EUR/USD Buying is High, Does That Affect the Fluctuation/Swing in the Chart?

The EUR-USD cross is an intriguing one. With a total of 9.6 million traders in the world, approximately 37% of all volume at the global level is held by this currency pair alone. In fact, not only are the EUR and the USD two of the most traded currencies individually but they also comprise the most liquid pair.

Traders from all corners of the planet seem to love the EUR-USD because of tighter spreads and less slippage, but this currency pair is, at the same time, the Holy Grail for major players in the market.

There are no Coincidences

Forex is dominated by the Interbank Market, which is used by various financial institutions to trade currencies between themselves. Interestingly enough, 50% of this Interbank Market is controlled by the largest banks.

Out of approximately 25 000 banking institutions existing in the world, Deutsche Bank, Citi, JP Morgan Chase, and HSBC are some of the most prominent. And, you should know that their interest lies where yours does as well – profit.

How come?

Well, big banks love to manipulate the prices. Have you ever noticed how the price suddenly changed when everyone was certain that it would keep on going in the same direction? There’s the catch.

Big banks focus on the concentration of activity and they step in right where most traders are to take the cream off. To be specific, it is not just where traders are in the chart at that moment but where most of them are headed. 

How the Big Banks Interfere

It is unfortunate what sentiment can do. Many traders keep using the same tools and indicators and they, logically, end up losing. We may not know the extent of tools the big banks use to maintain control and insight, but the same information is accessible to everyone through IG Client Sentiment Indicator or FXCM SSI

While the big banks have the power to detect market activity, they cannot see your specific order. They can, however, discover if the majority of orders were long or short, based on which they can manipulate the price.

So, the more the orders push the market in a specific direction, the more likely are the banks to interfere and turn everything around.

USD is a Magnet

The choice of currencies can have an equally strong influence on the trade as well. As the USD is always in demand, it is more likely to be always on the big banks’ radar. Any news events concerning the currency will also stir up the market and set the ground for major turbulence.

The USD is, in fact, so prone to react to any news that any tweets of the previous US president, Donald Trump, caused a commotion in the market. Major US economic reports (GDP, employment, producer and consumer price index, retail sales, and trade deficit reports) are also perfect opportunities for the big banks to take their share of traders’ money.

The EUR is specific because the number of reports concerning the currency is higher due to the number of Eurozone member states. Although related economic reports (especially those of France and Germany) are valuable for traders, EUR pairs seem to do well even when they do come out. 

Since any currency combination is determined by both currencies, the EUR-USD (as the most traded and liquid pair) is that more monitored by the big banks.

The big banks’ involvement can be seen in other crosses involving this pair. For example, the EUR-USD pair has historically exhibited a high correlation with the S&P500 as they both involve the US economy. Interestingly enough, these major banking institutions have no significant dominance over precious metals, which typically dictate what will happen with the pair.

Manipulation at its Best

The number of individual orders, as we can see, does not have the power to drive the market. Individual requests cannot affect market movement per se. The only power that can create an imbalance between buying and selling orders is the big banks. 

Anyone trading the EUR-USD can see these sudden changes in prices, which leave behind many unfilled orders on the supply or the demand level. The big banks will use any opportunity to cause such friction to have their orders filled after the price returns to the zone.

These are the reasons why some forex professionals advise beginners to start trading some other currency pairs that are less susceptible to such interferences.

Indicators’ Predicting Power

Many traders use the sentiment to predict future activity in the market, which is a highly volatile and unpredictable tool. While we cannot control the big bank’s involvement, we can limit their impact by not focusing on the number of orders in the market and avoiding circumstances that these major players deem inviting. 

Any indicator is a result-oriented tool that has no power in predicting the future. News will come out and changes will occur in the world, but our task as traders is to adopt the skills that can raise us above the level of sentiment and provide us with stability.

Instead of focusing on the quantity of orders, supply levels, rather strive to determine the overall market direction and evade the banks’ radar as successfully as possible.

Own your Share of Responsibility

It is important to understand also that if big banks ever disappeared, the nature of this market would change entirely. Maybe the volume could change or forex might start to resemble the stock market. That is why it is important to shift the focus from losses and adopt an opportunistic and proactive mindset. How can you take advantage of the big banks’ existence?

The best solution to this challenge is building your own strategy and learning to trust that system. It should help you avoid the patterns the majority of traders keep repeating. This is a classic contrarian trader view of forex.

Trading currencies requires each trader to let go of the herd mentality. You need to become as independent as possible, especially when it comes to heavily monitored and liquid pairs such as EUR-USD. Your best bet is to invest in learning about trading psychology and letting go of the belief that individuals can impact the market.

Knowledge is Power

If you are still unconvinced that sentiment is not your point of reference, at least aim to use credible sources. 

Twitter, for example, offers an excellent pool of information – you can explore updates about IG Client Sentiment Index on DailyFXTeam, learn about more SSI currency pairs on FXCM_MarketData, or discover some invaluable educational materials on www.forex.academy, and build your unique way of trading. 

Finally remember that it is your skillset and toolbox that will allow you to trade the EUR-USD currency pair successfully – not the news, not the orders, and certainly not the sentiment. Use the traders’ sentiment only to see if there is enough “profit space” for you to take that contrarian trade direction. If 90% of traders are long on EUR-USD, it is hardly going to get higher, do not go into the wall. As the flow in the market is directly managed by external factors, you will primarily benefit from having a system in place that will guide you through any potential volatility caused by news events and the big banks. 

 

Categories
Forex Signals

EUR/USD Violates Ascending Triangle Pattern – Bullish Signal In Play! 

The EUR/USD bullish bias continues to dominate the market as it’s trading at 1.2225. On the higher side, the EUR/USD may target the 1.2250 level and 1.2282 resistance areas. The direct currency pair may find support at 1.2175, which is extended by a double top resistance, which now is working as a support. The MACD and RSI are supporting bullish bias along with the 50 periods EMA. We can expect a continuation of a bullish trend in the EUR/USD today.


Entry Price – Buy 1.22338

Stop Loss – 1.21938

Take Profit – 1.22738

Risk to Reward – 1:1

Profit & Loss Per Standard Lot = -$400/ +$400

Profit & Loss Per Micro Lot = -$40/ +$40

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368

Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

Categories
Forex Fundamental Analysis

EUR/USD Global Macro Analysis – Part 3

EUR/USD Exogenous Analysis

In the exogenous analysis, we’ll analyze the economic fundamentals that impact the Euro-US Dollar exchange rate. For this analysis, we’ll focus on:

EU and the US GDP Growth Difference

The primary drivers of GDP growth in an economy are domestic demand and international trade. When a country’s exports increase, it means that the demand for its currency also increases, which makes it appreciate.

The US and the EU GDP change are in tandem. In Q3 of 2020, the EU GDP expanded by 11.6%, while that of the US expanded at an annualized rate of 33.1%. Although this change seems much, the US GDP level is still about 3.5% lower than the pre-coronavirus pandemic levels.

Based on the correlation analysis of the GDP differential and the EUR/USD pair changes, we assign a deflationary score of -2. It implies that the difference in GDP growth between the EU and the US will lead to a bearish EUR/USD.

Trade Balance Difference

For each country, the trade balance shows if an economy is running on deficits in international trade. The trade balance is simply the difference between exports and imports. Surplus trade balance happens when an economy exports more than it imports. A negative trade balance means an economy is importing more than it exports.

The EU recorded a trade surplus of €24489.40 million in September 2020, while the US had a $63.9 billion trade deficit in the same period. The trade balance has a high correlation with the exchange rate of the EUR/USD pair. Therefore, we assign it an inflationary score of 7, meaning we expect a widening trade balance between the EU and the US to result in bullish EUR/USD.

EU and US Interest Rate Differential

This indicator measures the difference between the interest rates in the EU and that in the US. The economy with a higher interest rate will attract more investments from foreigners seeking higher returns.

In the US, the Federal Reserve has kept the interest rate within a range of 0% – 0.25%. In the EU, the ECB interest rate is 0%. Since the interest rate differential between the two economies is low, we do not expect it to impact the EUR/USD exchange rate. Therefore, we assign a deflationary score of -1. That means we expect it to result in a mild bearish trend for the EUR/USD pair.

Conclusion

The exogenous analysis of the EUR/USD fundamentals gives an inflationary score of 4. This implies that in 2020, the EUR/USD pair has had a bullish trend. In the short term, this bullish trend is expected to persist.

Note that the EUR/USD pair has formed a support level along with the middle Bollinger band. Therefore we can say that our Fundamental analysis is being supported by our Technical Analysis as well. Cheers!

Categories
Forex Fundamental Analysis

EUR/USD Global Macro Analysis – Part 1 & 2

Introduction

In this analysis, we’ll focus on endogenous economic growth factors in the EUR and the US. We’ll also analyze the exogenous factors that will help us compare the economic performance in both regions.

Endogenous economic factors are inherent within the domestic economy and are primarily driven by domestic demand. On the other hand, exogenous factors are external economic factors that result from a country’s participation in the international markets. Both of these factors influence the fluctuation of the currencies from both countries.

Ranking Scale

We will rank both the endogenous and the exogenous economic factors on a scale of -10 to +10. A negative ranking shows that the economic factor had a deflationary impact on the currency. Conversely, a positive ranking implies that it had an inflationary impact.

USD Endogenous Analysis – Summary

The USD endogenous factors recorded a score of -19.1, implying a deflationary effect on the USD. This essentially means that according to these indicators, the USD has lost its value since the beginning of this year.

You can find the complete USD Endogenous Analysis here.

EUR Endogenous Analysis – Summary

The endogenous analysis of the EU economy shows a modest deflationary score of -8.5. This means that in 2020, the Euro has shed some of its inherent value.

The endogenous economic indicators in the Eurozone are an aggregate of the 27 member countries in the EU.

  • Monthly retail sales

It measures the inflation-adjusted value of retail sales. About 40.1% of all retail sales in the EU are from food, drinks, and tobacco. Electronics and furniture account for 11.5%, while computer equipment accounts for11.4%. 9.2% of the retail sales are attributed to clothing and footwear,  while pharmaceutical and medical products account for 8.9%.

In September 2020, retail sales in the EU dropped by 2%. Given that retail sales account for about 70% of the GDP, our correlation analysis, we assign the EU retail sales an inflationary score of 2.5.

  • Industrial production

This indicator measures the total output by manufacturers, mines, and utility industries in the EU. The value is adjusted for inflation. Note that the industrial sector in the EU is among the top employers.

In September 2020, industrial production dropped by 0.4%, which is an improvement from the drop of 17.1% recorded in April. However, the change in industrial production has been steadily falling from a peak of 12.4% in May.

Based on our correlation analysis, we assign the EU change in monthly industrial production a deflationary score of -2.

  • Unemployment rate

This indicator shows the percentage of the total workforce in the EU who are seeking gainful employment. The data shows the monthly change.

In September 2020, the unemployment rate in the EU was 8.3%. Throughout the year, the EU has experienced a steady increase in the unemployment rate. This is due to the economic effects of the coronavirus pandemic. However, our correlation analysis shows the minimal impact of the unemployment rate on the EU GDP. Therefore, we assign it a deflationary score of -2.

  • Employment change

As an economic indicator, employment change shows the quarterly change in the number of EU citizens who are gainfully employed. This indicator can also be used to show the ability of the economy to create more jobs. It measures both full-time and part-time employment.

In the third quarter of 2020, the EU employment change increased by 0.9%, showing that the EU economy is recovering from the slump of Q2 2020. Our analysis shows a higher correlation of the employment change with the changes in GDP. Hence, we assign it an inflationary score of 4.

  • Business confidence

The business sentiment is also referred to as the Industry Sentiment. It measures the economic sentiment among manufacturers, consumers, and employers in the EU by rating the current and future economic conditions.

The lowest business confidence recorded in 2020 was -32.3 in April 2020. Since then, the indicator has been steadily improving to -9.5 in October. Based on the correlation analysis with the EU GDP, we assign business confidence a deflationary score of -3.

  • Consumer Spending

Consumer spending measures the quarterly amount that households spend on goods and services for personal consumption. As an economic indicator, it can be used to show households’ welfare and the prevailing economic conditions. Since consumer expenditure accounts for about 70% of the EU GDP, any changes in the quarterly expenditure are bound to impact the GDP levels directly.

In Q2 of 2020, consumer spending dropped to € 1511.14 billion from € 1716.59 billion in Q1 of 2020. It is the largest drop ever recorded in history and can be attributed to the pandemic-induced economic recession.

Due to its high correlation to the change in GDP, we assign consumer spending a deflationary score of -5.

  • European Union Government Debt To GDP

This ratio compares what the EU economy produces and what it owes. It shows the efficiency of the economic process and the capability of the government to service its debts without overstretching the available resources. Investors can use this ratio to gauge whether the debt in an economy is becoming unsustainable.

Increasing levels of government debt and a stagnating GDP results in a deflationary effect for the domestic currency.

By the end of 2020, the EU government debt to GDP is expected to reach 95% from 79.3% recorded in 2019. The higher government debt to GDP in 2020 is a direct result of the aggressive measures out in place to curb deep recessions from the coronavirus pandemic.

Based on our correlation analysis, we assign a deflationary score of -6 to the EU government debt to GDP.

  • EU Rate of inflation

In the EU, the inflation rate is best measured using the consumer price index (CPI). It measures the overall monthly change in the prices of consumer goods and services. The rate of inflation can be used as gauge the purchasing trends among households.

In theory, a rise in inflation implies that consumers’ demand for goods and services is increasing. Conversely, a drop in inflation implies that demand is shrinking hence corresponding to lower GDP levels.

In September 2020, the rate of inflation in the EU decreased by 0.2%. It is, however, an improvement from the -0.4% recorded in July and August. Based on its correlation with GDP, we assign the EU rate of inflation a score of 3.

In the next article, we have posted the Exogenous Analysis of the EUR/USD pair to have a clear idea of whether this pair is bullish or bearish market conditions.

Categories
Forex Signals

Reverse Head & Shoulder Pattern Formation In The EUR/USD Pair

Categories
Forex Signals

EUR/USD Fibonacci Retracement in Play – Signal Seems to Reverse! 

The EUR/USD surged dramatically on the back of risk-on sentiment amid positive reports over the COVID19 vaccine, which dragged the pair higher above the 1.2074 level. On the higher side, the violation of the 1.2010 resistance level is now working as a support, and it can lead the pair further higher until 1..2160. The bullish bias remains dominant today, especially over the 1.2015 level. However, the EUR/USD pair has recently formed a tweezers top pattern around 1.2076, suggesting the bearish retracement’s odds. In this case, the EUR/USD can also drop until the support level of 1.2017 that marks 23.6% Fibonacci retracement. Let’s keep an eye on the 1.2060 support level today. 


Entry Price – Sell 1.20589

Stop Loss – 1.20989

Take Profit – 1.20189

Risk to Reward – 1:1

Profit & Loss Per Standard Lot = -$400/ +$400

Profit & Loss Per Micro Lot = -$40/ +$40

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368

Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

Categories
Forex Signals

EUR/USD Breaking Above Resistance Level – Brace for a Buy Trade!

The risk perceived EUR/USD pair gained traction on Friday after the optimism surrounding the market related to the coronavirus vaccine increased. The hopes for a quick economic recovery also increased along with the vaccine progress and supported the market’s risk sentiment that lifted the global equity market.

The news regarding vaccines from several candidates and their efficacy rates raised hopes that the economy would come back to its pre-pandemic levels, and that weighed on the safe-haven greenback. The EUR/USD pair is trading with a bullish bias at the 1.1974 area, facing immediate resistance at the 1.1975 area.

Closing of candles below this level suggests chances of bearish correction as the pair has entered the overbought zone. However, the bullish breakout of the 1.1975 level can extend the buying trend until the next resistance level of the 1.2010 level. The bullish bias remains dominants today. Let us consider taking a selling trade below the 1.1979 level, and above this, the next target stays at 1.1997.


Support Resistance
1.1885 1.1942
1.1856 1.1970
1.1828 1.1999
Pivot point: 1.1913

Entry Price – Buy 0.9025

Stop Loss – 0.9065

Take Profit – 0.8985

Risk to Reward – 1:1

Profit & Loss Per Standard Lot = -$400/ +$400

Profit & Loss Per Micro Lot = -$40/ +$40

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368

Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

Categories
Forex Signals

EUR/USD Triple Top Pattern Pushing the Pair Lower!


The EUR/USD is trading with a bearish bias at the 1.1844 level, having violated an upward trendline on the hourly chart. On the lower side, the support stays at 1.1832, and below this, the EUR/USD may find next support at 1.1814. On the higher side, the resistance can be found at the 1.1867 level. The bullish bias remains dominants today as the MACD and 50 periods EMA support a bullish trend. We are already holding a buying trade from yesterday; therefore, you are advised to follow our forex signals page for more updates on the EUR/USD pair.

Categories
Forex Signals

EUR/USD Violates Triple Top – Upward Trendline Supports!

The EUR/USD currency pair managed to extend its previous 2-day gaining streak and remained bullish around near above mid-1.1800 level, mainly due to the broad-based U.S. dollar selling bias, triggered by the risk-on market sentiment, which keeps the currency pair higher. Hence the market trading sentiment was being supported by the coronavirus vaccine-led enthusiasm. 

On the contrary, the buying interest around the currency pair was capped by the intensifying virus fugues in Europe, which raised doubts over the Eurozone economic recovery and became 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 1.1849 and consolidating in the range between the 1.1834 – 1.1854.

The EUR/USD traded bullish at 1.1850 level, but recently it has formed a Doji pattern followed by bullish candles, suggesting that the buyers are exhausted, and sellers may enter the market soon. Therefore, we can expect the EUR/USD price to trade bearish until the 1.1838 level, the support level extended by an upward trendline on the hourly timeframe. Bullish crossover of 1.1856 level can also trigger buying until 1.1880.


 

Entry Price – Buy 1.18588

Stop Loss – 1.18188

Take Profit – 1.18988

Risk to Reward – 1:1

Profit & Loss Per Standard Lot = -$400/ +$400

Profit & Loss Per Micro Lot = -$40/ +$40

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368

Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

Categories
Forex Signals

EUR/USD Regression Channel Continues to Drive Selling – Update on Signal! 

The EUR/USD pair was closed at 1.16445 after placing a high of 1.17041 and a low of 1.16398. The EUR/USD pair extended its losses for the 5th consecutive day on Friday and remained bearish throughout the day. The main driver behind the steepest fall in Euro currency this week was the market concerns about the rising number of coronavirus infections in Europe and the effects of the social distancing measures to curb them. 

The latest lockdown restrictions introduced by France and Germany and the tighter restrictions applied in Italy and Spain raised alarms about their impact on the fragile economic recovery and weighed on the single currency Euro that ultimately added pressure on EUR/USD pair. 

Furthermore, the European Central Bank hinted to unleash new stimulus measures in December to counteract the pandemic’s negative impact and weighed on the Euro currency that added further losses in EUR/USD pair on Friday.

Meanwhile, on the data front, at 11:30 GMT, the French Consumer Spending for September was dropped to -5.1% against the expected -1.5% and weighed on Euro. The French Flash GDP for the quarter raised to 18.2% against the expected 15.0% and supported Euro. At 12:00 GMT, German Retail Sales for September dropped to -2.2% from the forecasted -0.6% and weighed on Euro. At 12:45 GMT, the French Prelim CPI for October fell to -0.1% against the forecasted 0.0% and weighed on Euro. At 13:00 GMT, the Spanish Flash GDP for the quarter surged to 16.7% after placing a high of 13.5% and supported Euro. 

The Italian Monthly Unemployment Rate declined to 9.6% from the forecasted 10.1% and weighed on Euro. At 14:00 GMT, German Prelim GDP for the quarter raised to 8.2% from the forecasted 7.3% and supported Euro. The Italian Prelim GDP for the quarter also raised to 16.1% from the forecasted 11.1% and supported Euro. At 14:58 GMT, the Italian Prelim CPI for October remained flat with the expectations of 0.2%.

Support Resistance

1.1798 1.1789

1.1672 1.1834

1.1626 1.1870

Pivot point: 1.1753


The EUR/USD traded with a bearish bias, having dropped below the support area of 1.1653. At the moment, the EUR/USD is likely to face the resistance at the same level of 1.1653. On the higher side, a bullish crossover of 1.1653 increases the odds of continuing an upward trend, and it may lead the EUR/USD price towards 1.1700. Further bullish crossover of this area can lead the pair towards the 1.1758 level. Conversely, a bearish crossover of 1.1653 support level has opened additional room for selling until the 1.1613 area as a double bottom support area extends the level.  

Entry Price – Buy 1.1646

Stop Loss – 1.1686

Take Profit – 1.1606

Risk to Reward – 1:1.25

Profit & Loss Per Standard Lot = -$400/ +$500

Profit & Loss Per Micro Lot = -$40/ +$50

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368

Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

Categories
Forex Market Analysis

Daily F.X. Analysis, October 19 – Top Trade Setups In Forex – Eyes on ECB and Fed Officials Speech!  

On the news side, the economic calendar is filled with high impact speeches from the central bank officials such as the U.S. Fed Chair Powell and ECB President Lagarde. The U.S. Fed Chair Powell participates in a panel discussion about cross-border payments and digital currencies at the International Monetary Fund’s annual meeting, via satellite. Audience questions are expected. Simultaneously, the U.K MPC Member Cunliffe and the FOMC Member Clarida are also due to speak during the U.S. sessions.

Economic Events to Watch Today  

 


 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17043 after placing a high of 1.17458 and a low of1/16937. Overall the movement of the EUR/USD pair remained bullish throughout the day. On Friday, the EUR/USD pair showed limited movement as most of its daily gains vanished during late trading sessions after the U.S. dollar became strong across the board. The U.S. dollar became stronger after the hopes for the next round of stimulus ahead of upcoming elections faded away.

Meanwhile, the financial markets were calmed on Friday by the hopes that Pfizer could apply for a U.S. emergency use of its coronavirus vaccine in November. The financial markets were affected by the coronavirus pandemic’s resurgence that could undermine the fragile economic recovery. The Wall Street futures and European stocks came back into positive territory on Friday after the U.S. pharmaceutical group said that the vaccine’s regulatory filing could come as soon as safety data are available in the 3rd week of November.

The rising risk sentiment in the market helped EUR/USD stay on the positive trend on Friday despite the rising number of coronavirus cases across Europe. On the data front, at 14:00 GMT, the Final CPI for the year from Eurozone remained flat with the projections of -0.3%. The Final Core CPI for the year also came in line with the expectations of 0.2%. Whereas, the Trade Balance from Eurozone showed a surplus of 21.9B against the forecasted 18.1B and the previous 19/3B and supported single currency Euro that ultimately added strength in EUR/USD pair.

Whereas, the Italian Trade Balance was released at 14:02 GMT that showed a surplus of 3.93B against the forecasted 7.23B and weighed on the Euro. Most data from Eurozone came in line with the forecasts and had a null-effect on EUR/USD pair. From the U.S. side, the Core Retail Sales rose to 1.5% against the forecasted 0.4%, and the Retail Sales was advanced to 1/9% against the projected 0.7% and supported the U.S. dollar. The gains in EUR/USD pair were dragged down by the strong Retail Sales figures from the U.S. that added strength to the U.S. dollar and exerted pressure on EUR/USD pair’s prices on Friday.

The combination of the severe economic downturn due to coronavirus and the high value of the Euro weighed heavily on inflation levels on the Eurozone economy. That is why most of the daily gains in EUR/USD were lost on Friday as the continuous threat of deflation remains a severe problem for policymakers; however, it seems like the negative trend would continue for some time.

Whereas the Capacity Utilization Rate from the U.S. dropped to 71.5% against the expected 72.1%, and the Industrial Production from the U.S. also declined to -0.6% from the forecasted 0.6% and weighed heavily on the U.S. dollar. U.S. reports’ negative results exerted pressure on the U.S. dollar and ultimately raised the EUR/USD pair’s gains.

On the other hand, the U.S. dollar was stronger because of the U.S. President’s offer to increase the size of a fiscal stimulus package by Republicans to win the Democrats’ support. The attempt to increase the stimulus package’s size was due to securing his position in the upcoming elections by providing aid to the struggling Americans. However, there are still no signs that Democrats and Republicans will reach an agreement before November 3rd. The strong U.S. dollar weighed on EUR/USD pair and capped further gains in the currency pair on Friday.


Daily Technical Levels

Support Resistance

1.1676     1.1748

1.1646     1.1790

1.1605     1.1820

Pivot point: 1.1718

EUR/USD– Trading Tip

The EUR/USD is trading at 1.1706 level, holding above an immediate double bottom support level of 1.1693. The U.S. dollar is likely to show some volatility during the day on the back of high and medium impact economic events from the United States. A stronger dollar may trigger a selling trend until the 1.1656 level, while the resistance can be found around 1.1725 and the 1.1748 levels.


GBP/USD – Daily Analysis

The GBP/USD pair was closed at1.29150 after placing a high of 1.29622 and a low of 1.28616. Overall the movement of the GBP/USD pair remained flat throughout the day. On Friday, the GBP/USD pair remained flat as the day’s opening and closing levels for the currency pair remained the same at 1.29150. However, the GBP/USD pair remained marginally lowered for the week because of the contradictory reports. The coronavirus and the U.S. Presidential elections headlines and the Brexit developments had a great impact on GBP/USD pair’s prices during the week.

The GBP/USD pushed to the higher side after the hopes that the U.K. and E.U. could continue trade talks emerged in the market. The U.K. foreign secretary Dominic Raab said that both sides were close to a deal, and this encouraged hopes that PM Boris Johnson will not walk away from further discussions. However, the gains in GBP/USD pair could not live for long as the same hopes faded away after the spokesman to PM Boris Johnson said that the trade talks between the U.K. and E.U. were over unless there was a fundamental change from the economic bloc. These comments weighed on the local currency British Pound, and the pair GBP/USD lost all of its gains from the earlier session.

A day earlier, the E.U. leaders dropped their commitments to work intensively with the U.K. to reach a trade deal and said Britain should make the necessary moves to secure an agreement. The key sticking points for Brexit negotiations were still the level playing field, fisheries, and governance issues.

The lack of progress in Brexit talks and the rising number of coronavirus cases in Britain weighed on local currency GBP. There was no macroeconomic data release from the United Kingdom on the data front, so traders kept following the U.S. dollar movements on Friday. At 17:30 GMT, the Core Retail Sales for September from the U.S. advanced to 1.5% from the projected 0.4%. The U.S. dollar Retail Sales also increased to 1.9% against the forecasted 0.7% and supported the U.S. dollar. The Capacity Utilization Rate from the U.S. dropped to 71.5% from the forecasted 72.1% and weighed on the U.S. dollar. The Industrial Production from the U.S. dropped to -0.6% from the anticipated 0.6% and weighed heavily on the U.S. dollar. The economic data from the United States on Friday also came in mixed and provided a null effect on the GBP/USD pair.

Apart from economic data, the U.S. dollar was strong on Friday due to the U.S. stimulus package’s latest developments. It seems like U.S. President Donald Trump wants to win elections and secure his position for the second time on November 3rd. Trump proposed increasing the $1.8trillion package to provide aid to struggling areas before upcoming elections. However, this statement was not enough to raise bars for the GBP/USD pair on Friday.

Over Brexit Front, the PM Boris Johnson agreed to extend the E.U.’s trade talks until October. It was already agreed between the PM Johnson and E.U. Commission president Ursula von der Leyen. The extended deadline raised the chances for a Brexit deal before the end of the transitions period on December 31st. The rising optimism in the market helped the risk sentiment and favored the GBP/USD pair’s upward direction. However, the upward trend of the currency pair was reversed due to the rising number of coronavirus cases, and the pair ended its day at the same level it had started its day with.


Daily Technical Levels

Support Resistance

1.2859     1.3000

1.2804     1.3086

1.2718     1.3141

Pivot point: 1.2945

GBP/USD– Trading Tip

The GBP/USD is trading at 1.2890 level, having supported over 1.2890 level. Above this, the next target is likely to be found around 1.2957 and 1.3020 level. Simultaneously, a bearish breakout of the 1.2890 support level can extend selling bias until 1.2840. The bearish bias remains solid below the 1.2890 mark. The cable may exhibit a breakout on the release of U.S. related economic events, especially the retail sales and consumer confidence. The leading indicators, such as MACD and RSI, support selling; therefore, it’s worth taking a selling trade below 1.2880 today. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.377 after placing a high of 105.444 and a low of 105.188. Overall the movement of the USD/JPY pair remained bearish throughout the day. Despite the US dollar’s strength across the board on Friday, the pair USD/JPY dropped and posted losses for the day. It was mainly due to the US stimulus measure’s mixed developments in the market.

On Friday, the US President Donald Trump said that he was ready to increase the $1.8 trillion stimulus relief package for coronavirus. This news raised the hopes that the next round of stimulus will be delivered before elections on November 3rd and raised risk sentiment that supported the USD/JPY pair.

However, the same hopes were faded away after the Senate Majority Leader Mitch McConnell said that he wanted to put forward a highly targeted proposal of $500 billion despite the prior skinny bill that was failed. After Trump’s above statement, the Republican senator’s comments showed that Republicans were against the big stimulus package before elections. It raised concerns that stimulus will not be delivered before elections and weighed on risk sentiment, and dragged the USD/JPY pair on Friday to the lower side.

Meanwhile, the Federal Reserve Bank of Minneapolis President Neel Kashkari said on Friday that the US regulators were going in the wrong direction when it comes to the banks, and the arguments banks use against the strict requirements amount to nonsense. He added that there should be tough and higher capital requirements on the bigger banks.
At 17:30 GMT, the highlighted Core Retail Sales from the United States advanced to 1.5% against the forecasted 0.4% and supported the US dollar. The US dollar Retail Sales also raised to 1.9% from the forecasted 0.7% and supported the US dollar. At 19:00 GMT, the Prelim UoM Consumer Sentiment for October also raised o 81.2 against the forecasted 80.2 and supported the US dollar.

All these highlighted macroeconomic releases from the US gave strength to its local currency but failed to provide upside momentum to the USD/JPY pair on Friday as the focus of trades has been shifted towards stimulus package and upcoming US presidential elections.

At 18:15 GMT, the Capacity Utilization Rate from the United States for September dropped to 71.5% against the projected 72.1% and weighed on the US dollar. In August, the Industrial Production from the US also dropped to -0.6% against the forecasted 0.6% and weighed on the US dollar.

At 19:00 GMT, the Business Inventories in August remained flat with a projection of 0.3%. The Prelim UoM Inflation Expectations came in as 2.7% in October against September’s 2.6%. At 23:00 GMT, the Federal Budget Balance also came in line with the expectations of -124.6B.
The US side’s negative data weighed on the US dollar, which ultimately dragged the USD/JPY pair on the downside on Friday. Furthermore, the risk sentiment was also supported by the news that Pfizer could be applied for a US emergency use of its coronavirus vaccine in November. The raised risk sentiment helped limit the losses of the USD/JPY pair on Friday.


Daily Technical Levels

105.05     105.70

104.82     106.12

104.40     106.36

Pivot point: 105.47

USD/JPY – Trading Tips

The USD/JPY traded sideway, with a neutral bias within a narrow trading range of 105.600 level to the 105.250 mark. Most of the selling triggered following the USD/JPY disrupted an upward channel at the 105.900 mark on Monday. The USD/JPY is trading at 105.459 marks, the support that’s was prolonged by double bottom mark on the two-hourly charts. A bearish violation of the 105.450 mark may encourage additional selling unto the 105.070 support level as the MACD, and the 50 periods EMA are in support of selling sentiment today. Let’s consider opening sell trade beneath 105.60 and buying over 105.050 level today. Good luck!  

Categories
Forex Signals

EUR/USD Sideways Session Continues – Brace for Sell Position

The EUR/USD failed to stop its previous session losses and further offers around below the 1.1800 level. However, the bearish sentiment around the currency pair was boosted after the fresh downbeat released German ZEW headline numbers for October, showing that the Economic Sentiment Index came in at 56.1 against 73.0 expectations 77.4 last. This, in turn, undermined the sentiment around the shared currency and contributed to the currency pair losses. 

Apart from this, the reason for the bearish bias around the currency pair could also be associated with the fresh reports suggesting the re-imposition of stricter restrictions in Germany, Spain, and France to stop the coronavirus second-wave. On the flip side, the broad-based U.S. dollar strength, backed by the upbeat market sentiment, also played a major role in undermining the currency pair. At the moment, the EUR/USD currency pair is currently trading at 1.1793 and consolidating in the range between the 1.1779 – 1.1817.

At the data front, the German ZEW headline numbers for October showed that the Economic Sentiment Index arrived in at 56.1 against 73.0 expectations and 77.4 last. Moreover, the currency pair losses were also bolstered by reports suggesting a sharp rise in the coronavirus cases in Spain, France, and German. It is very downhearted headlines that the second-wave of the virus is picking up pace in Europe once again, which leads re-imposition of stricter restrictions in Germany, Spain, and France to contain the coronavirus second-wave.

According to the coronavirus (COVID-19) data from Germany’s Robert Koch Institute (RKI), the country’s cases rose around ~39,000 as of yesterday while the latest update today added 13 deaths more so that brings the total tally to 9,634 persons. This, in turn, undermined the shared currency and contributed to the currency pair.

Apart from this, the risk sentiment has been flashing red since the Asian session started, witnessed by the S&P 500 Futures’ negative performance. However, the reason for the downbeat trading sentiment could be associated with the worrisome headlines concerning Brexit and on-going tension between the U.S. and China. dislike for the U.S. proposal to the Congress about selling three sales of advanced weaponry to Taiwan recently renewed the trade war saga

At the US-China front, the renewed conflict between the U.S. and China fueled after the Dragon Nation China’s Washington Embassy lashed out at the U.S. passage of the three advanced weaponry sales to Taiwan during late-Monday, per Reuters. As per the latest report, China’s representative said, “China consistently and firmly opposes U.S. arms sales to Taiwan.” This, in turn, added additional pressure around the market sentiment.

Across the pond, the recent coronavirus (COVID-19) warning from the U.S. health official Anthony Fauci and stimulus uncertainty also keep the market trading sentiment under pressure. As per the keywords, “Dr. Anthony Fauci, director of the U.S. National Institute of Allergy and Infectious Diseases (NIH), suggests another 181,000 deaths in the United States by February. 

As per the latest report, the US Centers for Disease Control and Prevention (CDC) reported 7,740,934 cases of the new coronavirus yesterday, with an increase of 46,069 from its previous count. As in result, the broad-based U.S. dollar remains on the bullish track and still reporting gains on the day. However, the U.S. dollar gains were being supported by the reports suggesting that the U.K. pharma giant, Johnson, and Johnson, stopped its COVID-19 vaccine trial due to an unexplained illness, which eventually boosted the safe-haven assets like the U.S. dollar.

However, the U.S. dollar gains seem rather unaffected by the U.S. political uncertainty ahead of U.S. elections. Thus, the gains in the U.S. dollar become the key factor that kept the currency pair lower. Whereas, the U.S. Dollar Index, which tracks the greenback against a bucket of other currencies, rose by 0.11% to 93.207 by 10:04 PM ET (2:04 AM GMT). Looking forward, the market traders will keep their eyes on the U.S. Consumer Price Index (CPI) data. Furthermore, the risk catalyst like geopolitics and the virus woes, not to forget the Brexit, will not lose their importance.

Daily Support and Resistance

S1 1.1626

S2 1.1672

S3 1.1694

Pivot Point 1.1718

R1 1.174

R2 1.1764

R3 1.181

The EUR/USD pair is supported over 1.1790 level, which marks double bottom level on the 4-hour timeframe. Above this level, the EUR/USD is likely to bounce off until the 1.1811 level, and the bullish breakout of the 1.1831 level can also extend buying until the next target level of 1.1870. Conversely, the bearish breakout of the 1.1790 level can extend the selling trend until the 1.1750 level.

Entry Price – Buy 1.17872

Stop Loss – 1.18272

Take Profit – 1.17472

Risk to Reward – 1:1

Profit & Loss Per Standard Lot = -$400/ +$400

Profit & Loss Per Micro Lot = -$40/ +$40

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368

Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

Categories
Forex Signals

EUR/USD Violated Symmetric Triangle Pattern – Brace for Selling! 

During the Friday’s European trading hours, the EUR/USD currency pair succeeded to extend its previous session gaining streak and hit the intra-day high level around above 1.1800 level mainly due to the broad-based U.S. dollar selling bias, triggered by the market risk-on sentiment. However, the market risk tone was being supported by optimism over a possible vaccine and treatment for the highly infectious coronavirus. 

Meanwhile, the increasing expectations of further U.S. stimulus packages also boosted the market trading sentiment, which keeps the U.S. dollar lower. Apart from this, the United States’ political uncertainty also weighs on the broad-based U.S. dollar, which provided an additional boost to the currency pair. 

On the contrary, Europe’s quickly rising coronavirus (COVID-19) cases fueled the worries over the EUR economy recovery, which becomes the key factor that kept the lid on any additional gains in the currency pair. Meanwhile, the latest report that the Spanish Prime Minister (PM) Pedro Sánchez announced a state of emergency in Madrid also played a significant role in capping further currency pair gains.

However, the reason for the risk-on market sentiment could be associated with the renewed probabilities of the further stimulus package, triggered after the U.S. President Donald Trump stepped back from his earlier ‘NO’ to the coronavirus (COVID-19) aid package talks. This was witnessed after the discussions between House of Representative Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin over the U.S. stimulus package resumed overnight. Apart from this, the coronavirus (COVID-19) vaccine’s hopes also favored the market risk tone, which eventually underpinned the safe-haven U.S. dollar. 

As per the latest report, China joins the World Health Organization’s virus vaccine program after returning from one week-long holiday, which initially fueled the hopes of a disease cure. Meanwhile, the market trading sentiment was further bolstered by the positive reports that Gilead and Regeneron’s vaccine research efforts will offer strong results to stop the virus.

As in result, the broad-based U.S. dollar failed to stop its previous session losing streak & remained depressed during the European session as the investors continue to sell U.S. dollars on the back of the U.S. fiscal stimulus hopes, which keeps the market sentiment bullish. Furthermore, the U.S. dollar losses could also be associated with political uncertainty in the U.S. ahead of U.S. elections. Thus, the losses in the U.S. dollar kept the currency pair higher.

On the contrary, the Spanish Prime Minister (PM) Pedro Sánchez announced a state of emergency in Madrid as the COVID-19 cases in the U.K. and Germany are also worrisome. At the coronavirus front, the coronavirus cases grew to 314,660, with a total of 9,589 deaths toll, according to the German disease and epidemic control center, Robert Koch Institute (RKI) report. In the meantime, the cases rose by 4,516 on the day while the death toll rose by 11. The daily rise in new cases topped 4,000 for the second day in a row, the highest numbers since April 10. These virus fears could be considered one of the key factors that kept the lid on any additional currency pair gains.


Daily Support and Resistance

S1 1.1626

S2 1.1672

S3 1.1694

Pivot Point 1.1718

R1 1.174

R2 1.1764

R3 1.181

The EUR/USD pair is consolidating below 1.1780 level, and the closing of candles below the triple top resistance level of 1.1780 level may drive the selling trend in the EUR/USD pair until the support level of 1.1758 and 1.1740 level. Conversely, the bullish breakout of the 1.1780 level can trigger a sharp buying trend until today’s 1.1807 mark. Checkout a trading signal below.. 

Entry Price – Sell 1.17755

Stop Loss – 1.18155

Take Profit – 1.17355

Risk to Reward – 1:1

Profit & Loss Per Standard Lot = -$400/ +$400

Profit & Loss Per Micro Lot = -$40/ +$40

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368

Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

Categories
Forex Market Analysis

Daily F.X. Analysis, October 05 – Top Trade Setups In Forex – Eyes on Eurogroup Meetings! 

The Asian sessions exhibit thin volatility as Chinese banks are closed in observance of National Day. However, the European and the U.S. session may drive some volatility on the back of Services PMI, Euro-group Meetings, and ISM Non-manufacturing PMI data. Let’s keep an eye on them today.

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17160 after placing a high of 1.17488 and a low of 1.16955. . On Friday, the EUR/USD currency pair posted losses on the back of a strong U.S. dollar and weak Euro due to declining Consumer prices in many countries of the European Union. 

The 19-nation Eurozone saw a decline in Consumer prices on Friday more than forecasted in September and kept the pressure on the European Central Bank over the decision to add further stimulus help in the economy for fighting against the coronavirus crisis. At 11:45 GMT, the French Gov Budget Balance was released that showed a deficit of -165.7B against the previous decline of -151.0B. At 12:00 GMT, the Spanish Unemployment Change showed that the unemployment was reduced by -26.3K figure against the forecasted positive 59.5K and helped Euro gained strength. 

At 14:00 GMT, the Flash estimate for the year of Consumer Price Index for the whole Eurozone declined to -0.3% against the forecasted -0.1% and weighed on Euro. The Core CPI Flash estimate for the year also declined to 0.2% against the forecasted 0.5% and weighed on Euro. The weak inflation rate from Eurozone could be attributed to many reasons, including the temporary sales-tax cut in Germany, subdued demand, and the declining import costs due to the appreciation of the Euro.

The President of the European Central Bank (ECB), Christine Lagarde, has already warned that the region’s prices will slip in the months coming ahead, but she also said they would turn up again in early 2021. The ECB is currently looking to adjust its target inflation of 2% as part of its strategic review as the average inflation in 2022 is projected as 1.3%, which is far below its goal.

Many policymakers have started to lay the ground for further support from the government as one of the executive members of ECB said that there was less risk in delivering too much support than delaying and being shy to deliver. The ECB Vice President Luis de Geindos said last week that there was no need to immediately take any decision; however, in time of need, the Bank could recalibrate its 1.35 trillion euros emergency bond-purchase program. There are also some predictions that this program will be increased by 350 billion euros this year in December. All these things kept the Euro currency under pressure on Friday and added weight on EUR/USD pair prices.

The U.S. dollar was strong across the board after releasing the Unemployment Rate and Revised Consumer Confidence report. At 17:30 GMT, the U.S. job loss rate declined to 7.9% in August against the projected 8.2% and supported the U.S. dollar. The Revised UoM Consumer Sentiment rose to 80.4 against the anticipated 78.9 and supported the U.S. dollar. The U.S. dollar’s strength was also supported by the news that U.S. President Donald Trump and his wife were diagnosed with coronavirus. The U.S. Dollar Index rose to 93.918 level in late Friday after this news raised the safe-haven appeal and the U.S. dollar gained due to its safe-haven status and weighed on EUR/USD pair.

The pair was also down due to low-risk sentiment and declining U.S. stocks that fell sharply after the news that Trump and First Lady tested positive for COVID-19. The S&P 500 futures were down by 1.3%, the Dow Futures were down by 1.2%, and the NASDAQ was down by 1.8%; this weighed further on EUR/USD pair on Friday.

Daily Technical Levels

Support Resistance

1.1724     1.1739

1.1715     1.1745

1.1709     1.1754

Pivot point: 1.1730

EUR/USD– Trading Tip

The EUR/USD is trading over a resistance become a support level of 1.1728 level. Above this level, the EUR/USD can soar until the next resistance level of 1.1740 and 1.1760. Conversely, a bearish breakout of 1.1720 can lead EUR/USD pair towards 1.1711 areas. Let’s keep an eye on the Eurogroup meeting to determine further trends in the market. The bullish bias remains dominant today.


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29345 after placing a high of 1.29538 and a low of 1.28364. The GBP/USD pair remained positive throughout the day on the back of rising hopes that this weekend there might be a breakthrough in the Brexit deal as PM Boris Johnson and ECB President Ursula Von der Leyen are set to meet.

Pound investors see this weekend meeting as a positive sign for the Brexit deal and raised the British Pound value on renewed hopes that this meeting will provide some fresh hopes on the Brexit deal. However, the gains remain limited as there were many uncertainties in the market weighing on the riskier assets.

During the late-night Thursday, the news that U.S. President Donald Trump and his wife, First Lady, tested positive for COVID-19. The uncertainty related to the U.S. President and a candidate for the upcoming U.S. Presidential Election, Donald Trump’s health, raised concerns that it might cause the election’s complications.

Although the U.S. dollar gained in this uncertainty due to its safe-haven status, the gains remain limited and failed to reverse the GBP/USD pair’s an upward trend as the issue affects the U.S. in particular. So, in this situation, investors found other safe-havens like the Japanese Yen comparatively more appealing.

On the data front, the highly awaited Average Hourly Earnings for September declined to 0.1% on Friday against the forecasted 0.5% and weighed on the S.U. dollar. The Non-Farm Employment Change revealed that the U.S. created only 66K jobs in September projected as 900K and weighed heavily on the U.S. dollar. In August, the factory orders of the U.S. also fell to 0.7% from the projected 1.5% and weighed on the U.S. dollar.

Due to negative macroeconomic data, the weak U.S. dollar added further support to the rising GBP/USD prices on Friday. Meanwhile, the pair GBP/USD remained supported by the progress being made in the Brexit process and the U.S. Presidential Elections. The hopes in the market raised that weekend talks could lead to a breakthrough or approve further months of negotiations due to comments that progress has been made, but some significant gaps were still there. 

If some more time is provided for negotiations, then the Brexit deal might get approved, and that is why investors were cheering the news of a meeting between Johnson and Ursula. Furthermore, the GBP/USD pair’s gains were capped by the rising number of coronavirus cases in the U.K. U.K. reported roughly 12,900 cases in a single day that was the biggest daily record that raised fears that a full lockdown could be imposed in the U.K. The U.K. has already imposed a lockdown in some areas, and fears for further restrictions capped further gains in GBP/USD pair. The investors will look forward to Bank of England’s Haldane’s speech on Monday to find fresh clues about the pair’s movement.

Daily Technical Levels

Support Resistance

1.2912     1.2948

1.2896     1.2968

1.2876    1.2984

Pivot point: 1.2932

GBP/USD– Trading Tip

The GBP/USD is holding below a strong resistance level of 1.2954 level after violating the narrow trading range of 1.2835 – 1.2810. Above this resistance level of 1.2954, the GBP/USD may go after the 1.3000 level. The leading technical indicators such as 50 periods EMA and MACD suggest bullish bias in the Sterling; however, the recent closings below the 1.2950 level can drive selling bias until the 1.2885 level today. Consider taking selling trade below 1.2955 level or buying above the same level today. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.361 after placing a high of 105.664 and a low of 104.941. Overall the movement of the USD/JPY pair remained bearish throughout the day. The pair USD/JPY fell to its seven days lowest level on Friday amid the U.S. President’s shocking news being infected with the coronavirus. In the early trading session on Friday, the pair suffered heavy selling bias; however, during the late trading session, the pair recovered most of its daily losses but remained bearish all day.

On the data front, at 04:30 GMT, the Unemployment Rate from Japan remained flat with 3.0% expectations in August. 

At 04:50 GMT, the Monetary Base for the year from Japan raised to 14.3% from the forecasted 11.9% and supported the Japanese Yen. The Consumer Confidence from Japan was released at 10:00 GMT that raised to 32.7 from the projected 31.6 in September and supported the Japanese Yen. The strong JPY weighed on the USD/JJPY pair, and the pair started to decline on Friday.

However, the pair was already under pressure due to Trump’s late-night announcement being infected by COVID-19. He twitted that he and the Frist Lady of the U.S. were tested positive for coronavirus. This news kept the uncertainty higher in the market as the 2020 U.S. Presidential Elections were coming, and an influencing candidate fell sick of coronavirus. The news came in hours after a top adviser to U.S. President Donald Trump was tested positive for COVID-19.

The bullish bets in the Japanese Yen caught up after this news as the issue was related to the United States and investors found the Yen more appealing. The rising JPY added further pressure on the USD/JPY pair that dropped to its 7-days lowest level. In the late trading session, the U.S. dollar saw some buying that capped some earlier daily losses in the USD/JPY pair on Friday. The U.S. Dollar Index posted gains on Friday with reaching at 93.918 level in the late trading session. The US Stocks also declined on Friday amid the shocking news with S&P futures down by 1.3%, and Dow futures fell by 1.2% along with NASDAQ futures down by 1.8%. 

From the U.S. side, the Average Hourly Earnings for September declined to 0.1% from the anticipated 0.5% and weighed on the U.S. dollar. The Non-Farm Employment Change also dropped to 661K against the projected 900K and weighed on the U.S. dollar. Simultaneously, the Unemployment Rate in August dropped to 7.9% from the forecasted 8.2% that supported the U.S. dollar.

After these releases, the President of Philadelphia Federal Reserve, Patrick Harker, provided his reviews over Fed’s new framework. He said that the employment gap in society would be closed by allowing inflation to move slightly higher. He added that more support would be needed from governments and employers to ensure that lower-income workers could benefit from it. Harker also stressed the need to build an equitable workforce recovery and added that it would not be easy to recover all lost jobs during a pandemic crisis. Harker suggested that a program is needed to help workers provided better jobs and pay. Harker’s positive comments provided some strength to the U.S. dollar that was further supported by the late session positive data release.

At 19:00 GMT, the Revised Consumer Sentiment raised to 80.4 from the projected 78.9 and supported the U.S. dollar. Whereas, the Revised UoM Inflation Expectations came in at 2.6%. These positive updates gave the U.S. dollar strength and capped further losses in the USD/JPY pair.

Daily Technical Levels

Support Resistance

105.34     105.65

105.16     105.78

105.04     105.96

Pivot point: 105.47

USD/JPY – Trading Tips

The USD/JPY is also trading neutral at 105.560 amid thin trading volume and China national holiday today. The downward trendline is extending resistance at 105.560 level on the two-hourly timeframes today. The closing of Doji candles below the trendline is suggesting neutral bias among traders. The technical side of USD/JPY may extend the pair lower towards 105.200, and the series for EMA is now developing support at 105.400 level. On the flip side, the bullish breakout of 105.590 level may lead the safe haven pair towards 105.800. Consider taking buying trade over 105.450 level and selling below the same today. Good luck! 

 

Categories
Forex Market Analysis

Daily F.X. Analysis, September 23 – Top Trade Setups In Forex – Manufacturing PMI in Focus! 

On the news, the eyes will remain on the PMI figures from Eurozone, United Kingdom, and the United States. All of the indicators are expected to perform better than before, therefore, buying can be seen in EUR, GBP during the European session and selling during the U.S. session.

Economic Events to Watch Today  

 


 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17062 after placing a high of 1.17737 and a low of 1.16914. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD pair extended its losses on Tuesday and dropped to its lowest till July 27 amid the broad-based U.S. dollar strength. The pressure on EUR/USD pair was brought up by the hawkish comments from Evans and Powell on Tuesday.

In the earlier trading session, the U.S. stocks were higher ahead of Powell’s testimony before U.S. Congress. Meanwhile, the worries about the resurging coronavirus cases from across the globe continue to weigh. 

The S&P 500 futures and NASDAQ rose by 0.1% and 0.4% respectively on Tuesday after posting losses for four consecutive days. At the same time, Dow Jones Industrial Average continued to fell for the 5th consecutive day on Tuesday by 0.2%.

On the European side, the European stock market rebounded on Tuesday after the session’s sharp losses. Overall the market tone in Europe remained depressed amid the concerns that new lockdowns will disrupt the region’s recovery.

The fresh coronavirus outbreak in Europe has raised fears for more new lockdowns on the continent as PM Boris Johnson told people to work from home and imposed restrictions on bars, restaurants, and parks to tackle the second wave of coronavirus. Meanwhile, several European countries, including France, Spain, and Greece, have already imposed renewed lockdown restrictions. 

These virus-related tensions kept the local currency under pressure and dragged the EUR/USD pair on the downside.

Furthermore, on the U.S. side, the focus was all over on the testimony of Fed Chair Jerome Powell who said that there was no doubt that the U.S. economy was recovering, however, the recovery was still dependent on the COVID-19.

He said that economic activities had come out of its depressed phase that started in the second quarter of this year when the lockdown was imposed globally. He explained that many economic indicators were showing improvement and a full recovery could only come when people become confident that a broad range of activities could be re-engaged. 

Moreover, the U.S. secretary of State, Steven Mnuchin, urged more spending to help economic recovery from the coronavirus pandemic. The fed important official Chares Evans said that interest rates could be raised before inflation reached 2%. These hawkish comments from the Fed supported the U.S. dollar that ultimately weighed on EUR/USD pair and supported its daily losses.

On the data front, the Consumer confidence from Europe came in as -14 against the forecasted -15 and supported Euro that capped further losses in EUR/USD pair. The Richmond Manufacturing Index on Tuesday from the U.S. increased to 21 from the predicted 12 and helped the U.S. dollar that added further pressure on EUR/USD pair.

Daily Technical Levels

Support Resistance

1.1709      1.1851

1.1649      1.1933

1.1568      1.1993

Pivot Point: 1.1791

EUR/USD– Trading Tip

The stronger U.S. dollar has also driven sharp selling in the EUR/USD pair as it trades at 1.1680 level today. The pair ha formed three black crows pattern on a daily timeframe, which is suggesting odds of selling bias in the EUR/USD. However, the EUR/USD has closed a Doji candle at 1.1685 level and we may see some bullish correction over 1.1676 until the next resistance level of 1.7020 and 1.1745 level today. 


GBP/USD – Daily Analysis

During Wednesday’s European trading session, the GBP/USD currency pair extended its previous day losing streak and hit the multi weeks low near below the 1.2700 level. The currency pair hit a multi-day low the previous day after the Bank of England (BOE) Governor Andrew Bailey delivered downbeat comments and UK PM Boris Johnson announced activity restrictions to control the coronavirus (COVID-19) resurgence risk. Apart from this, the losses in the currency pair were further bolstered by the reports suggesting that the U.K.’s virus-lead deaths raised to a 2-month high, which fueled the worries about the U.K. economic recovery and undermined the GBP currency. 

Meanwhile, the on-going Brexit woes also prob the currency pair bulls. Across the pond, the broad-based U.S. dollar strength, supported by upbeat U.S. economic data, could also be considered as the key factor that kept the currency pair under pressure. At this particular time, the GBP/USD currency pair is currently trading at 1.2704 and consolidating in the range between 1.2682 – 1.2748.

While discussing the positive side of the story, the renewed optimism over the coronavirus (COVID-19) aid package helping the market trading sentiment on the day. The U.S. Congress passed the stop-gap funding to avoid a government shutdown in October, which raised the hopes of breaking stimulus deadlock. Besides this, the reason for the upbeat market mood could be associated with the latest upbeat U.S. economic data. 

At the data front, the U.S. data showed that existing home sales rose to 6 million in August, the highest level in nearly 14 years. Moreover, the market risk sentiment was further bolstered by the Fed Chair Jerome Powell’s measured comments. He said on Tuesday that it might be possible for the Fed to raise interest rates before inflation starts to average 2%.

As in result, the broad-based U.S. dollar succeeded to maintain its positive traction and remain bullish on the day amid upbeat U.S. data and pullback in technology shares. However, the U.S. dollar gains seem rather unaffected by the upbeat market tone and held its gaining streak, at least for now. Thus, the gains in the U.S. dollar could be considered as the major factor that kept the currency pair under pressure. 

Across the ocean, the reports that suggest the worsening condition in the U.K. also keeps the currency pair under pressure. As per the latest report, the COVID-19 related deaths climbed the most since July 14, with Tuesday’s death losses being 37. As in result, the UK PM Johnson warned, “if Reprodtuon of coronavirus rate does not go below 1, there could be more restrictions.” This, in turn, undermined the sentiment around the GBP and dragged the currency pair below 1.2700. 

During the day, the U.K. Foreign Minister Dominic Raab gave warning that the new coronavirus restrictions announced by the Prime Minister (PM) Boris Johnson should be taken seriously and proportionate. These remarks fuelled further worries and kept the traders cautious. 

Additionally, weighing on the quote could be the statement of the BOE Governor Bailey, which raised concerns over the economic instability even before the activity restrictions, which increased courtesy to the watch today’s preliminary readings of September month PMI numbers.

At the Brexit front, the discussions need a push on fisheries and less noise over the Internal Market Bill (IMB) to break the deadlock in talks. However, the U.K. parliament recently agreed to have a say over whether the IMB will break the Brexit Withdrawal Agreement Bill or not, if yes it must not harm Northern Ireland. 

The market traders will keep their eyes on the preliminary readings of September month PMIs from the U.K., Europe, and the U.S. for fresh direction. Meanwhile, the USD price dynamics and coronavirus headlines will be key to watch. 

 Daily Technical Levels

Support Resistance

1.2737      1.2930

1.2659      1.3045

1.2544      1.3123

Pivot point: 1.2852

GBP/USD– Trading Tip

The GBP/USD traded sharply bearish at 1.2678 support level, having violated the upward channel on the hourly chart. The already violated triple bottom level of 1.2780 is likely to keep the GBP/USD pair under pressure, below this pair can drop towards 1.2678 and 1.2603 level. On the higher side, the Sterling may drive upward movement until the 1.2780 level. The 50 periods EMA is likely to extend selling until 1.2670 level. The MACD is also moving into the selling zone therefore let’s consider taking a sell trade below 1,2750 level today. 

 


USD/JPY – Daily Analysis

The USD/JPY pair managed to keep its early-day winning streak and picked up further bids around well above 105.00 level mainly due to the broad-based U.S. dollar fresh strength, backed by the upbeat U.S. economic data, which eventually heightened the hopes about the U.S. economic recovery. The market risk-on sentiment, supported by the Fed Chair Jerome Powell’s measured comments and upbeat U.S. data, undermined the safe-haven Japanese yen and contributed to the currency pair gains. 

In the meantime, the risk-on market sentiment was further bolstered by the optimism over the coronavirus (COVID-19) aid package. Which also helps the currency pair to put the bids. On the contrary, the rising cases of coronavirus (COVID-19) keep challenging the market risk-on sentiment, which could be considered as the key factor that kept the lid on any additional gains in the currency pair. At this moment, the USD/JPY currency pair is currently trading at 105.10 and consolidating in the range between 104.90 – 105.19.

Despite intensifying concerns over the escalation in the Sino-American tussle and the rising cases of coronavirus (COVID-19), the investors continued to cheer the upbeat data from the U.S. At the data front, the U.S. data showed that existing home sales rose to 6 million in August, the highest level in nearly 14 years. Moreover, the market risk sentiment was further bolstered by the Fed Chair Jerome Powell’s measured comments. He said on Tuesday that it might be possible for the Fed to raise interest rates before inflation starts to average 2%. This, in turn, underpinned the safe-haven U.S. dollar and contributed to the currency pair. 

Besides this, the market trading sentiment was also cheered the latest optimism concerning the coronavirus (COVID-19) aid package. It is worth reporting that the U.S. Congress recently showed readiness to the bipartisan stop-gap funding bill to avert the government shutdown by the end of the current month, which helps to recede differences between the ruling Republicans and the opposition Democratic party. However, the hopes of stimulus could be considered as one of the key factors that have been supporting the market sentiment.

Despite the risk-on market sentiment, the broad-based U.S. dollar succeeded to gain positive traction and took strong bids on the day amid upbeat U.S. data and pullback in technology shares. However, the U.S. dollar gains seem rather unaffected by the upbeat market tone and held its gaining streak, at least for now. Thus, the modest gains in the U.S. dollar could be considered as the major factor that kept the currency pair higher. 

On the contrary, the long-lasting tussle between the world’s two largest economies remained on the cards as portrayed by U.S. Secretary of State Mike Pompeo’s latest comments, which could be considered as the key factor that capped further upside momentum int he currency pair.

The preliminary readings of September month PMIs from the U.K., Europe, and the U.S. for fresh direction. Meanwhile, the USD price dynamics and coronavirus headlines will be key to watch. 

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

Despite sharp movement in the other currency pairs, the USD/JPY continues to follow the same technical setup. On the 4 hour chart, the downward channel is anticipated to drive selling sentiment in the USD/JPY pair as it provides resistance at the 105.250 level. On the downside, the support lingers at 104.460 level, and a bearish breakout can lead USD/JPY price further lower towards 103.700 level. The focus will remain on the U.S. manufacturing and services PMI figures to drive the further direction of the pair.  

Good luck! 

 

Categories
Forex Basic Strategies

An Exclusive Strategy To Trade The Fiber (EUR/USD) Currency Pair

Introduction 

In the previous article, we discussed a trading strategy that was a combination of EMA and RSI. Presuming that all the readers easily understood it, we will now discuss a trading strategy that is a combination of three technical indicators. Today’s article will acquit us with another useful and reliable trading system that is based on the combination of Simple Moving Average, Stochastic Oscillator, and Relative Strength Index (RSI).

Time Frame

This strategy is only applicable on the 1-hour time frame. This is because all the indicators tend to sync in this time frame. Therefore, the strategy may not be suitable for day traders.

Indicators

The strategy consists of three indicators – a 150-period Simple Moving Average (SMA), Relative Strength Index (RSI) with period 3, and a Full Stochastic Oscillator with standard settings. The overbought and oversold levels for the indicators stand at 70-80 and 30-20, respectively.

Currency Pairs

As the name suggests, this strategy is exclusively meant for ‘EUR/USD.’ The liquidity and volatility of EUR/USD are extremely supportive of this strategy.

Strategy Concept

We first identify the direction of the market using the 150-period SMA and then establish a channel in the same direction. This is the first condition that has to be met before we can initiate a ‘trade.’ One could also this is a ‘channel’ based strategy as it involves going ‘long’ at the bottom of the channel and ‘short’ at the top once the indicators generate signals.

For a ‘long’ entry, we need to see if the Relative Strength Index drops in the oversold area. Once it drops, we look for a bullish crossover of the Stochastic lines, while they are also within their oversold zone. In simple words, we need a channel in a bull trend with both the indicators indicating that the market is oversold and with the Stochastic displaying a bull reversal.

Conversely, a ‘short’ trade is generated when the price starts moving in a downward channel in a bearish trend. The RSI and Stochastic should be in the overbought area that will later display a bearish reversal. As soon as the Stochastic fast and slow lines make a bearish crossover, we enter for a ‘sell’ on the next price bar. All of the above price action must happen below the 150-period SMA.

The strategy offers a high degree of capital protection as we place our stop-loss at the most recent ‘swing low’ or ‘swing high.’ As far as the ‘take-profit’ is concerned, we can use a fixed profit target, or we could scale out as the market approaches our target and protecting it with a trailing stop. An exit signal is also generated by the Stochastic indicator, which we will be discussing in the upcoming section of the article.

Trade Setup                     

In order to explain the strategy, we have considered the 1-hour chart of EUR/USD, where we will be applying the rules of the strategy to execute a ‘long’ trade.

Step 1: First of all, open the 1-hour chart of EUR/USD and establish the trend of the market. Plot Simple Moving Average (SMA) with a period of 150, Stochastic and Relative Strength Index with their default settings on the chart. If the price is above the 150-period SMA, we say that the market is in an uptrend. Whereas if the price is below the 150-period SMA, we say that it is in a downtrend. Next, draw a channel within the trend. It is better to have an upward channel in an uptrend and a downward channel in a downtrend.

Step 2: This is the crucial step of the strategy, where we align the three indicators together to generate a signal. After the identification of the trend and channel, we need to wait for the price to come at the extreme of the channel. In an upward channel, the price should be at the bottom of the channel, while in a downward channel, the price should be at the top.

Once the price reaches these extremes, we should watch the Stochastic and RSI. We enter ‘long’ when we notice a bullish crossover in Stochastic and an oversold circumstance of RSI (below 40). This means that the price might be putting up a ‘low’ that will result in a reversal. Similarly, we will go ‘short’ in the currency pair when we notice a bearish crossover in Stochastic along with an overbought condition of RSI (above 60).

The below image shows an example where the above step is being accomplished.

Step 3: In this step, we shall determine the Stop-Loss and Take-Profit for the trade where both these levels are derived mechanically. We place the stop-loss just below the ‘swing low’ from where the reversal took place. It will be above the recent ‘swing high’ in a ‘short’ trade. When speaking of the take-profit level, there is no fixed point for it. We take our profits when Stochastic reaches the opposite overbought/oversold level. At this point, we can either exit the trade, scale-out, or use a trailing stop. This can help in increasing the risk-to-reward (RR).

In our case, the risk-to-reward (RR) ratio of the trade was 1.5, which is above average.

Strategy Roundup

The RSI+Stochastic+SMA strategy is a reliable trend trading system that accurately pinpoints the bottom of a channel in a trend. More importantly, the strategy can provide the best-with-trend entry points that are necessary to increase the probability of winning. Since we are applying this strategy on a higher time frame, it will limit the effects of whipsaws that are encountered more often these days.

Categories
Forex Market Analysis

Daily F.X. Analysis, September 21 – Top Trade Setups In Forex – Fed Chair Powell in Focus! 

The market’s fundamental side is likely to offer us a Fed Chair Powell Speech later during the New York session. Federal Reserve Chair Jerome Powell is due to speak, along with the rest of the FOMC board members, about rule-making for the Community Reinvestment Act, via satellite. It may drive volatility in the market today.

Economic Events to Watch Today  

 

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18404 after placing a high of 1.18703 and a low of 1.18258. Overall the movement of the EUR/USD pair remained bearish throughout the day. The Euro U.S. Dollar exchange rate dropped on Friday amid the declining U.S. stock and risk sentiment. The Dow Jones Industrial Average dropped by 0.2%, and the Nasdaq Futures also fell from its record high. The risk sentiment was affected by the rising number of coronavirus cases in Europe.

 According to Johns Hopkins University, the number of coronaviruses confirmed cases across the globe have raised to 30 Million, and it raised fears of the second wave of coronavirus. Since the outbreak started in China late last year, the death toll has risen more than 940,000.

After the United States, India, and Brazil, Europe has reached the most confirmed cases as it has seen a renewed spike in the infections. The World Health Organization has also issued a warning that Europe could see many deaths from coronavirus over November and October. This has weighed heavily on the Euro currency, and the EUR/USD pair has been under pressure since then.

The rising number of coronavirus cases in Europe, some European countries imposed new lockdown measures to slow down the virus spread, and it raised fears for a quick economic recovery that also kept the EUR/USD prices on the downside on Friday.

Meanwhile, at 11:00 GMT, the German PPI in August remained flat with a projection of 0.0% on the data front. At 13:00 GMT, the Current Account Balance from Eurozone also showed a surplus of 16.6B against the projection of 12.0B and supported Euro.

On the U.S. front, the Current Account Balance from the U.S. dropped by -171B against the forecasted -158B and weighed on the U.S. dollar. The C.B. Leading Index also declined to 1.2% from the forecasted 1.3%, and the Prelim UoM Consumer Sentiment rose to 78.9 against the forecasted 75.0. The Prelim UoM Inflation Expectations came in at 2.7%. 

Apart from that, the U.S. dollar’s safe-haven status gained traction on Friday after the tensions between the United States and China raised amid the tech war. The U.S. government attempted to ban the Chinese WeChat app’s download in the United States, which was, however, failed due to rejection from the Judge. China may react to such action with anger, and this fear raised safe-haven appeal, and the U.S. dollar advanced that added pressure on EUR/USD prices on Friday.

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 trades bullish at 1.1868 level, holding right below an immediate resistance level of 1.1870 that’s extended by a triple top pattern. On the hourly timeframe, a bullish crossover of 1.1870 level may lead EUR/USD prices towards the next target level of 1.1882 level. Conversely, selling bias remains strong below 1.1870 until the 1.1840 level today.

GBP/USD – Daily Analysis

Today in the Asian trading hours, the GBP/USD currency pair extended its previous bullish trend and took some further bids around above the mid-1.2950 level. However, the currency pair’s bullish trend could be associated with the weaker sentiment surrounding the broad-based U.S. dollar ahead of the U.S. Federal Reserve official’s speech. Adding to the U.S. dollar’s problem is its latest tussle with Iran and an on-going tension with Beijing. 

This, in turn, boosted the sentiment around the currency pair. Moreover, the currency pair gains could also be associated with the latest reports that the U.K. Finance Minister Rishi Sunak is again stepping forward to help businesses. On the contrary, the growing worries over a nationwide lockdown in the wake of rising coronavirus cases became the key factor that kept the lid on any additional currency pair gains. Apart from this, the on-going Brexit pessimism also keeps challenging the currency pair bullish bias. Moving on, the currency pair traders seem cautious to place any strong position ahead of the Fed policymakers’ comments during the American session,

The fears of rising COVID-19 cases in the UK, Spain, and some of the notable Asian nations like India continually fueling worries that the economic recovery could be halt, which eventually weighed on the market trading sentiment. Apart from this, the on-going political impasse over the shape and size of the next U.S. fiscal recovery package also played its role in declining equity markets. Elsewhere, the renewed conflict between the U.S. and China and the US-Iran tussle and Trump’s latest warnings to the firms helping Iran build arms also exerted downside pressure on the market risk-tone and underpinned the safe-haven Japanese yen.

Despite the risk-off market sentiment, the broad-based U.S. dollar failed to gain any positive traction and edged lower on the day ahead of the U.S. Federal Reserve official’s speech, which is scheduled to happen later in the week. Besides, the decision over the inclusion of Chinese government bonds in the FTSE Russell World Government Bond Index (RWGBI) also keeps the USD bulls on the defensive. However, the losses in the U.S. dollar kept the GBP/USD currency pair higher. 

At home, the upcoming speech of British Chief Medical Officer Chris Whitty suggests that the coronavirus return is not only halting the economic recovery but also pushes the country towards another lockdown and a “very challenging winter.” On the other hand, London Mayor Sadiq Khan also said that they’re “catching up” with Covid-19 hotspots in northern England. 

Additionally, capping the gains could be the fresh warning by the U.K. Transport Minister Grant Shapps about the rising odds of a nationwide lockdown, as the country’s coronavirus situation is at a critical point. At the Brexit front, the long-lasting Brexit pessimism is still looming over the GBP traders. Having initially showed a willingness to hear the Internal Market Bill (IMB), mainly due to the UK PM Boris Johnson’s offer to ease fisheries, the European Union (E.U.) is repeating the warning if London moves ahead to overcome the Brexit Withdrawal Agreement Bill (WAB). These renewed fears also weighed on the GBP currency.

Looking forward, the Chicago Fed National Activity Index, which is expected 1.95 against 1.18 prior, will be key to watch on the day. Apart from this, the traders will also keep their eyes on the speech from the U.K.’s health authorities, at 10:00 AM GMT will be the key to watch. Whereas, the continuous drama surrounding the US-China relations and updates about the U.S. stimulus package will also be closely followed. 

 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

On Monday, the GBP/USD is trading at 1.2941 mark, staying within an upward channel that’s supporting the pair at 1.2909 level. The closing of the recent Doji candle above the EMA and upward trendline support level of 1.2909 level signals chances of upward direction in the market. Thus, traders should consider looking for a buying trade with a target of 1.2996 level. Violation of 1.2909 level can trigger selling bias until 1.2828 level. 

 

USD/JPY – Daily Analysis

The USD/JPY currency pair extended its early-day losing streak and hit the intra-day low around the 104.28 regions in the last hours. However, the reason for the currency pair bearish bias could be attributed to the risk-off market sentiment, which tends to underpin the safe-haven Japanese yen and contributed to the currency pair decline. Hence, the market trading sentiment was being pressured by the coronavirus (COVID-19) and downbeat catalysts from America. 

Apart from this, the absence of any major data/events from the rest of the Asia-Pacific nations also kept the currency pair’s performance confined. On the other hand, the broad-based U.S. dollar weakness ahead of the U.S. Federal Reserve officials scheduled to speak could also be considered a key factor that dragged the currency pair lower. 

Elsewhere, the market risk tone has been sluggish since the day started, possibly due to the worsening coronavirus (COVID-19) conditions in the U.K. and Europe. Meanwhile, the renewed conflict between the U.S. and China and the US-Iran tussle and Trump’s latest warnings to the firms helping Iran build arms also exerted downside pressure on the market risk-tone and underpinned the safe-haven Japanese yen. As per the World Health Organization’s (WHO) regional director Hans Kluge, Europe reported 300,000 new infections, the most significant weekly rise ever, including the first spike in spring. Furthermore, France, Poland, the Netherlands, and Spain are facing the second wave. The U.K. is already considering a new lockdown, while countries from Denmark to Greece announced new restrictions on Friday. These headlines add an extra burden on the market risk tone.

Across the ocean, the positive remarks from Chinese President Xi Jinping and hopes of further stimulus for the Asian major under the presidency of Yoshihide Suga might help the market trading sentiment to limit its deeper losses. At the USD front, the broad-based U.S. dollar failed to gain any positive traction and edged lower on the day ahead of the U.S. Federal Reserve official’s speech, scheduled to happen later in the week. Besides, the decision over the inclusion of Chinese government bonds in the FTSE Russell World Government Bond Index (RWGBI) also keeps the USD bulls on the defensive. However, the losses in the U.S. dollar kept the USD/JPY currency pair lower. Whereas, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies fell by 0.16% to 92.870 by 9:55 PM ET (2:55 AM GMT).

Looking forward, the Chicago Fed National Activity Index, which is expected 1.95 against 1.18 prior, will be key to watch on the day. Apart from this, the continuous drama surrounding the US-China relations and updates about the U.S. stimulus package will also be closely followed. In the meantime, the USD moves and coronavirus headlines will not lose their importance as they could play a key role in the currency pair movements.

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 disrupted the double bottom support mark of 104.650, and presently it’s holding beneath 50 periods EMA, implying chances of selling bias in the USD/JPY. On the 4 hour chart, the downward channel is anticipated to drive selling sentiment in the USD/JPY pair. On the downside, the support lingers at 104.100 level, and a bearish breakout can lead USD/JPY price further lower towards 103.700 level. The eyes will remain on the Fed Chair Powell’s speech as it may drive further market trends. The MACD and EMA are also in support of selling bias. 

Good luck! 

 

 

Categories
Forex Signals

EUR/USD on a Bullish Run Amid Stronger ZEW Economic Sentiment

The EUR/USD managed to gains positive traction and edged higher around the 1.1900 level mainly due to the broad-based US dollar. Thus, the broad-based US dollar weakness could be associated with the market risk-on mood, which was supported by the renewed optimism over a possible vaccine for the highly infectious coronavirus disease. Apart from this, the doubts over the US fiscal stimulus measures and upbeat China data also weighed on the broad-based US dollar, which keeps the EUR/USD currency pair higher closer to 1.1900 marks. 

Across the pond, the firm note from the ECB at last week’s meeting boosted the positive tone around the shared currency, which also pushed the current par higher near the 1.1900 neighborhood, or new 3-day highs. Meanwhile, the positive stance in the speculative community also underpinned the constructive outlook in the shared currency and contributed to the currency pair gains. On the contrary, the rise in coronavirus infections across Europe becomes the key factor that kept the pressure on further gains in the pair. At the moment, the EUR/USD is trading at 1.1886 and consolidating in the range between the 1.1860 – 1.1900. Moving on, the currency pair traders seem cautious to place any strong position ahead of the German Zew survey and Eurozone Labor Cost data.

The shared currency Euro could face some selling pressures if Labor Costs’ growth slows more than expected, reviving disinflation fear. However, the Eurozone’s inflation turned negative in August, the official data on Sept. 1 showed. It worth recalling that the market focus would be on the Eurozone and German Zew Survey numbers, Eurozone Labor Cost (Q2), which is scheduled to release at 09:00 GMT. 

Across the ocean, the market trading sentiment remained well supported by the positive progress on a potential vaccine for the highly contagious coronavirus disease. These hopes were triggered after the Chinese CDC chief biosafety expert confirmed that the Ordinary Chinese could take the COVID19 vaccine as early as November or December as the phase III clinical trial went very smoothly. Meanwhile, the Pfizer’s Pharmaceutical company also joins the on-going optimism while saying that we will likely provide the pandemic’s cure during this year to the US. 

Apart from this, the upbeat Chinese macro numbers also exerted a positive impact on market trading sentiment. At the data front, China’s August Retail Sales YoY, the number came in at 0.5% versus. 0% exp and -1.1% last, with Industrial Output YoY at +5.6% and +5.1% exp and +4.8% last. In the meantime, the Fixed Asset Investment YoY unchanged at -0.3% vs. -0.4% expected and -1.6% last. At the same time, China’s January-August Private Sector Fixed Asst Investment dropped by 2.8% YoY.  

The greenback failed to extend positive traction and remained bearish on the day. Moreover, the losses in the US dollar could also be attributed to the doubts over the US fiscal stimulus measures. The probabilities for a large stimulus have fallen approximately to zero after Democratic voted to block a Republican bill that would have provided around $300 billion in new coronavirus aid. However, the losses in the US dollar kept the EUR/USD currency pair higher. Whereas, the US dollar index dropped to 93.029, slipping further from a one-month high of 93.664 touched last Wednesday, with its low last week of 92.695 seen as immediate support.


Moving on, the traders will keep their eyes on the Eurozone and German Zew Survey numbers, Eurozone Labor Cost (Q2), scheduled for release at 09:00 GMT. The data will influence the shared currency. Meanwhile, the updates surrounding the Brexit, virus, and US-China tussle could not lose its importance. 

The EURUSD pair has violated the double top resistance level of 1.1885 level, and now it’s trading at 1.1895 level. For now, the EUR/USD may find support at 1.1885 level, and above this, a continuation of a bullish trend may lead EUR/USD price until the 1.1916 level. Bearish correction can be seen until 1.1885 and 1.1870 before the continuation of further buying trends in the EUR/USD.

Entry Price – Buy 1.18896

Stop Loss – 1.18496

Take Profit – 1.19296

Risk to Reward – 1:1

Profit & Loss Per Standard Lot = -$400/ +$400

Profit & Loss Per Micro Lot = -$40/ +$40

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368

Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

Categories
Forex Market Analysis

Daily F.X. Analysis, September 15 – Top Trade Setups In Forex – Series of Events in Focus! 

On the news front, the eyes will remain on the U.K. labour market report along with EU ZEW Economic Sentiment and German ZEW Economic Sentiment that are forecasted to report negative figures. Later during the U.S. session, the U.S. Capacity Utilization Rate and Industrial Production m/m are expected to support greenback amid positive forecast.

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD closed at 1.18633 after placing a high of 1.18877 and a low of 1.18316. The EUR/USD pair moved in an upward direction on Monday and extended its bullish streak for the 4th consecutive day on the back of a weak U.S. dollar and improved the global equity market along with the positive Eurozone economic data.

The S&P 500 futures were up by 1.2%, and Dow Jones Futures was up by 0.9% whereas the NASDAQ rose by 1.6%. The EUR/USD pair moved higher as the equities were marginally higher in Asia and Europe on the back of positive news from the vaccine side. The vaccine developed by Oxford and AstraZeneca has resumed its phase-3 trials, and this improved the market risk sentiment on the renewed hopes of potential vaccine development.

The same vaccine trials were stopped in the previous week after a participant was reported with an unexplained illness. However, the trials have been started this week again, and the hopes for economic recovery have returned with it that gave a push to EUR/USD prices on the upside.

Other than that, July’s Industrial Production from Eurozone showed an improvement to 4.1% against the forecasted 4.0% and supported the single currency Euro. The strong Euro then added further gains in the EUR/USD pair.

Moreover, the U.S. dollar weakness also played an important role in pushing the pair EUR/USD further on the upside. The U.S. dollar was weak on the board ahead of the upcoming Fed’s September monetary policy meeting this week. The two-day meeting of the FOMC (Federal Reserve Open Market Committee) will start on Tuesday and will be concluded by the comments from Jerome Powell on Wednesday.

The market participants are waiting for the comments from the Chairman of the U.S. Federal Reserve on Wednesday, and this has increased the selling pressure against the U.S. dollar. The weak U.S. dollar pushed the EUR. The USD pair is higher on Monday.

The U.S. dollar was under more pressure after the House of Representatives returned from summer break, and the hopes for reaching a consensus on the fifth round of stimulus measure increased. These hopes exerted further pressure on the U.S. dollar and added strength to the EUR/USD pair’s upward movement.

However, the gains in EUR/USD pair were capped after the WHO reported a record rise in the daily cases of coronavirus from across the globe. The organization said that 307,930 cases were recorded in a single day. This raised uncertainty around the market related to economic recovery and helped cap further losses in EUR/USD pair on Monday.

Daily Technical Levels

Support Pivot Resistance
1.1835 1.1862 1.1894
1.1803 1.1921
1.1776 1.1954

EUR/USD– Trading Tip

The EURUSD pair has violated the double top resistance level of 1.1885 level, and now it’s trading at 1.1895 level. For now, the EUR/USD may find support at 1.1885 level, and above this, a continuation of a bullish trend may lead EUR/USD price until 1.1916 level. Bearish correction can be seen until 1.1885 and 1.1870 before continuation of further buying trend in the EUR/USD.

GBP/USD – Daily Analysis

The GBP/USD closed at 1.28450 after placing a high of 1.2919 and a low of 1.27705. The pair GBP/USD rose in the first trading session on Monday, and after that, it converted its direction in the late trading session and lost some of its daily gains. The rise in prices of the GBP/USD pair on Monday was due to a weak U.S. dollar and improved risk sentiment. 

However, the Pound eased from session highs on Monday as Prime Minister Boris Johnson continued to make a case for a controversial bill that threatens to break the terms of the post-Brexit deal with the European Union the following vote later today.

The U.S. dollar came under fresh selling pressure on Monday after the equities rose in Asian and European session due to positive news from the vaccine front. The AstraZeneca and Oxford vaccine resumed its vaccine’s phase-3 trials after they were paused due to an unexplained illness found in one of the shareholders last week. 

The resumed trials of the long-awaited vaccine raised hopes for economic recovery and risk sentiment and helped the risk perceived British Pound to gain traction and move the GBP/USD pair on the upside.

However, the GBP/USD pair came under pressure ahead of the parliament vote on the internal market bill when Boris Johnson suggested that the legislation was needed to avoid a situation in which the E.U. counterparts seriously believe that they had the power to break up the U.K.

The expectations are high that the bill will pass the first parliamentary process despite the several party members of the Tory government have refused to back the bill. Furthermore, the upward movement of the Pound was short lives ahead of the Bank of England’s meeting later this week. Market participants have suggested that the central bank would welcome further easing in November and would renew its cautious outlook on the economy.

The hopes for further easing also weighed on GBP/USD pair and capped further gains in the currency pair at the starting day of the week in the absence of any macroeconomic data from both sides.

 Daily Technical Levels

Support Pivot Resistance
1.2774 1.2847 1.2919
1.2702 1.2992
1.2629 1.3063

GBP/USD– Trading Tip

The GBP/USD traded sharply lower at 1.2843 level, and now it’s forming a Doji candle, which may trigger buying in the GBP/USD pair. On the higher side, the Sterline may soar to target 1.2928 level, and even above this, the next target for Sterling can be 1.3033 level. The MACD and EMA are still supporting a selling bias; therefore, we should be looking to take selling entry below 1.2928 level today. 

USD/JPY – Daily Analysis

The USD/JPY currency pair failed to halt its Asian session bearish moves and witnessed some further selling moves near 105.90 level mainly due to the broad-based U.S. dollar weakness, triggered by the doubts over the next round of the U.S. fiscal stimulus measures. Moreover, the upbeat market sentiment, backed by the recently positive coronavirus (COVID-19) vaccine news, also weighed on the safe-haven U.S. dollar, which ultimately dragged the currency pair below 106.00 level. However, the risk-on market sentiment also undermined the safe-haven Japanese yen and became the critical factor that helped the USD/JPY currency pair to limits its deeper losses. 

On the contrary, the fears of a no-deal Brexit and the Sino-American tussle keep challenging the market risk-on tone, which might suffer the currency pair into deeper losses. 

The ongoing impasse over the next round of the U.S. fiscal stimulus or the upbeat market sentiment, not to forget the record single-day increase in COVID-19 cases, these all factors tend to undermine the broad-based U.S. dollar. The U.S. Senate rejected a Republican bill that would have provided around $300 billion in new coronavirus aid. Democrats voted to block the law as they have been pushing for more funding to control the economic downturn that led the coronavirus pandemic.

Despite the lingering doubts over the U.S. economic recovery and the intensifying tension between the world’s two biggest economies, the market players continue to cheer the optimism about the coronavirus treatment. These hopes fueled after the AstraZeneca’s showed readiness to restart the third phase of coronavirus (COVID-19) vaccine trials. 

This, in turn, the broad-based U.S. dollar edged lower on the day as the lack of progress over the U.S. aid package continuously destroying hopes for a quick economic recovery. Meanwhile, the weaker tone surrounding the U.S. Treasury bond yields further weakened the already weaker sentiment surrounding the dollar. At the US-China front, the rising tensions between the United States and China as China’s Commerce Ministry said that it launched an anti-subsidy investigation on certain glycol ethers imports from the U.S., starting September 14.

Besides this, China announced that Beijing had sent a note detailing reciprocal restrictions on the U.S. Embassy and consulates on Friday. These moves came after the U.S. sanctions on Chinese individuals, which fuels worries about worsening US-China relations. These fears keep challenging the market risk-on tone and might suffer the currency pair into deeper losses.

Daily Technical Levels

Support Pivot Resistance
105.4500 105.8300 106.1200
105.1600 106.5000
104.7800 106.7800

USD/JPY – Trading Tips

The USD/JPY currency pair has dropped sharply amid increased safe-haven appeal and weakness in the U.S. dollar. The pair fell from 106 to 105.650 level and now it’s facing resistance at 105.795 level. On the lower side, the USD/JPY pair may drop until 105.265. Let’s consider opening a sell trade below 105.750 to target 105.450 and 105.250 level as the MACD and RSI also signalling selling bias. Good luck! 

 

Categories
Forex Market Analysis

Daily F.X. Analysis, September 11 – Top Trade Setups In Forex – U.S. Inflation Figures in Highlights

On the fundamental side, the eyes will remain on the U.S. Inflation and core inflation figures expected to underperform compared to previous figures. In this case, the U.S. dollar may trade with a bearish bias today.

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18143 after placing a high of 1.19173 and a low of 1.17981. The EUR/USD pair rose on Thursday to its highest for 6 days on the back of optimistic comments from the European Central Bank. The currency pair recovered much of its recent losses following the ECB’s policy decision and the weakened US dollar by US job stats.

On the data front, the French Industrial Production was released at 11:45 GMT, and was declined to 3.8% from the forecasted 5.1% and weighed on Euro. At 13:00 GMT, the Italian Industrial Production advanced to 7.4% from the expected 3.6% and supported a single currency that took the EUR/USD pair higher.

The European Central Bank President Christine Lagarde took a modestly upbeat view on Europe’s recovery from a historic recession on Thursday and played down the concerns about Euro’s strength. She also disappointed the hopes for the more stimulus from the European government.

Lagarde signaled higher underlying inflation and slightly upgraded the bank’s 2020 growth forecast on the back of strong rebound inactivity. In response to the latest 8% rise of the Euro against the US dollar, the President of ECB took a benign view on the currency and simply said that the bank would monitor carefully exchange rate movements.

Analysts were highly awaiting this response but these simple comments disappointed them as these were the weakest possible expression of concern. She said that exchange rates will carefully monitor and the matter was being discussed in the governing council. Investors had expectations of tougher language but the simple comments that were keen to avoid a currency war actually firmed the Euro. The ECB’s rate-setting Governing Council said that they judged that the currency was broadly in line with economic fundamentals and they feared any hint of a currency war with the United States.

In response to deflation concerns, the ECB President Lagarde said that deflation pressures had eased since June and that the weak inflation levels could be attributed to low energy prices. And for the high value of the Euro, she said that there was no need for the markets to overreact to the currency gains.

With the strong Euro amid hawkish comments from ECB, the EUR/USD pair rose above 1.191 level on Thursday.

Meanwhile, the US dollar was also weak onboard that added further strength in the pair’s gains. At 17:30 GMT, the Unemployment Claims from the previous week rose to 884K against the expected 838K and weighed on the US dollar. The rise in unemployment benefit claims raised concerns for economic recovery and weighed on local currency and gave support to the EUR/USD pair.

However, the gains in the EUR/USD pair failed to hold position and dropped in the late trading session and lost most of its gains on the back of rising concerns over the coronavirus cases. Western Europe surpassed the US in new daily COVID-19 infections and was re-emerging as a global hot spot after bringing the pandemic under control in the summer. 

The rising coronavirus cases in European countries exerted negative pressure on the local currency due to economic recovery concerns and the pair reversed its direction.

Daily Technical Levels

Support Pivot Resistance
1.1770 1.1844 1.1888
1.1726 1.1962
1.1653 1.2006

EUR/USD– Trading Tip

The EUR/USD continues to trade at 1.1835 level as the ECB decided to leave it’s interest rate unchanged in its monetary policy meeting. On the higher side, the pair may find resistance at 1.1839 level, and above this, the pair may find the next resistance at 1.1860 level along with support at 1.1828 level. Below 1.1828, the EUR/USD may find the next support at 1.1797 and 1.1755 level.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.28051 after placing a high of 1.30350 and a low of 1.27724. Overall the movement of the GBP/USD pair remained bearish throughout the day. The GBP/USD pair moved on a track for its biggest weekly fall in nearly six months on Thursday as the European Union threatened to pursue legal action against the U.K. if it proceeds with the bill that aims to undermine the Brexit-withdrawal agreement.

The GBP/USD pair fell by 1.56% on Thursday to its lowest since July 27. The E.U. demanded the British government drop its internal market bill by the end of the month or risk jeopardizing negotiations and legal action.

The U.K. government published the internal bill on Wednesday that seeks to create common rules that apply across the U.K., including England, Northern Ireland, Scotland, and Wales. 

The bill would likely clash with the terms agreed on Withdrawal agreement requiring that Northern Ireland follow E.U. rules in the post-Brexit period to avoid a hard border with the Republican of Ireland. However, The Cabinet minister Michael Gove insisted the U.K. will not withdraw the bill. Prime Minister Boris Johnson has already said that the U.K. will leave the E.U. without a deal if Europe and the U.K. failed to reach an agreement by October 15. If no-deal is secured by then, the U.K. will follow the World Trade Organization’s trade rules. 

The hopes of any progress in upcoming Brexit-deal talks faded after the E.U.’s latest threat, and the hopes for a “hard Brexit” have increased. This weighed heavily on GBP/USD pair on Thursday, and the pair fell to its multi month’s low level.

On the data front, at 04:01 GMT, the RICS House Price Balance rose to 44% against the forecasted 23% and supported GBP/USD pair. At 06:30 GMT, the C.B. Leading Index dropped to -0.3% in July from the previous 0.0%. From the U.S. side, the Core PPI in August rose to 0.4% from the forecasted 0.2% and supported the U.S. dollar that added further pressure on GBP/USD pair. The Producer Price Index in August rose to 0.3% against the projected 0.2% and supported the U.S. dollar that added in the losses of the GBP/USD pair on Thursday. At 19:00 GMT, the Final Wholesale Inventories in July came in as -0.3% against the projected -0.1% and supported the U.S. dollar that took the GBP/USD prices further towards the downside.

 Daily Technical Levels

Support Pivot Resistance
1.2706 1.2871 1.2969
1.2608 1.3134
1.2443 1.3232

GBP/USD– Trading Tip

The GBP/USD traded sharply lower at 1.2843 level, and now it’s forming a Doji candle, which may trigger buying in the GBP/USD pair. On the higher side, the Sterline may soar to target 1.2928 level, and even above this, the next target for Sterling can be 1.3033 level. The MACD and EMA are still supporting a selling bias; therefore, we should be looking to take selling entry below 1.2928 level today. 

USD/JPY – Daily Analysis

The USD/JPY currency pair stopped its early-day bearish rally and drew some modest bids around above 106.20 level, mainly due to the risk-on market. However, the positive tone around the equity market was supported by the news of receding tension between India and China, and Tokyo’s optimism over easing lockdown restriction also favor the market trading sentiment, which eventually undermined the Japanese yen currency and contributed to the currency pair gains. 

The broad-based U.S. dollar weakness, in the wake of low safe-haven demand, becomes the major factor that kept the presure on any further gains in the currency pair. Meanwhile, the on-going US-China tussle over several issues, the risk of a no-deal Brexit, and delay in the U.S. stimulus keep challenging the market trading sentiment, which might cap further gains in the currency pair. The USD/JPY is trading at 106.19 and consolidating in the range between 106.08 – 106.20.

The market trading sentiment was bolstered by optimism over a possible vaccine and treatment for the highly infectious coronavirus. After the Goldman Sachs, these hopes fueled that Pfizer’s candidate said that Pfizer’s candidate vaccine could be approved as early as October. In the meantime, the news of receding tensions between India and China and the optimism over the easing coronavirus (COVID-19)-led lockdown restrictions also boosted the market trading sentiment. This in, turn, undermined the safe-ave Japanese yen and extended support to the currency pair. 

The reason for the upbeat sentiment could also be associated with record recovery in the BSI Large Manufacturing Conditions Index for the third quarter (Q3). The record recovery in the BSI Large Manufacturing Conditions Index for the third quarter (Q3), from -44.2 expected and -52.3 before +0.1, citing that the Japanese economy is up for a strong recovery. 

Across the ocean, the market trading sentiment rather unaffected by the intensified US-China tussle and Brexit issue. The Trump administration continues to keep TikTok on the sellers’ radar. In the meantime, the cancellation of over 1,000 visas of Chinese residents also irritates China. 

Also capping the gains could be the headlines suggesting that the Tokyo metropolitan government lowered its coronavirus alert by one level to 3 on Friday. This might underpin the local currency and dragged the currency pair down. The Japanese yen currency might also take clues from the Producer Price Index (PPI) data for August that recovered to -0.5% from -0.9% YoY.

The traders will keep their focus on the U.S. Consumer Price Index (CPI) for August, which is expected 1.2% against 1.0% YoY. Moreover, the updates surrounding the Sino-US tussle, as well as Brexit related headline, could not lose their importance.


Daily Technical Levels

Support Pivot Resistance
105.9700 106.1400 106.3000
105.8200 106.4600
105.6500 106.6200

USD/JPY – Trading Tips

The USD/JPY is consolidating at 106.050, with a resistance mark of 106.480 level. An upward crossover of 106.480 level may extend further buying trend until the 106.840level, and the violation of this level can extend buying until the next resistance level of 107.150. On the downside, the safe-haven USD/JPY currency may gain support at 105.620 and 105.280. Let’s consider taking a sell trade below 106.024 level as the MACD and RSI also suggest selling bias. Good luck! 

 

Categories
Forex Market Analysis

Daily F.X. Analysis, September 10 – Top Trade Setups In Forex – ECB Monetary Policy In Focus

It will be a big day for the European pairs as the European Central Bank is due to report it’s minimum bid rate along with the Press Conference to determine the monetary policy. Besides, the U.S. Unemployment Claims and PPI data will be the main market mover of the market.

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18027 after placing a high of 1.18339 and a low of 1.17525. Overall the movement of the EUR/USD pair remained bullish throughout the day. The market sentiment was sour on Wednesday amid the pause in the AstraZeneca & Oxford University vaccine’s final clinical trials. The trials were paused due to an unexplained illness in one participant. This weighed on risk sentiment and kept the EUR/USD pair under pressure on Wednesday.

The much-awaited decision of the European Central Bank monetary policy will announce on Thursday, and the market participants have started to bets on it. Meanwhile, the U.S. dollar surging due to increased pressure on its rivals dropped on Wednesday and caused a surge in EUR/USD pair.

The ECB is concerned about the appreciation in Euro and increased deflationary pressure and the uncertainty around Europe’s coronavirus situation. The bank is set to announce no changes in its upcoming monetary policy for the second month in September. The bank expanded it’s Pandemic Emergency Purchase Program with EUR 600 billion in June.

The interest rates on main refinancing operations are at 0.00%, on the marginal lending facility are at 0.25%, and the deposit facility is at -0.50%. All are expected to remain unchanged in this monetary policy meeting. The PEPP will also remain unchanged at EUR 1350 Billion. The speech from the ECB President Cristine Lagarde will remain under focus by traders to find fresh clues about the EUR/USD pair.

For August, the Eurozone inflation came in negative when the annualized consumer price index fell by 0.2% versus the July’s rise by 0.4% and raised concerns about the local economy. The impact of coronavirus has been rising as the coronavirus is surging in the Eurozone. To combat coronavirus’s economic impact, ECB expanded its balance sheet from 4500 B euros to 6424B euros. The long-term Eurozone inflation is also gloomy and shows a downward trend.

Traders await that the euro appreciation will remain under the focus of Lagarde’s speech, and measures that she will announce to cope with it will provide massive movements in EUR/USD prices on Thursday. The Eurozone economy outlook from the European Central Bank will also give clues on the EUR/USD pair.

On the U.S. side, the Consumer Credit in July dropped to 12.2B from the forecasted 12.9B and weighed on the U.S. dollar that helped EUR/USD move upward. EUR/USD pair posted gains after falling for three consecutive days on Wednesday.

Daily Technical Levels

Support Pivot Resistance
1.1795 1.1820 1.1857
1.1758 1.1882
1.1733 1.1919

EUR/USD– Trading Tip

The EUR/USD has recovered a bit to trade at 1.1820 level ahead of the ECB Monetary policy decision due to coming out during the late European session. ECB isn’t expected to change its rate; however, the press conference will be the EUR/USD pair’s main mover. On the higher side, the pair may find resistance at 1.1860 level along with support at 1.1797 level. Below 1.1797, the pair may drop towards 1.1755 level. Conversely, a bullish breakout of 1.1825 level can lead EUR/USD prices towards 1.1866.


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29986 after placing a high of 1.30231 and a low of 1.28847. Overall the movement of the GBP/USD pair remained bullish throughout the day. After falling for two consecutive days and posting massive losses, the GBP/USD pair dropped on Wednesday in an earlier trading session near the lowest level since July 28. However, in the late trading session, the pair successfully recovered its daily gains and reversed its direction and started posting gains.

The pair followed its previous day bearish trend in the early trading session on Wednesday that the new Internal Market Bill news from the U.K. Parliament pushed. The new bill was issued to protect the United Kingdom’s jobs after the transition period ends next December. 

The bill raised fears that it might impact the relationship between the U.K. and the E.U. It could re-write the parts of the Brexit withdrawal agreement related to the Northern Ireland protocol. In response to the new bill news, the E.U. Commission President Ursula von der Leyen said that breaching the singed withdrawal agreement would break the international law and undermine trust. This weighed on the local currency GBP and dragged the pair towards the lowest level since July 28.

However, the pair’s downward movement was further supported by the latest news that weighed on risk sentiment that AstraZeneca & Oxford University vaccine’s final clinical trials were paused after an unexplained illness was found in a participant.

Whereas, on the U.S. front, the U.S. dollar came under pressure on Wednesday after rising for the past few days on the back of weak rival currencies performance. The weakness in the U.S. dollar was ahead of the ECB meeting on Thursday. The U.S. Dollar Index fell by 0.1% on Wednesday to 93.16 and weighed on the U.S. dollar that supported the GBP/USD pair’s movement.

On the data front, the Consumer Credit for July dropped to 12.2B against the forecasted 12.9B and weighed on the U.S. dollar that added further support to the GBP/USD pair. On Wednesday, PM Boris Johnson said that they must act to avoid another lockdown as virus cases were rising in England. He was referring to the new rule that restricts the gathering of more than six people. The new rule can issue fines or make arrests in case of breach of law.

 Daily Technical Levels

Support Pivot Resistance
1.3079 1.3125 1.3196
1.3008 1.3242
1.2962 1.3313

GBP/USD– Trading Tip

The GBP/USD pair has formed a Doji pattern over 1.2901 area, and the support level is extended by an upward trendline on four hourly timeframes. On the higher side, the pair may face immediate resistance at 1.3021, and above this, the Cable may head towards 61.8% Fibo level of 1.3154 level. Jobless claims data may play the role today.


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 106.174 after placing a high of 106.272 and a low of 105.785. Overall the movement of the USD/JPY pair remained bullish throughout the day. After falling on Tuesday, the USD/JPY pair gained traction on Wednesday and started rising. The pair fell to 6 days lowest level on Wednesday in the early trading session but reversed its direction and moved upward on the back of the upbeat market sentiment.

The market mood improved on Wednesday and made it difficult for the safe-haven Japanese Yen to find demand and pushed the pair USD/JPY higher. After falling for three consecutive days, the equity market was raised on Wednesday with the S&P 500 index up by 1.85% and confirmed the risk-on market sentiment. The U.S. Treasury bond yields for a 10-year note also rose to 2.2% and supported the upward market sentiment.

Moreover, the U.S. Dollar Index also rose on Wednesday to 93.66 level the highest since August 12 and supported the upward U.S. dollar movement. 

However, the USD/JPY par gains were capped by multiple factors, including the US-China tussles and negative vaccine news.

On Wednesday, the long-awaited vaccine developed by AstraZeneca and Oxford University stopped its final stage clinical trials due to an unexplained illness found in one of the participants. This news raised concerns over vaccines’ development and, ultimately, on the economic recovery and capped further gains in the USD/JPY pair.

Meanwhile, the rising tensions between the U.S. & China after the latest comments from President Donald Trump and his administration regarding the tech fight and bringing back the production to America raised fears for the phase-one deal completion. These tensions and the lingering fight on the South China Sea have weighed on market sentiment that undermined the risk sentiment and supported the Japanese Yen, ultimately capping further gains in the USD/JPY pair.

Moreover, the new Brexit worries after the U.K. introduced new potential internal law that could change the initial withdrawal agreement terms related to the Northern Ireland border, also weighed on risk sentiment. The uncertainty regarding a Brexit deal between the E.U. & U.K. also weighed on market sentiment and limited the USD/JPY pair’s gains.

On the data front, the M2 Money Stock for the year in Japan rose to 8.6% in August from 8.2% and supported the Japanese Yen that capped further gains in the USD/JPY pair. At 10:59 GMT, the Prelim Machine Tool Orders decreased by -23.3% in August compared to July’s -31.1%. On the U.S. front, the JOLTS Job Openings in July rose to 6.62M against the forecasted 6.05M and supported the U.S. dollar that added further support to the USD/JPY pair on Wednesday.


Daily Technical Levels

Support Pivot Resistance
105.9500 106.2700 106.6800
105.5500 106.9900
105.2300 107.4000

USD/JPY – Trading Tips

On Thursday, the USD/JPY is consolidating at 106.050, with a resistance mark of 106.480 level. An upward crossover of 106.480 level may extend further buying trend until the 106.840level, and the violation of this level can extend buying until the next resistance level of 107.150. On the downside, the safe-haven USD/JPY currency may gain support at 105.620 and 105.280. Let’s consider taking a sell trade below 106.024 level as the MACD and RSI also suggest selling bias. Good luck! 

 

Categories
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.

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! 

Categories
Forex Market Analysis

Daily F.X. Analysis, September 04 – Top Trade Setups In Forex – Brace for U.S. NFP Figures! 

On the news front, the eyes will be on the U.S. ADP Non-farm payroll figures, which may drive price action during the New York session today. Besides, the U.S. Crude Oil Inventories will remain in highlights as economists expect a slight draw in U.S. oil stocks that may drive buying in WTI crude oil.

Economic Events to Watch Today  

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18513 after placing a high of 1.18644 and a low of 1.17888. Overall the movement of the EUR/USD pair remained flat yet bullish throughout the day. After dropping for two consecutive days, the EUR/USD pair extended its losses in the first half of the day but reversed its direction and started posting gains in the late trading hours.

After reaching a 2-years peak level, the EUR/USD pair saw subsequent profit-taking that weighed on its prices and dragged it down. However, on Thursday, the pair’s extra downside pressure was due to the strong U.S. dollar amid better than expected economic data.

The Unemployment Claims from the United States last week dropped to 881K from its previous forecast of 955K and supported the U.S. dollar. The less unemployment claim benefits mean more people rejoined their jobs during the last week in the U.S. and raised hopes for a quick economic recovery.

Moreover, from the European side, at 12:15 GMT, the Spanish Services PMI in August dropped to 47.7 from the forecasted 48.0 and weighed on the shared currency Euro. At 12:45 GMT, the Italian Services PMI for August also dropped to 47.1 from the expected 49.4 and weighed on Euro. AT 12:50 GMT, the French Final Services PMI dropped to 51.5 from the projected 51.9 and weighed on Euro.

However, at 12:55 GMT, the German Final Services PMI rose to 52.5 from the expected 50.8and supported Euro. At 13:00 GMT, the Final Services PMI for the whole bloc in August also rose to 50.5 and showed an expansion against the expectations of 50.1 and supported the Euro that added further in the EUR/USD pair’s gains. At 14:0 GMT, the Retail Sales data from Eurozone dropped to -1.3% in July against the anticipated 1.3% and weighed heavily on Euro.

Most data from Europe on Thursday came in against the local currency and took the pair EUR/USD to its five days lowest level on Thursday. However, in the late trading session, the pair managed to reverse its track and started posting gains. On the other hand, on Thursday, a survey showed that the Eurozone’s rebound from its deepest economic downturn was weakened in August as some countries in the E.U. suffered more than others from the restrictions imposed to curb the spread of the virus.

On Thursday, France’s government detailed its 100 billion euro stimulus plan to erase the coronavirus crises’ economic impact over two years. The billions of euros were lined up in public investments, subsidies, and tax cuts. This added pressure on the single currency Euro and the pair dropped in the first session.

Meanwhile, the countries that rely heavily on tourism like Italy, Spain, and Greece saw a large contraction in the services PMI on Thursday as travel restrictions were put in place to stop the coronavirus spread.

Apart from that, the EUR/USD pair was also under pressure on Thursday because of the latest comments from the Chief ECB Economist, Philip Lane, who said that authorities have started to become uncomfortable with the single currency’s recent appreciation. This not only triggered the profit-taking but also hopes for a new stimulus measure from the European Union to ease the rally of EUR currency. However, the pair EUR/USD managed to find support at the ending hours of Thursday’s trading session as the selling pressure was eased ahead of the NFP data from the U.S.

Daily Technical Levels

Support Pivot Resistance
1.1802 1.1834 1.1879
1.1757 1.1911
1.1726 1.1956

EUR/USD– Trading Tip

As expected, 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. NFP will determine further price action in the pair. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.32804 after placing a high of 1.33584 and a low of 1.32424. Overall the movement of the GBP/USD pair remained bearish throughout the day. The British Pound fell for a second straight day on Thursday and threatened to reverse the 3-week winning streak on the Bank of England’s rising expectations of negative interest rates.

Recently, the Governor of Bank of England, Andrew Bailey, has said that the central bank could adopt the worst-case scenario’s negative interest rate policy. The scenario pointed towards the second wave of coronavirus and failure to reach a post-Brexit trade deal with the E.U.

According to Andrew Bailey, the use of negative interest rates would be strong in the worst-case scenario instead of using bond buying or quantitative easing, which are considered the central bank’s preferred tools.

He added that the fears of the second wave of coronavirus affected the recovery pace as the key parts of economy operations were under their normal level. He said that he was worried about the weak economic activity in London.

Bailey also highlighted that there was still a huge amount of uncertainty around the effects that the crisis would have on the economy long term. These concerning comments from bailey weighed on a single currency Pound and kept the GBP/USD pair under pressure on Thursday.

Moreover, the U.S. dollar also played an important role in keeping the currency pair GBP/USD on the downside on Thursday after the release of U.S. Unemployment Claims data.

At 17:30 GMT, the Jobless Claims from last week dropped to 881K from the forecasted 955K and supported the U.S. dollar. At 19:00 GMT, the highly awaited ISM non-Manufacturing PMI remained flat with the expectations of 47.0. The strong U.S. dollar then weighed on GBP/USD pair and extended its previous day losses.

Whereas, from the Great Britain side, at 13:30 GMT, the Final Services PMI for August dropped to 58.8 against the anticipated 60.1 and weighed on single currency Sterling. The already weak Sterling weighed on GBP/USD pair, and the pair posted losses on the day.

On the Brexit front, the E.U. chief negotiator Michel Barnier launched another attack on U.K.’s post-Brexit stance and said that the British government sought to have its cake and eat it. He accused the U.K. of failing to engage constructively in talks on the future relationship. He stressed the need to approve an agreement by the end of October to have time for ratification. Barnier claimed that despite the U.K.’s desire for independence from the E.U., in practice, the U.K. was seeking the status quo but without obligations. Barnier’s comments raised concerns over the Brexit deal and weighed on GBP that dragged the currency pair GBP/USD on the downside.

 Daily Technical Levels

Support Pivot Resistance
1.3228 1.3293 1.3344
1.3177 1.3409
1.3112 1.3460

 GBP/USD– Trading Tip

On Friday, the GBP/USD pair is trading bearish at 1.3308 level, set to test the support level of 1.3168 level. The Cable has already violated an upward trendline at 1.3375 level, which is already violated. On the lower side, the GBP/USD may drop further below 1.3358 until the 1.3263 level. The MACD is also supporting selling bias; therefore, we will be looking for selling trades below the 1.3355 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 dropped sharply on Thursday, 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
105.9300 106.2500 106.5000
105.6800 106.8200
105.3700 107.0700

USD/JPY – Trading Tips

On Friday, the USD/JPY currency pair is trading at 106.077with an immediate resistance level of 106.085 level. Bullish crossover of 106.085 level may drive further buying until the next resistance level of 106.570. On the lower side, the USD/JPY pair may find support at 105.800 and 105.500 levels. Let’s consider buying over 106.100 level as the MACD and RSI also suggest the same. Later today, the eyes will remain on the U.S. NFP figures. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, September 03 – Top Trade Setups In Forex – A Day Before NFP! 

On the news front, the eyes will be on the U.S. ADP Non-farm payroll figures, which may drive price action during the New York session today. Besides, the U.S. Crude Oil Inventories will remain in highlights as economists expect a slight draw in U.S. oil stocks that may drive buying in WTI crude oil.

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD closed at 1.18542 after placing a high of 1.19286 and a low of 1.18219. On Wednesday, Euro fell sharply against the U.S. dollar as the European Central Bank’s growing expectations will roll out additional stimulus after dismal Eurozone PMI data on Tuesday.

The Eurozone data on the previous day suggested that it had slipped into deflation as the prices of main goods were dropping for the first time in four years. As a result, markets were expecting another round of stimulus package from Europe’s central bank, which raised the European stocks higher.

The central bank’s expectations would unleash a new monetary stimulus, raised the global equities, and added pressure on EUR/USD pair. Expansion in more financial asset purchases is expected from ECB to stimulate the pandemic-stricken economy.

As the European Central Bank meeting is coming next week, some members have raised concerns that the Euro currency was rising sharply, and there was a need for more stimulus package in the economy. According to the ECB’s Chief Economist, Philip Lane, the euro currency levels do matter for monetary policy as a stronger currency generally weighs on export growth and curbs import prices that will lead to a slowdown in inflation.

These growing hopes for a fresh round of stimulus measures from ECB came in just after days the Federal Reserve announced its policy shift to tolerate a rise in inflation from its initial target of 2%. Investors interpreted the Fed’s latest decision as the interest rates will remain lower for longer.

These interpretations were also backed by the New York Federal Reserve President John Williams, who said that even talk of raising interest rates was so far off in the future. The hopes for another round of Europe’s stimulus weighed on the Euro currency and hence paired EUR/USD dropped.

On the data front, at 11:00 GMT, the German Retail Sales in July was dropped to -0.9% from the forecasted 0.5% and weighed on single currency Euro. At 12:00 GMT, the Spanish Unemployment Change in August rose to 29.8K from the expected 10.1K and weighed on the shared currency Euro and dragged EUR/USD pair further on the downside.

At 14:00 GMT, the Producer Price Index from Eurozone for July rose to 0.6% from the forecasted 0.5% and supported the Euro currency. Most of the data came in against shared currency, and hence EUR/USD pair suffered losses on Wednesday.

Meanwhile, from the U.S. side, the ADP Non-Farm Employment Change came in as 428K against the expected 1250K and weighed on the U.S. dollar but failed to reverse the EUR/USD pair’s bearish movement. However, the Factory Orders from the U.S. rose to 6.4% from the projected 6.0% and supported the U.S. dollar that added further in the EUR/USD pair’s losses on Wednesday.

Daily Technical Levels

Support Pivot Resistance
1.1805 1.1868 1.1914
1.1759 1.1977
1.1696 1.2024

EUR/USD– Trading Tip

As expected, the EUR/USD continues to extend it’s selling bias to 1.1812 level after violating the support level of 1.1890 level. On the lower side, the EUR/USD may find support at 1.1780 level. Above this, we can expect the EUR/USD to take a bullish correction. But for now, we can see the selling trend in the EUR/USD pair. Today, EUR/USD may find resistance 1.1825. Bearish bias dominates.


GBP/USD – Daily Analysis

GBP/USD pair was closed at 1.33504 after placing a high of 1.34022 and a low of 1.32831. Overall the movement of the GBP/USD pair remained bearish throughout the day. After posting gains for three consecutive days and reaching its highest since December 2019, GBP/USD pair dropped on Wednesday and posted losses on the day. The fall in GBP/USD pair was triggered by the dovish commentary by the Bank of England on Wednesday.

Another reason behind the decreased GBP/USD pair prices was the increased safe-haven demand for the greenback that made the U.S. dollar strong and weighed on the currency pair. On Wednesday, the Governor of Bank of England, Andrew Bailey, said that the E.U.’s strategy to force Britain to follow E.U. rules in the future could be seen by European Union’s refusal to grant cross-border access to investment banking services from London.

European Union has said that as the Britain access to the bloc will end on December 31, the services of investment banks from London to E.U. member states will be blocked. E.U. said that it wanted to review the rules first, and then it will decide how much direct access it will grant all types of U.K. financial activity under its system.

British rules will be compared to the 27-nation bloc’s rules, and then the decision of whether to grant access will take place accordingly.

He also warned that the U.K. economy was facing a record level of uncertainty about its future and a significant risk that growth will be far weaker than recently forecasted. He added that the forecasts made in August were done in the face of huge uncertainty due to the continuous fight against COVID-19, structural economic changes, and stalled Brexit trade talks.

These comments weighed on a single currency British Pound and added in the losses of GBP/USD pair on the day. Meanwhile, the U.S. Dollar rose on Wednesday as the concerns around the U.S. elections and the ongoing US-China tensions have restored the appetite for the safe-haven greenback. 

Despite a sharp decline in the ADP Non-Farm Employment Change in August, the U.S. dollar continued to post gains and weighed on GBP/USD pair. In July from the U.S., the Factory orders were increased to 6.4% from the forecasted 6.0% and supported the U.S. dollar that added further pressure on GBP/USD pair.

From the Great Britain side, at 04:01 GMT, the BRC Shop Price Index for the year dropped to -1.6% in September from the previous -1.3%. At 10:57 GMT, the Nationwide Housing Price Index in August rose to 2.0% from the expected 0.5% and supported the Sterling. At 13:30 GMT, the House Price Index from the U.K. for the year increased to 2.9% from the projected 2.8%.

Furthermore, the BoE Deputy Governor, Ben Broadbent, said on Wednesday that fears that BoE was bailing out the U.K. government by financing its coronavirus surge in public spending were misplaced and the central bank has not lost its credibility.

Just like Broadbent, several BoE officials have sought to explain that the central bank’s decision to ramp up its government bond-buying since the COVID-19 crisis was not to restore monetary financing of the government’s spending push. Moreover, the British Pound also fell on Wednesday as the uncertainty over a post-Brexit trade deal between the U.K. & E.U. continued to weigh on the Sterling. With a lack of progress in trade deal talks, investors were concerned about the British economy’s future, and hence the pair GBP/USD dropped.

 Daily Technical Levels

Support Pivot Resistance
105.9000 106.1100 106.3700
105.6400 106.5800
105.4300 106.8400

 GBP/USD– Trading Tip

The GBP/USD pair is trading bearish at 1.3308 level, set to test the support level of 1.3168 level. The Cable has already violated an upward trendline at 1.3375 level, which is already violated. On the lower side, the GBP/USD pair may drop further below 1.3358 until the 1.3263 level. The MACD is also supporting selling bias; therefore, we will be looking for selling trades below the 1.3355 level. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.955 after placing a high of 106.150 and a low of 105.589. The USD/JPY pair moved sideways on Tuesday but ended its day with posting gains as the selling pressure against the U.S. dollar was faded away after the release of ISM Manufacturing data and some fresh comments from Fed Governor. 

However, the fading risk sentiment kept the gains in the USD/JPY pair checked after the coronavirus cases started to rise globally. The worldwide toll of cases reached 25 million with the United States on top with 6 million cases on Wednesday. India reported its biggest single-day surge in coronavirus cases of 78,761 on the weekend, while Spain reported a daily toll of more than 8000. After the U.S., Brazil, and India, now Russia has also entered the country with more than 1 million coronavirus cases. Besides, the Scottish government announced restrictions on people traveling from Greece to Scotland due to developing coronavirus cases.

The increasing number of COVID-19 cases decreased the risk appetite and helped safe-haven Japanese Yen to gain traction that weighed on the USD/JPY pair and limit the additional gains in the USD/JPY pair on Tuesday. Moreover, the renewed US-China tensions after Beijing’s new law to impose restrictions on tech export. China forced a ban on the export of tech companies that will require government approval, which will take 30 days approx. 

The move came in against the order of Donald Trump in which he gave 90 days to the TikTok app for sale or transfer of its rights to the U.S. The tensions also supported the Japanese Yen and capped further upside in the USD/JPY pair on Tuesday.

Daily Technical Levels

Support Pivot Resistance
1.3288 1.3346 1.3409
1.3225 1.3467
1.3167 1.3530

USD/JPY – Trading Tips

The USD/JPY currency pair is trading at 106.077with an immediate resistance level of 106.085 level. Bullish crossover of 106.085 level may drive further buying until the next resistance level of 106.570. On the lower side, the USD/JPY pair may find support at 105.800 and 105.500 levels. Let’s consider buying over 106.100 level as the MACD and RSI also suggest the same. Good luck! 

Categories
Forex Signals

USD/CHF Enters Overbought Zone – Brace for Selling Signal! 

Today in the early European trading session, the USD/CHF currency pair successfully stopped its previous day bearish moves and hit the 1-1/2-week high level around the 0.9135 level in the last hour. However, the combination of factors helped the currency pair to gain positive traction for the 2nd-consecutive session on the day. The broad-based US dollar strength (supported by the US data’s upbeat release showed that the manufacturing sector activity boosted to a 2-year high in August) could be considered the key factor in supporting the currency pair. 

On the other hand, the prevalent risk-on market mood, backed by the multiple factors, undermined the safe-haven Swiss franc and contributed to the USD/CHF currency pair gains. On the contrary, the US aid package’s uncertainty keeps challenging the risk-on tone, which could drag the currency pair down by underpinning the safe-haven demand in the market. Currently, the USD/CHF currency pair is currently trading at 0.9103 and consolidating in the range between 0.9089 – 0.9137.

The upbeat data from key countries like the US, China, and Japan, have remained supportive of its positive tone. The US upbeat data rekindled hopes of the US economic recovery, which lead to a goodish pick up in the US Treasury bond yields. In turn, this underpinned the US dollar and remained supportive of the bid tone surrounding the USD/CHF currency pair.

At the data front, the August’s ISM Manufacturing Purchasing Managers Index (PMI) increased to 56, against July’s reading of 54.2 and the 54.5 forecasts. A surge in new orders recorded the index climb to its multi-year high. At China’s front, the Caixin manufacturing PMI for August increased to 53.1 from 52.8 in July. Likewise, Japan’s manufacturing PMI rose to 47.2 in August from 45.2.

The broad-based US dollar at the USD front managed to keep its gains throughout the Asian session as the traders still cheering the Upbeat US data. However, the US dollar gains seem rather unaffected by the upbeat market tone and held its gaining streak, at least for now. Thus, the US dollar’s modest gains could be considered the major factor that kept the currency pair higher. Whereas, the dollar index (=USD) rose by 0.16% at 92.390, having hit its lowest since April 2018 of 91.737. However, probabilities that the Fed would keep interest rates lower for longer periods could cap the further gains in the US dollar by holding the USD bulls from placing aggressive bets.

Apart from this, the upbeat market sentiment was being supported by the hopes of the coronavirus (COVID-19) vaccine. The pharmaceutical companies worldwide are going to start their final tests with one of the top candidates developed by AstraZeneca beginning its trials starting from today. This, in turn, boosted the market trading sentiment and extended support to the currency pair.

On the negative side, the on-going conflict between the world’s two largest economies still does not show any sign of slowing down as both nations do not refrain from delivering an aggressive statement. However, the latest US Secretary of State Mike Pompeo’s latest comments further heated the relation, which could be considered the key factor that capped further upside momentum in the currency pair.

The traders will also keep their eyes on the US ADP Employment Change for August, which is expected 950K against 167K prior. Across the pond, the major comments from BoJ’s Wakatabe will be key to watch.


The USD/CAD is trading at 0.9118, holding right below an immediate resistance at 0.9136 level. On the lower side, the USD/CAD may drop further to complete 38.2% Fibonacci retracement at 0.9080 and even further lower until 61.8% Fibonacci retracement at 0.9060 level. 

Entry Price – Sell 0.91063
Stop Loss – 0.91463
Take Profit – 0.90663
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368

Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

Categories
Forex Market Analysis

Daily F.X. Analysis, September 02 – Top Trade Setups In Forex – Eyes on ADP Non-Farm Employment! 

On the news front, the eyes will be on the U.S. ADP Non-farm payroll figures, which may drive price action during the New York session today. Besides, the U.S. Crude Oil Inventories will remain in highlights as economists expect a slight draw in U.S. oil stocks that may drive buying in WTI crude oil.

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.19117 after placing a high of 1.20113 and a low of 1.19010. On Tuesday, the EUR/USD pair rose above 1.2000 level in earlier trading session but failed to keep the level and dropped in the late session to post losses. The gains in the first half of the day were associated with the broad-based U.S. dollar weakness; however, in the late session, the losses were associated with the dollar strength triggered by better than expected ISM Manufacturing PMI.

The upward momentum that took the pair above 1.200 level on Tuesday was derived from the broad-based U.S. dollar weakness followed by the new policy shift from Federal Reserve. The improved risk sentiment due to vaccine hopes also helped the pair reach its highest since May 2018. However, the gains were limited as the pair started to fell in the second half of the day.

The losses in the EUR/USD pair were also encouraged by the fading market risk sentiment due to increased coronavirus cases worldwide. On Wednesday, the number of cases reached 6 million in the U.S., while India reported the biggest single-day jump of 78,761 in coronavirus cases over the weekend, whereas the daily case count reached 8000 in Spain. Meanwhile, after the U.S., Brazil, and India, now Russia also became the fourth country to exceed 1 million cases of COVID-19.

Furthermore, to prevent the second wave of coronavirus, the Scottish government announced new restrictions on travelers from Greece to Scotland; quarantine restrictions will be imposed on people traveling from Greece to Scotland due to emerging coronavirus cases. These tensions weighed on market risk sentiment and added in the further losses of EUR/USD on Tuesday.

Daily Technical Levels

Support Pivot Resistance
1.1870 1.1941 1.1981
1.1829 1.2053
1.1758 1.2093

EUR/USD– Trading Tip

The EUR/USD pair fell to trade at 1.1901 level, having immediate support at 1.1891 level, which is extended by double bottom level. Violation of 1.1891 level may extend selling until 1.1845 support. On the higher side, the resistance stays at 1.1935 and 1.1978 level for EUR/USD. Price action will highly depend upon the U.S. Advance NFP figures today.


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.33830 after placing a high of 1.34820 and a low of 1.33561. Overall the movement of GBP/USD remained flat yet bullish throughout the day. In the first half of the day, the pair rose and extended its gains to reach its highest since December 2019, near 1.3500 level on the back of selling bias surrounding the U.S. dollar. However, most of its early gains were lost in the second half of the day after the release of ISM Manufacturing PMI data on Tuesday.

In the early trading session, the equity markets moved in a higher direction after releasing China’s manufacturing PMI data from Caixin that showed an expansion in the industry by 53.1 against the estimated 52.6. It showed that the world’s second-largest economy was improving and raised the chances for quick economic recovery.

The improvement in China’s economy when the U.S. is suffering against the coronavirus pandemic increased the risk sentiment and weighed on the U.S. dollar that pushed the risk-sensitive currency pair GBP/USD higher on board. However, USD and risk appetite’s selling bias did not remain in the market for long and started to fade in the late session as the macroeconomic data from both the U.K. & U.S. came in against GBP/USD pair on Tuesday.

At 13:30 GMT, the Final Manufacturing PMI from the U.K. in August dropped to 55.2 from the forecasted 55.3 and weighed on GBP. The M4 Money Supply in July from Britain also dropped to 0.9% from the expected 1.2% and weighed on the Sterling. The Mortgage Approvals, however, rose to 66K against the estimated 55K and supported GBP. The Net Lending to Individuals remained flat with the expectations of 3.9B. Most data from Great Britain was against British Pound, and hence, the GBP/USD pair suffered and lost some of its gains on the day.

On the other hand, from the U.S. side, the highly awaited ISM Manufacturing PMI was released at 19:00 GMT, which exceeded the expectations of 54.6 and came in as 56.0 and supported the U.S. dollar. The strong U.S. dollar added weight on the GBP/USD pair that lost most of its daily gains but still ended its day with a slightly bullish trend.

Apart from macroeconomic data, the progress towards Brexit deal also drove the GBP/USD pair on Tuesday when PM Boris Johnson’s spokesman said that Britain wanted to agree simpler parts of the future relationship with the E.U. first to create momentum in the negotiations. While the E.U. has been insisting on reaching a consensus on difficult areas in talks such as E.U. state aid before any other negotiation area, even legal texts.

However, the next round of talks is scheduled for next week, but before that, another meeting was scheduled for Tuesday ahead of formal negotiation resumption next Monday. Michel Barnier went to London for informal talks with his U.K. counterpart, David Frost, as the transition period is near to end. It is yet to see how the informal talks went between both parties and discussed in the next round of formal meetings. Traders are cautiously waiting for some direction towards Brexit-deal.

 Daily Technical Levels

Support Pivot Resistance
105.6400 105.9000 106.2100
105.3300 106.4700
105.0700 106.7800

 GBP/USD– Trading Tip

The GBP/USD pair is trading bearish at 1.3358 level, set to test the support level of 1.3358 level. The Cable has already violated an upward trendline at 1.3375 level, which is already violated. On the lower side, the GBP/USD pair may drop further below 1.3358 until the 1.3263 level. The MACD is also supporting selling bias; therefore, we will be looking for selling trades below the 1.3355 level. Lets brace for ADP NFP figures for better price action. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.955 after placing a high of 106.150 and a low of 105.589. The USD/JPY pair moved sideways on Tuesday but ended its day with posting gains as the selling pressure against the U.S. dollar was faded away after the release of ISM Manufacturing data and some fresh comments from Fed Governor. 

However, the fading risk sentiment kept the gains in the USD/JPY pair checked after the coronavirus cases started to rise globally. The worldwide toll of cases reached 25 million with the United States on top with 6 million cases on Wednesday. India reported its biggest single-day surge in coronavirus cases of 78,761 on the weekend, while Spain reported a daily toll of more than 8000. After the U.S., Brazil, and India, now Russia has also entered the country with more than 1 million coronavirus cases. Besides, the Scottish government announced restrictions on people traveling from Greece to Scotland due to developing coronavirus cases.

The increasing number of COVID-19 cases decreased the risk appetite and helped safe-haven Japanese Yen to gain traction that weighed on the USD/JPY pair and limit the additional gains in the USD/JPY pair on Tuesday. Moreover, the renewed US-China tensions after Beijing’s new law to impose restrictions on tech export. China forced a ban on the export of tech companies that will require government approval, which will take 30 days approx. The move came in against the order of Donald Trump in which he gave 90 days to the TikTok app for sale or transfer of its rights to the U.S. The tensions also supported the Japanese Yen and capped further upside in the USD/JPY pair on Tuesday.

Daily Technical Levels

Support Pivot Resistance
1.3330 1.3407 1.3459
1.3279 1.3535
1.3202 1.3587

USD/JPY – Trading Tips

The USD/JPY currency pair is trading at 106.077with an immediate resistance level of 106.085 level. Bullish crossover of 106.085 level may drive further buying until the next resistance level of 106.570. On the lower side, the USD/JPY pair may find support at 105.800 and 105.500 levels. Let’s consider buying over 106.100 level as the MACD and RSI also suggest the same. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, September 01 – Top Trade Setups In Forex – Dollar Weakens Amid NFP Forecast! 

On the news front, the eyes will be on the series of economic events like Manufacturing PMI data from Europe, the U.K., and the U.S. Economy. Overall, almost all of the events are expected to report neutral results. Therefore, any surprisingly bad or good data may drive some price action in the market today.

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD closed at 1.19359 after placing a high of 1.19659 and a low of 1.18841. The EUR/USD pair continued its bullish trend for the second day and rose to its highest since August 18 on Monday amid broad-based U.S. dollar weakness. Every month, the currency pair EUR/USD rose for the 4th consecutive month in August. The improved risk sentiment followed the positive momentum in the EUR/USD pair in the market amid a rise in the U.S. stock futures.

 On Monday, the U.S. stock futures opened the day with modest gains as the market was on track to rack up their best August in more than 30 years. The upward momentum in stocks came after the S&P 500 and NASDAQ closed at an all-time high on Friday, with the former looking set to record its most robust August performance in 34 years.

The rally in the stock market was backed by the improved risk sentiment powered by massive monetary and fiscal stimulus in recent months that offset the concerns over the outlook of economic recovery from the coronavirus pandemic. Besides, the optimism around the vaccine development and treatments for COVID-19 and the robust demand for tech stocks also boosted the risk sentiment.

During the previous week, the Federal Reserve Chairman Jerome Powell shifted the policy to average inflation targeting that allowed inflation to surpass the 2% target. This shift raised concerns that interest rates were locked near-zero for as much as five years and weighed heavily on the U.S. dollar. The weak U.S. dollar helped EUR/USD to post gains on Monday.

Meanwhile, the German Prelim CPI in August dropped to -0.1% from the anticipated 0.0% and weighed on Euro on the data front. The Spanish Flash CPI fell in August to -0.5% from the July’s -0.6%. The Italian Prelim CPI in August came in line with the expectations of 0.3%. Most data from the European side came against Euro and limited the additional gains in EUR/USD pair on Monday.

While from the U.S. side, the Fed Vice Chair, Richard Clarida said on Monday that Federal Reserve would turn to discuss the next possible steps in the U.S. central bank’s fight against coronavirus induced economic fallout as a new policy framework has been set in place. The possible steps include linking interest rates directly with a return to full employment and possible expansion in monthly asset purchases to aid the economy through the COVID-19 crisis further.

Furthermore, the risk sentiment was also boosted by the news that the highly awaited Oxford vaccine will begin its phase-3 trials in the United States on Tuesday. This also helped EUR/USD pair to post gains on Monday.

Whereas, the World Health Organization pointed out encouraging signs that countries in Europe could deal with the coronavirus outbreak, despite the increase in cases since lockdown measures were lifted. According to a Senior Advisor to the Director-General at WHO, Bruce Aylward said that Europe has learned how to identify, isolate, and quarantine. It also helped raise the local currency Euro and added further in EUR/USD pair gains.

Daily Technical Levels

Support Pivot Resistance
1.1891 1.1929 1.1975
1.1846 1.2012
1.1808 1.2058

 EUR/USD– Trading Tip

The EUR/USD is trading sharply bullish amid the weaker dollar, leading EUR/USD pair towards 1.1993 level. The EUR/USD pair has violated the resistance level of 1.1960 level, which is now working as a support for Eur. On the upper side, the pair may find resistance at 1.2025 and 1.2065 levels today. The bullish bias remains dominant.


GBP/USD – Daily Analysis

The GBP/USD closed at 1.33651 after placing a high of 1.33956 and a low of 1.3309. Overall the movement of the GBP/USD pair remained bullish throughout the day. The GBP/USD pair extended its previous day’s bullish streak on Monday and posted gains for the third consecutive month on August amid broad-based U.S. dollar weakness and improved risk-on market sentiment.

The risk-sensitive British Pound gained on Monday due to many factors, including the dovish policy shift from the U.S. Federal Reserve, development in vaccine & treatments of COVID-19. At the same time, some lingering tensions in US-China kept the pair’s gains limited.

On Friday, the U.S. Federal Reserve shifted to a dovish policy that allowed inflation to pass over the 2% target, which means continued low-interest rates for almost five years. This weighed on the U.S. dollar and helped GBP/USD to post gains on Monday.

Meanwhile, the market sentiment was also powered by the positive headlines from the vaccine front as a possible virus vaccine made by Oxford has announced to start its phase-3 trials from Tuesday. Moreover, the US-listed Chinese tech companies were heading to Hong Kong exchange from New York Exchange amid increased US-China dispute. This weighed on market sentiment and kept a check on additional gains in GBP/USD pair.

Whereas, on the Brexit front, the U.K. Government has said that the European Union was making Brexit talks unnecessarily difficult after France accused the U.K. of deliberately stalling in negotiations.

In last week, U.K. and E.U. ended their latest round of negotiation with very little progress due to warnings of no-deal Brexit if issues did not settle within a few weeks. Only four months have left until the transition period ends, and both sides have failed to resolve their issues and are still stuck on various points, including fisheries and state aid policy.

Recently French Foreign Minister Jean-Yves Le Drian has blamed the U.K. for the deadlock and said that the failure in progress in talks was because of the United Kingdom’s intransigent and unrealistic attitude. Whereas, the U.K. has said that it has been clear from the outset about the U.K. approach’s principles. A spokeswoman said that the U.K. seeks a relationship that respects their sovereignty and has a free trade agreement the E.U. has with like-minded countries.

E.U. still insists not only that the U.K. must accept continuity with E.U. state aid and fisheries policy but also that the U.K. must agree before any further work can be done un any other area of negotiation. This also includes the legal texts that make in unnecessarily difficult to make progress. Next week, another round of talks will occur, and investors are looking forward to it for fresh clues.

 Daily Technical Levels

Support Pivot Resistance
1.3314 1.3355 1.3409
1.3260 1.3450
1.3219 1.3504

 GBP/USD– Trading Tip

The GBP/USD is trading with a neutral bias below an immediate resistance level of 1.3425 level. Closing of candles below 1.3420 level is likely to drive selling until the 38.2% Fibonacci support level of 1.3350 and 61.8% Fibonacci support level of 1.3305 level. The MACD has also crossed below 0, supporting selling bias in the GBP/USD pair. On the higher side, a bullish breakout of 1.3420 level can lead the Cable towards 1.3511 level. Let’s consider taking buying trades over 1.3350 level today.  


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.901 after placing a high of 106.094 and a low of 105.208. The USD/JPY pair moved in an upward direction on Monday despite the broad-based U.S. dollar weakness. The pair, which posted a loss of more than100 pips on Friday amid the resignation of Japanese Prime Minister Shinzo Abe, recovered about half of the previous losses on Monday.

The risk-on market sentiment made it difficult for the safe-haven Japanese Yen to find demand on Monday and helped pair USD/JPY moved higher on board. The heightened optimism for an effective coronavirus treatment and the U.S. Food & Drug Administration’s decision to fast-track vaccine approval added in the risk-sentiment. Besides, the news that the Oxford vaccine will also start its phase-3 trials on the next day also powered the risk sentiment and weighed on JPY that pushed the USD/JPY pair even higher at the start of the week. 

However, with the lingering tensions between the U.S. & China, the US-listed Chinese tech companies were preferring the Hong Kong Exchange with Alibaba affiliate Ant Group, one of the most highly predicted initial public offerings ready for a dual listing in Shanghai and Hong Kong. This kept the additional gains in USD/JPY limited on Monday.

The U.S. dollar was under heavy selling pressure on Monday amid U.S. Dollar Index slumped to more than two years, the lowest level at 91.99.

The pressure surrounding the greenback was increased in the absence of any significant fundamentals on Monday, and the market kept following the strategy of a policy shift from the Federal Reserve on Friday.

Meanwhile, on Monday, Vice Chairman Richard Clarida explained that as Federal Reserve has shifted from its previous policy and has set a new policy framework, the central bank’s focus will now shift towards the next promises made by it to fight against the coronavirus induced economic slump.

Fed made promises to link interest rates to the direct return of full employment and increase the monthly assets purchases to boost the economy through the economic crisis followed by the coronavirus pandemic.

On the other hand, at 04:50 GMT, the Prelim Industrial Production in July increased to 8.0% from the expected 5.0% and supported the Japanese Yen. The Retail Sales for the year from Japan dropped to -2.8% from the forecasted -1.7% and weighed on the Japanese Yen that pushed the pair USD/JPY even higher on board.

At 10:00 GMT, the Consumer Confidence from Japan in August increased to 29.3 against the expected 28.7 and supported the Japanese Yen. At 10:02 GMT, the Housing Starts came in as -11.4% against the anticipated -12.0% and supported the Japanese Yen but failed to reverse the USD/JPY pair’s bullish movement.

Daily Technical Levels

Support Pivot Resistance
105.4200 105.7600 106.2300
104.9500 106.5700
104.6200 107.0300

USD/JPY – Trading Tips

The USD/JPY is trading within a sideways range of 105.866 to 105.200 range. The pair entered into the oversold zone previously, but now it has completed 23.6% Fibonacci retracement, and above this, the next target is likely to be found around 105.870. The MACD has crossed over 0 and has entered into the buying zone. Bullish bias seems dominant in the market today. Therefore, we may see USD/JPY prices soaring towards 38.2% Fibo levels of 105.870. Buying can be seen at over 105.200 level today. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, August 31 – Top Trade Setups In Forex – Trading Choppy Sessions!   

On the news side, the eyes will be on European Spanish and German CPI data, which are expected to report a mixed figure. Later the Italian Prelim CPI is expected to report slightly positive data that may support EUR. Let’s take a look at the trade setups.

Economic Events to Watch Today  

 


 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.19054 after placing a high of 1.19196 and a low of 1.18108. Overall the movement of the EUR/USD pair remained bullish throughout the day. After moving sidelines and under pressure for two days, EUR/USD pair surged on Friday and posted gains on the back of broad-based U.S. dollar weakness from the dovish comments from the highly awaited Jerome Powell’s speech. However, the gains remain limited due to rising coronavirus cases and fears of the second wave in Europe.

The Government of Europe has re-imposed restrictions on citizens and renewed quarantine measures for some travelers. In response to these renewed restrictions, thousands of people took to the streets of Berlin against it. Police in Berlin arrested 300 demonstrators during the protests against Germany’s coronavirus restrictions.

On Friday, France made a larges jump since May 16 and reported 7462 new coronavirus cases. Germany reported around 1737 cases and three deaths. Italy reported 146 cases on Friday, the largest since April 1, and Spain announced 9779 cases on August 28. The resurgence of coronavirus in Europe came near when every European country was planning to start schooling from next week. Now, fears for a renewed spike in cases exacerbate as the schools’ time has come near. These lingering fears have kept the market sentiment under pressure and gains in EUR/USD limited on Friday.

Meanwhile, on the data front, at 11:00 GMT, the German GfK Consumer Climate in August declined to -1.8 from the projected 1.0 and weighed on single currency Euro. At 11:03 GMT, the German Import Prices for July rose to 0.3% from the expected 0.2% and supported Euro added in the currency pair’s gains.

At 11:45 GMT, the French Consumer Spending in July fell to 0.5% from the anticipated 1.2% and weighed on Euro. For August, the French Prelim CPI came in as -0.1% against the expected -0.2% and supported Euro and added in the gains of EUR/USD. The French Prelim GDP for the second quarter came in line with the expectations of -13.8%.

Daily Technical Levels

Support Pivot Resistance
1.1902 1.1904 1.1908
1.1898 1.1910
1.1895 1.1914

 EUR/USD– Trading Tip

The EUR/USD is trading slightly bullish at 1.1900 level, having an immediate resistance at 1.1918 level and support at 1.1896 level. On the higher side, a bullish breakout of the 1.1920 level can trigger buying until 1.1955 level. Conversely, a bearish breakout of 1.1896 level can drive selling until 1.1835 support. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.33505 after placing a high of 1.33564 and a low of 1.31861. Overall the movement of GBP/USD pair remained bullish throughout the day. After moving sideways on Thursday, GBP/USD pair posted strong gains on the back of supportive comments from Governor of Bank of England at Jackson Hole Symposium and broad-based U.S. dollar weakness.

On Friday, the GovernorBank of England Governor said that the central bank was not out of power to support the economy. This statement was followed by the dramatic shock caused by the coronavirus pandemic.

In a speech to Jackson Hole symposium, Andrew Bailey told that the bank has more ammunition left to support the economy. He also said that the major bond-buying drives had been proved more effective in the major economic crisis caused by the pandemic.

He informed that the central bank appreciated the need to keep enough headroom to deal with future shocks. He said that the bank still has a range of fiscal tools, including the negative interest rates, and there was no need to tighten monetary policy.

In March, the Governor took over the bank and almost immediately oversaw a 300 billion pounds bond-buying program and a cut in interest rate to a record low of 0.1%. After these comments from the Governor of Bank of England, the GBP/USD pair surged to the highest level since December 15, 2019.

The gains in GBP/USD pair were also supported by the weakness in the U.S. dollar that was derived from the dovish comments from the Chairman of Federal Reserve Jerome Powell on Thursday. According to Powell, the inflation will remain at 2% average for some time that increased hopes for a entended period of loose monetary policy by the central bank and weighed on local currency.

The U.S. dollar weakness helped GBP/USD pair to post extra gains, and hence, the pair reached the highest of more than eight months. There was no macroeconomic release from the U.K. side on the data front, but from the U.S. side, at 17:30 GMT, the Core PCE Price Index fell to 0.3% in July from the anticipated 0.5% and weighed on U.S. dollar. The Personal Spending rose to 1.9% in July from the projected 1.5% and supported the U.S. dollar. At 18:05 GMT, the Chicago PMI came in line with the anticipations of 51.0 in August. At 19:00 GMT, the Revised UoM Consumer Sentiment rose to 74.1 from the projected 72.8 and supported the U.S. dollar.

 Daily Technical Levels

Support Pivot Resistance
105.3400 105.5700 105.7800
105.1300 106.0100
104.8900 106.2300

 GBP/USD– Trading Tip

The AUD/USD pair is trading with a neutral bias below an immediate resistance level of 1.3365 level. Closing of candles below 1.3365 level is likely to drive selling until 38.2% Fibonacci support level of 1.3280 and 61.8% Fibonacci support level of 1.3250 level. The MACD has also crossed below 0, supporting selling bias in the GBP/USD pair. Let’s consider taking selling trades below 1.3365 level today.  

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.351 after placing a high of 106.945 and a low of 105.200. Overall the movement of the USD/JPY pair remained bearish throughout the day. The USD/JPY pair rose to near ten days the highest level on Friday near 107.00 level but failed to cross the resistance level and dropped on the back of broad-based U.S. dollar weakness and posted strong losses day. The pair posted the biggest daily decline on Friday and dropped to 105.2 level at the week’s ending day.

In the early trading session, the USD/JPY pair faced rejection near the 107.00 level and witnessed a dramatic turnaround on the latest news that Japan’s Prime Minister Shinzo Abe was stepping down due to ill health.

The 65-year-old Japan’s PM Shinzo Abe said that he did not want his illness to get in the decision-making way. He apologized to the Japanese people for failing to complete his term in office. He has had ulcerative colitis, inflammatory bowel disease, and he said that his condition had worsened recently.

Abe’s current period began in 2012, and last year he became Japan’s longest-serving prime minister. Until a successor is chosen, he will remain in his post and continue his duty. This political development gave strength to Japanese Yen that dragged the pair back closer to the 106 level on Friday.

Meanwhile, in later sessions, the pair was further dragged down due to the U.S. dollar’s broad-based weakness. The greenback was under pressure due to the dovish comments from the Fed Chair Jerome Powell at the Jackson Hole Symposium on the previous day.

On Thursday, Powell announced a significant policy shift and said that Fed was willing to run the inflation hotter than usual and support the labor market, also suggested keeping interest rates lower for longer. This also weighed on market sentiment and added further in the USD/JPY pair losses that dragged the pair towards 105.00 level.

On the data front, at 04:30 GMT, the Tokyo Core CPI for the year in August was declined to -0.3% from the anticipated 0.3% and weighed on Japanese Yen. From the U.S. side, at 17:30 GMT, the Core PCE Price Index was dropped to 0.3% from the anticipated 0.5% in July and weighed on the U.S. dollar and added in the losses of currency pair. The Personal Spending rose to 1.9% against the expected 1.5% in July and supported the U.S. dollar.

Daily Technical Levels

Support Pivot Resistance
1.3339 1.3349 1.3364
1.3325 1.3373
1.3315 1.3388

USD/JPY – Trading Tips

The USD/JPY is trading within a sideways range of 105.866 to 105.200 range. The pair entered into the oversold zone previously, but now it has completed 23.6% Fibonacci retracement, and above this, the next target is likely to be found around 105.870. The MACD has crossed over 0 and has entered into the buying zone. Bullish bias seems dominant in the market today. Therefore, we may see USD/JPY prices soaring towards 38.2% Fibo levels of 105.870. Buying can be seen at over 105.200 level today. Good luck! 

Categories
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.

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 27 – Top Trade Setups In Forex – U.S. Fed Chair Powell Speaks! 

On the fundamental side, the eyes will remain on the U.S. Prelim GDP, Unemployment rate, and Fed Chair Powell Speaks, which is due during the U.S. session. U.S. economy is once again expected to report a massive dip in the U.S. GDP data. At the same time, the Jobless Claims may improve a bit. Overall, the Fed Chair Powell Speaks will be the main highlight of the day as it may determine further sentiment about the U.S. dollar depending upon the dovish or hawkish tone of Powell.

Economic Events to Watch Today  

 


  

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18300 after placing a high of 1.18391 and a low of 1.17720. Overall the movement of the EUR/USD pair remained flat yet slightly bearish throughout the day. The Euro to U.S. Dollar exchange rate remained flat throughout the day and dropped in late Wednesday. The EUR/USD pair lost some of its previous daily gains earned on the back of stronger than expected German GDP data for the second quarter of this year.

The President at IFO Institute, Clemens Fuest, said that the German economy was on track to recovery as the German companies assessed their current business situation markedly more positively than last month. He said that the manufacturing sector’s business climate had improved considerably; however, many manufacturers still consider their current business to be poor.

Whereas, the resurgence of coronavirus pandemic in Europe increased the concerns for another wave of the Eurozone outbreak. Spain has recorded 80,000 new coronavirus cases over the last two weeks; the rate was by far the most in Western Europe. Germany reported 1576 new cases on Wednesday and increased the total count to 236,429.

The travel warning for countries outside Europe has been extended to September 14, as announced by the German Foreign Ministry on Wednesday. Meanwhile, Health Minister Jens Spahn has said that coronavirus testing’s capacity was limited in the country. In France, the Government warned that a second wave could hit the country as early as November. Furthermore, the E.U. trade commissioner Phil Hogan resigned after the Irish Government accused him of breaching COVID-19 guidelines. He attended a golf dinner with more than 80 people in a County Galway on August 19 and was criticized for not complying with quarantine rules while traveling.

Mr. Hogan denied breaking any law and said that he should have been more rigorous concerning the COVID-19 guidelines. These virus-related concerns kept weighing on the local currency Euro and kept the pair EUR/USD under pressure throughout the day.

On the U.S. front, the U.S. dollar was low on the day ahead of Fed Chair Jerome Powell’s speech scheduled for Thursday. The speech is expected to be dovish and provide fresh clues about the delayed U.S. next stimulus package and is weighing on the market sentiment.

However, the U.S. macroeconomic data remained supportive of the U.S. dollar as the Core Durable Goods Orders rose to 2.4% in July from the projected 1.9% and supported the U.S. dollar. The Durable Goods Orders also raised to 11.2% from the anticipated 4.4% and supported the U.S. dollar. The U.S. data added further pressure on EUR/USD pair, and the pair moved in a downward direction in the late American session after moving sideways throughout the day.

Daily Technical Levels

Support Pivot Resistance
1.1787 1.1814 1.1856
1.1744 1.1884
1.1717 1.1926

 EUR/USD– Trading Tip

The EUR/USD is trading sideways, holding below a double top resistance area of 1.1849 level. On the downside, the EUR/USD is likely to find support at 1.1804, while a bearish breakout of 1.1804 level can trigger selling until 1.1775 level. In case of a bullish breakout, the EUR/USD pair may trigger further buying trends until 1.1879 and 1.1945 levels.

GBP/USD – Daily Analysis

The GBP/USD currency pair managed to gain some positive traction and drew some modest bids near above 1.3200 level on the day mainly due to the broad-based U.S. dollar weakness, triggered by the cautious sentiment ahead of U.S. Federal Reserve (Fed) Chair Jerome Powell’s speech. Apart from this, the lack of progress over the much-awaited U.S. fiscal stimulus also weighed on the safe-haven U.S. dollar and contributed to the currency pair gains.

On the contrary, the downbeat report from the Confederation of British Industry (CBI) and negative remarks by the Organisation for Economic Co-operation and Development (OECD) also exerted some downside pressure o the currency pair. On the other hand, the cancelation of the negotiations over the U.K. and the European Union’s post-Brexit relationship also becomes the key factor that kept the lid on any additional gain in the currency pair. At this particular time, the GBP/USD currency pair is currently trading at 1.3207 and consolidating in the range between 1.3195 – 1.3223.

As per the CBI report, the companies reliant on spending by consumers – many of which only opened in recent weeks after the lockdown – cut jobs faster on record. However, these comments initially weighed on the currency pair. In the meantime, the OECD noted the British economy’s record quarterly fall as worrisome. In turn, this undermined the sentiment around the British Pound and contributed to the currency pair modest losses.

Also weighed on the quote was the reports that the E.U. representatives have dropped the discussions over the U.K. and the European Union’s post-Brexit relationship as a subject for the next week’s meeting. However, these gloomy headlines overshadowed the previous day’s positive comments from the Irish leader Michael Martin.

The fresh challenges to the US-China relations exerted further downside pressure on the market trading sentiment across the pond. It is worth reporting that the Trump administration considers imposing sanctions on those companies helping China mark its presence in the South China Sea. This happens after the dragon nation fired missiles in the drills around the debatable region.

At the USD front, the broad-based U.S. dollar was down on Thursday morning in Asia ahead of U.S. Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole symposium later. Whereas, the losses in the U.S. dollar become the key factor that kept the GBP/USD currency pair 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).

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, and the coronavirus (COVID-19) updates, could not lose their importance.

  

 

Daily Technical Levels

Support Pivot Resistance
1.3144 1.3182 1.3247
1.3079 1.3285
1.3040 1.3351

 GBP/USD– Trading Tip

The GBP/USD has distrub[ted the narrow trading range of 1.3140 – 1.3056, and upward breakout of GBP/USD is expected to lead the Cable prices further higher until 1.3262 mark. On the upper side, the GBP/USD pair may face the next resistance around 1.3262 mark and above this 1.3295. Technically, 50 periods of EMA, RSI, and MACD all are suggesting a bullish trends in the GBP/USD pair. Let’s look for buying trades above 1.3146 level.

USD/JPY – Daily Analysis

The USD/JPY was closed at 105.985 after placing a high of 106.554 and a low of 105.954. After posting gains for three consecutive days, USD/JPY pair declined on Wednesday amid the broad-based U.S. dollar weakness ahead of Fed Chair Jerome Powell’s speech on Thursday.

The traders were selling USD/JPY pair over the rising hopes that a next stimulus package was on its way. As in result, the U.S. Dollar Index (DXY) fell by 0.1% against its rival currencies and weighed further on the U.S. dollar that dragged the currency pair on the low side.

The Chairman of Federal Reserve, Jerome Powell, will deliver a speech via video conference at Jackson Hole Symposium on the next day and provide an annual central bank’s monetary policy framework review.

Investors believe that the speech will make a strong case about the monetary stimulus, so they are awaiting it to find fresh clues about how the Fed will support the economy further through the coronavirus pandemic crisis.

Another reason behind waiting for the Fed’s Chair Powell’s speech is to determine whether Fed will favor shifting from a long-run inflation target of 2% to an average level of inflation as it will raise inflation and will make the U.S. dollar weak before raised interest rates.

The U.S. dollar was lower on the day ahead of the next stimulus measure as Powell’s dovish expectations increased. If Powell’s speech provided the expected clues, then the U.S. dollar will fell even more and weighed on USD/JPY to move it below 104 level.

Whereas, on the data front, at 04:50 GMT, the SPPI for the year from Japan rose to 1.2% from the expected 0.8% and supported Japanese Yen and added losses in currency pair. From the U.S. side, the Core Durable Orders for July rose to 2.4% from the expected 1.9% and supported the U.S. dollar. The Durable Goods Orders for July also rose to 11.2% from the estimated 4.4% and supported the U.S. dollar. The strong U.S. dollar capped additional losses in the USD/JPY on Wednesday.

Meanwhile, the additional losses in currency pair were supported by the rising tensions between the U.S. & China. On Wednesday, 24 Chinese companies were penalized by the Trump Administration due to their contribution to China’s controversial island-building campaign.

The U.S. banned Chinese companies from buying the U.S. products citing their role in helping the Chinese military construct artificial islands in the disputed South China Sea. The U.S. had already penalized dozens of Chinese companies over national security concerns and violations of human rights, and now China’s encroachment in the South China Sea has also added in it. Now it is remained to see the response of China over this penalty by the U.S. The ongoing tensions between the U.S. & China added strength in Japanese Yen that further supported the USD/JPY pair’s bearish trend on Wednesday.

Meanwhile, the risk sentiment that took its pace yesterday on the back of renewed hopes on the vaccine was faded away after the latest warning from the top U.S. virus expert Dr. Anthony Fauci. He said that before the vaccine’s approval for safety and efficiency, the usage of vaccines could be harmful. He warned that it could affect the development of other vaccines.

President Donald Trump had considered plans to put out a vaccine before it was tested and approved to increase his re-election chances in upcoming November’s presidential elections. Democrats have blamed Trump for endangering American lives for political gain. It has also weighed on risk sentiment and added in the currency pairs losses on Wednesday.

Daily Technical Levels

Support Pivot Resistance
105.7600 106.1600 106.3700
105.5500 106.7700
105.1500 106.9800

USD/JPY – Trading Tips

The USD/JPY is consolidating in an upward channel, which is supporting the pair at 105.820. On the upper side, the USD/JPY is likely to gain an immediate resistance around 106.566 as well as 107.078. Looking at

the 2-hour chart, the 50 periods EMA is extending resistance at 106.069. Simultaneously, the MACD and RSI are holding in a selling zone, below 50 and 0, respectively. The USD/JPY may trade bullish over 105.850 to target 107.084 and selling below 105.829. Good luck! 

 

Categories
Forex Signals

EUR/USD Violates Resistance – Buying Signal Doing Well! 

The EUR/USD succeeded to extended its early-day bullish rally and hit the fresh intra-day highs above the mid-1.1800 level. However, the reason for the gains in currency pair could also be attributed to the broad-based U.S. dollar bearish bias, triggered by the on-going uncertainty surrounding the much-awaited U.S. fiscal stimulus and the second wave of coronavirus (COVID-19). 

On the other hand, the reports that the country’s Finance Minister Olaf Scholtz outlined a EUR10 bn job subsidy extension plan, eventually underpinned the shared currency and contributed to the currency pair gains. In the meantime, the rising number of coronavirus in Europe became the key factor that kept the lid on any additional gains in the currency pair. At the moment, the EUR/USD currency pair is currently trading at 1.1850 and consolidating in the range between 1.1832 and 1.1868.

During speaking on a German TV late on Weakened, the country’s Finance Minister Olaf Scholtz sketched a job subsidy extension plan worth 10 billion Euros. The plan will extend up to 2 years and will allow firms to keep their employees and avoid layoffs. It will cover about 60% or more of salary. This supported the shared currency Euro and added in the upward trend of EUR/USD pair. 

On the other hand, the online meeting between the world’s top two nations I,e the U.S. & China has been postponed without giving any future dates, that was initially scheduled for Saturday. However, this report played a negative role in the market trading sentiment and capped further gains in the equity market. The negative impact on the equity market decreased the risk sentiment and limited the early daily gains of currency pair EUR/USD.

At the USD front, the broad-based U.S. dollar reported losses on the day as the United States still faces uncertainty over the much-awaited coronavirus (COVID-19) relief package, which eventually destroyed hopes for a quick U.S. economic recovery.


The EUR/USD pair continues to trade bullish amid major resistance breakout of 1.1866 level. Continuation of an upward movement may drive more buying until 1.1909 level as the 50 EMA, RSI and MACD are supporting bullish bias. Checkout a trading signal below…

Entry Price – Buy 1.1871

Stop Loss – 1.1831

Take Profit – 1.1911

Risk to Reward – 1:1

Profit & Loss Per Standard Lot = -$400/ +$400

Profit & Loss Per Micro Lot = -$40/ +$40

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368

Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

Categories
Forex Signals

EUR/USD Choppy Trading Continues – An Update on Signal!

The EUR/USD remain depressive near 1.18 level, mainly due to the coronavirus latest report, which fueled fears that the economic recovery could halt once again. Despite the risk-off market sentiment in the Asian stock markets, the broad-based U.S. dollar struggled to draw safe-haven bids but failed at least now. In turn, the currency pair got helped to limit its deeper losses and hold above 1.18 level. The on-going U.S. Congress’s failure to reach an agreement for the country’s latest COVID-19 stimulus package also adds a burden to the greenback and helps currency pair. At the moment, the EUR/USD currency pair is currently trading at 1.1802 and consolidating in the range between 1.1791 – 1.1826.

The Cases increased by 1,449 in Germany on the day against Thursday’s +1,445. While the death count increased by 14, the tally showed. Considering the current situation of the virus in Europe, Germany’s Health Minister Jens Spahn said that they are very concerned about the surge in the coronavirus cases but assured that the health system would control everything. As in result, the shared currency weakened and contributed to the currency pair losses.

On the other hand, the on-going uncertainty surrounding the much-awaited U.S. fiscal stimulus or the second wave of coronavirus (COVID-19) adds burden on the broad-based U.S. dollar and capped further downside for the currency pair. The Democrats and Republicans are still struggling to approve an additional stimulus package as authorities hinted that additional stimulus is needed to control the recent wave of the coronavirus’s negative impact.

Despite Thursday’s upbeat U.S. jobs data, the broad-based U.S. dollar failed to gain any positive traction and edged lower on the day as doubts over the U.S. economic recovery remain amid coronavirus crisis. However, the losses in the U.S. dollar helped the currency pair to limit its deeper losses. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies dropped 0.08% to 93.243.

Across the pond, the investor sentiment dampened once again by disappointing Chinese data released earlier in the day. At the data front, China’s industrial production increased by 4.8% over the previous year in July. At the same time, the output expanded for the 4th-straight month, against expectations for a 5.1% year-on-year rise. In the meantime, the retail sales fell 1.1%, worse than an expected 0.1% expansion.

The data overshadowed the optimism made by the deceleration in China’s factory deflation signaled by the producer price index released earlier this month and weakened the risk sentiment in the Asia markets. However, the risk-off market sentiment helped the U.S. dollar put the safe-haven bid and capped its deeper losses.

Moving on, the shared currency could face losses if the Eurozone Gross Domestic Product, which is scheduled to release at 09:00 GMT, shows a bigger-than-expected economic recession in the 2nd-quarter.



The EUR/USD is trading neutral on Friday, as traders seem to wait for major economic data to help drive a breakout. The bullish sentiment seems dominant as the EUR/USD pair trades at 1.1818 level, holding right below an immediate resistance level of 1.1820. Below this, the pair is likely to trade bearish until 1.1783 and 1.1745 level. Conversely, the bullish breakout of the 1.1820 level can lead the pair to be further higher until 1.1860 and the 1.1890 levels.

Entry Price – Sell 1.18014
Stop Loss – 1.18414
Take Profit – 1.17614
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368

Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

Categories
Forex Market Analysis

Daily F.X. Analysis, August 14 – Top Trade Setups In Forex – Eyes U.S. Retail Sales!

On the news side, the eyes will remain on the U.S. retail sales data and the Prelim UoM Consumer Sentiment from the United States. Both of the events are expected to drop from their previous figures. Typically such kind of data drives bearish movement in the U.S. dollar. Therefore, the market can trade a weaker dollar sentiment today.

Economic Events to Watch Today   

 

 


EUR/USD – Daily Analysis

The EUR/USD currency pair succeeded to extended its previous session bullish rally and hit the fresh intra-day highs towards 1.1800 level. However, the reason for the gains in currency pair could also be attributed to the broad-based U.S. dollar bearish bias, backed by fears that U.S. economic recovery from COVID-19 continuing to diminish. The on-going U.S. Congress’ failure to reach an agreement for the country’s latest COVID-19 stimulus package also added a burden to the greenback and contributed to the currency pair gains. 

On the contrary, the growing cases of coronavirus in Germany became the key factor that kept the lid on any additional gains in the currency pair. At the moment, the EUR/USD currency pair is currently trading at 1.1831 and consolidating in the range between 1.1781 – 1.1838.

The on-going uncertainty surrounding the much-awaited U.S. fiscal stimulus or the second wave of coronavirus (COVID-19), not to forget the latest tension between America and China over TikTok, weighed on the broad-based U.S. dollar and contributed to the currency pair gains. It should be noted that the Democrats and Republicans are still struggling to approve an additional stimulus package as authorities hinted that additional stimulus is needed to control the negative impact of the recent wave of the coronavirus.

At the coronavirus front, the number of reported coronavirus cases increased to 219,964, with a total of 9,211 deaths tolls, as per the German disease and epidemic control center, Robert Koch Institute (RKI), on Thursday. Meanwhile, the Cases rose by 1,445 in Germany on Thursday against Wednesday’s +1,226. Whereas the death toll increased by 4, the tally showed. Despite this, the shared currency did not give any major attention to it and remains unperturbed by the renewed virus concerns.

The market players will keep their eyes on the Retail Sales m/m, Core Retail Sales m/m, and Prelim UoM Consumer Sentiment, which is scheduled to be released during the New York session. 

Daily Technical Levels

Support Pivot Resistance
1.1773 1.1819 1.1857
1.1735 1.1903
1.1689 1.1942

EUR/USD– Trading Tip

The EUR/USD is trading neutral on Friday, as traders seem to wait for major economic data to help drive a breakout. The bullish sentiment seems dominant as the EUR/USD pair trades at 1.1818 level, holding right below an immediate resistance level of 1.1820. Below this, the pair is likely to trade bearish until 1.1783 and 1.1745 level. Conversely, the bullish breakout of the 1.1820 level can lead the pair to be further higher until 1.1860 and the 1.1890 levels.


GBP/USD – Daily Analysis

The GBP/USD currency pair succeeded in stopping its previous-day losing streak and rose closer to 1.3100 level, mainly due to the broad-based U.S. dollar weakness. That was triggered by the coronavirus crisis in the U.S., which continued to fuel worries that the second wave of COVID-19 cases could undermine the U.S. economy.

The repeated inability over the much-awaited stimulus also adds pressure on the U.S. dollar and further pushed the currency pair. On the other hand, the fresh optimism over the UK-US relations also added strength around the Pound currency and contributed to the currency pair gains. On the other hand, the on-going pessimism of coronavirus (COVID-19) second wave in the U.K., and the UK-Japan lingering trade talks became the major factors that kept the lid on any further gains in the currency pair. Currently, the GBP/USD currency pair is currently trading at 1.3084 and consolidating in the range between 1.3031 – 1.3093.

The U.K. Trade Secretary Liz Truss declared that she is very satisfied as the United States has not implemented additional tariffs, which gave some support to the local currency and extended further upside momentum in the pair.

The U.K. formally started to face recession the previous day, with over 20% of GDP drop across the pond. In turn, the British business leaders and trade unions urged the extension of furlough scheme beyond October expiry; Chancellor Rishi Sunak sees promising signs off-late.

At the Brexit front, the Brexit jitters remain on the card as the fisheries and level-playing field being the tardiest obstacle. However, the policymakers from both sides are set to resume the sixth round in the next week. Apart from this, the U.S. criticized the European Union (E.U.) due to its lack of action regarding the airbus case. Elsewhere, the U.S. added some French and German goods to the tariff list while removing a few from the U.K. and Greece.

On the other hand, the rising COVID-19 cases, especially in the U.S., Australia, Japan, and some of the notable Asian nations like India, fueled concerns that the economic recovery could halt once again, which ultimately drags the broad-based U.S. dollar under pressure. The on-going uncertainty surrounding the much-awaited U.S. fiscal stimulus and the latest tension between America and China over TikTok also weighed on the broad-based U.S. dollar and contributed to the currency pair gains.

As a result, the broad-based U.S. dollar reporting losses on the day amid the failure of the U.S. stimulus package, as well as the United States still facing virus woes, ultimately crushed hopes for a quick economic recovery. Nevertheless, the losses in the U.S. dollar helped the currency pair to stay higher.  


Daily Technical Levels

Support Pivot Resistance
1.3021 1.3073 1.3116
1.2977 1.3169
1.2925 1.3212

GBP/USD– Trading Tip

The GBP/USD consolidates at 1.3070 level, holding right above the 50 periods EMA support area of 1.3040 level while the bearish breakout of 1.3040 level can extend selling unto 1.2918 level. Recently as we can see in the chart above that the GBPUSD pair has violated its upward trendline that supported the pair around 1.3130 level, and now below this, we can expect GBP/USD to continue trading bearish. The GBP/USD should show a bearish crossover to confirm a strong selling bias in the Cable. On the higher side, Sterling may find resistance at 1.3105 and 1.3175. Let’s consider selling below 1.3045 level today. 


USD/JPY – Daily Analysis

The USD/JPY currency pair failed to extend its previous 4-day bullish bias and dropped just above the mid-106.00 level, mainly due to the broad-based U.S. dollar weakness triggered by the worries that the second wave of COVID-19 cases in the United States could ruin the recovery in the world’s biggest economy. The on-going doubts over the U.S. Stimulus Package also weighed on the American currency and contributed to the pair losses. On the other hand, the concerns about intensifying US-China relations and U.S. Trade Representative Robert Lighthizer’s verbal attack on Europe extended some additional support to the safe-haven Japanese yen, which exerted an additional burden on the currency pair. Apart from this, the upbeat performance of Japanese PPI also underpinned the Japanese yen and pushed currency pair further lower. At this particular time, the USD/JPY currency pair is currently trading at 106.91 and consolidating between 106.57 – 106.94.

Despite the reduction in coronavirus cases, the fears about the U.S. economic recovery still hover all over the market and keep the U.S. dollar bulls defensive. As per the latest report, the figures have crossed almost 5.2 million cases in the U.S. alone as of August 13, as per the Johns Hopkins University and millions unemployed.

Meanwhile, the risk-off market sentiment was further bolstered by the long-lasting disappointment over the lack of progress in the much-awaited fiscal package. U.S. President Donald Trump accused Democrats that they are not willing to negotiate over the package.

As in result, the broad-based U.S. dollar failed to gain any positive traction on the day and reported losses as the United States crisis of virus could break hopes for a quick economic recovery, which kept the investors careful. However, the losses in the U.S. dollar kept the currency pair bearish. 

Also weighing on the market trading sentiment could be the U.S. Central Command’s statement suggesting the Iranian Navy overtaking a ship called “Wila.” Besides, the U.S. Trade Representative Robert Lighthizer’s verbal attack on Europe also adds a burden to the market trading sentiment.

Across the Pound, the losses in the currency pair could also be associated with Japanese PPI’s upbeat performance, which eventually underpinned Japanese yen and contributed to the currency pair declines. At the data front, Japan’s July month Producer Price Index (PPI) grew past-0.3% forecast on MoM to 0.6%. Further, the yearly figures slipped less than -1.1% expected level to -0.9%.

Daily Technical Levels

Support Pivot Resistance
106.6400 106.8500 107.1400
106.3500 107.3500
106.1400 107.6400

USD/JPY – Trading Tips

The USD/JPY trades sideways over resistance become a support level of 106.628 level. Above this, the USD/JPY pair is opening further room for buying until 107.450 level. The RSI and MACD are also supporting bullish bias in the pair. A recent bullish breakout of 106.450 level can extend the buying trend until 107.390. The current market price of USDJPY is staying over 50 EMA, which extends support at 105.950 and may push the pair higher. Let’s consider buying above 106.480 level today. Good luck! 

Categories
Forex Signals

EUR/USD Manual Close at 20 Pips Loss – Reason Explained! 

The EUR/USD pair traded in a bearish mode earlier today when we opened a sell trade at 1.17132. However, every soon, the market sentiment started to change, and the EUR/USD pair started forming a bullish setup. We decided to cut the minor loss in the EUR/USD pair, instead of keeping it until it hit loss. 

As we see now, the EUR/USD has formed three white soldiers’ candlestick patterns suggesting strong bullish bias in the EUR/USD pair. On the higher side, the EUR/USD may head further higher until the 1.1799 level. The hope provided by Trump raised US dollar bars in the market, and that pulled EUR/USD pair from its daily high to below 1.1800 level.

Meanwhile, the risk sentiment was also disturbed by the fears of escalating China-US tensions, as China announced that it would also impose sanctions on 11 Americans in retaliation to the US same sanctions on Hong Kong & Chinese officials. The list of Americans to be sanctioned by China included Senator Macro Rubio and Ted Cruz also.

The faded risk sentiment weighed on EUR/USD pair and pair started to lose its daily gains.

At 17:30 GMT, the Core PPI from the US for July rose to 0.5%from the 0.1% of expectations and supported the dollar. The PPI for July also rose to 0.6% from the expected 0.3% and came in favor of the dollar.

The better than expected PPI data from the US added strength to the US dollar and added pressure to EUR/USD pair, causing it to lose all daily gains and close at the same level the market was opened.


The EUR/USD is trading at 1.1790 level, heading to test the triple top resistance level of 1.1800 level. The closing of candles below 1.1800 level can drive more selling in the pair until the 1.1760 level is met. On the higher side, the EUR/USD pair may find resistance at 1.1835 level after 1.1800 level. In contrast, support continues to stay at 1.1759. Let’s wait for the next entry from our side. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, August 12 – Top Trade Setups In Forex – Stronger Dollar Continues to Play! 

On the news side, the eyes will remain on the UK GDP and U.S. CPI figures. U.S. inflation is expected to drop, and it can impact the U.S. dollar negatively. Conversely, the UK GDP figures are anticipated to have improved, but the prelim GPD seems to perform badly. A mixed response can be seen in news releases.

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17393 after placing a high of 1.18078 and a low of 1.17217. Overall the movement of the EUR/USD pair remained flat throughout the day. 

In the first session of Tuesday, EUR/USD pair took bids and surged above 1.18050 level, but after the release of U.S. economic data, the EUR/USD pair started to decline and posted losses. The pair ended its day on the same level it started its day with and hence, gave a smooth movement throughout the day.

The fresh risk appetite droved the rise in the EUR/USD pair amid the registration of the first coronavirus vaccine from Russia. Russia became the first country to register its vaccine for coronavirus, and this news gave a push to heavy risk appetite in the market.

The stock markets rushed to their higher level on this news, and the riskier currency Euro also gained from it in the early trading session. The gains continued after the release of macroeconomic data from the European side.

At 14:00 GMT, the ZEW Economic Sentiment for Eurozone in August surged to 64.0 against the expected 55.3 and supported the single currency. The ZEW Economic Sentiment for Germany surged to 71.5 from the anticipated 57.0 and supported Euro. The better than expected economic sentiment for the month gave strength to a single currency and pushed EUR/USD pair above 1.18050 level.

However, the gains could not last for long as the U.S. President Donald Trump announced that he was very seriously considering a capital gains tax cut to help job creation. If Trump gave another executive order on capital taxation, it would likely face legal challenges as it would push the boundaries of the President’s executive orders.

Daily Technical Levels

Support Pivot Resistance
1.1704 1.1756 1.1790
1.1670 1.1842
1.1618 1.1876

EUR/USD– Trading Tip

The EUR/USD pair is trading at 1.1720 level, testing the triple bottom support level of 1.1714 level. Closing of candles below 1.1710 level can drive more selling in the pair until 1.1639 level. On the higher side, the EUR/USD pair may find resistance at 1.1793 level. Three black crows on the 4-hour timeframe are suggesting odds of selling trend continuation in the EUR/USD.


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.30470 after placing a high of 1.31318 and a low of 1.30413. Overall the movement of GBP/USD pair remained bearish throughout the day. The GBP/USD pair dropped on Tuesday and posted losses as the unemployment benefits claims surged in the local country and also because of the strength of the U.S. dollar onboard.

At 04: 01 GMT, the BRC Retail Sales Monitor from Great Britain surged to 4.3% from the expected 2.5% and supported British Pound. At 11:00 GMT, the Claimant Count Change for July rose to 94.4K from the expected 9.7K and weighed heavily on British Pound. The Unemployment Rate from the U.K. came in as 3.9% in June and fell short of expectations of 4.2% and supported GBP.

The most important data on Tuesday was the clamant count change from the U.K. that showed that more people applied for unemployment benefits in July. According to the Office of National Statistics, around 730,000 people have become unemployed since March this year, and since June, further 114,000 people have lost their jobs.

However, the jobless rate remained flat at 3.9% in June; this reflected that the number of people who had given up looking for work increased.

The ONS Deputy national statistician, Jonathan Athow, said that the labor market had continued its recent fall in employment and significantly reduced work hours because many people were furloughed.

The people without a job and those who were not even looking for a job but wanted to work increased as the demand for workers was depressed.

It is also believed that the full extent of Britain’s’s job problems has been hidden under the Government’s furlough scheme, which promised to cover 80% of the salaries of workers who could not work due to lockdown.

Daily Technical Levels

Support Pivot Resistance
1.3016 1.3074 1.3107
1.2983 1.3165
1.2925 1.3197

GBP/USD– Trading Tip

On Tuesday, the GBP/USD consolidates at 1.3067 level, holding right above the 50 periods EMA support area of 1.3040 level while the bearish breakout of 1.3040 level can extend selling unto 1.2918 level. Recently as we can see in the chart above that the GBPUSD pair has violated its upward trendline that supported the pair around 1.3130 level, and now below this, we can expect GBP/USD to continue trading bearish. The GBP/USD should show a bearish crossover to confirm a strong selling bias in the Cable. On the higher side, Sterling may find resistance at 1.3105 and 1.3175. Let’s consider selling below 1.3045 level today. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 106.491 after placing a high of 106.682 and a low of 105.870. Overall the movement of the USD/JPY pair remained bullish throughout the day. The USD/JPY pair extended its previous day gains and rose for the 3rd consecutive day on Tuesday amid increased risk appetite in the market. The Russian vaccine, U.S. Stimulus package, Trump’s executive orders, and the rise of the equity market drove Tuesday’s move of USD/JPY pair.

In the early session of Tuesday, the President of Russia, Vladimir V. Putin, announced that the Russian government had approved the world’s first coronavirus vaccine. Putin said that his daughter had taken the vaccine in a cabinet meeting, and it has worked adequately enough to declare it safe.

However, global health authorities have said that the vaccine has to complete the last stage of clinical trials to be approved. Despite this, Mr. Putin thanked the scientists in a congratulatory note to the nation who developed the vaccine. He also said that it was “the first” very important step for Russia and generally for the whole world.

Scientists in Russia and other countries said that rushing to offer the vaccine before final-stage testing could backfire. Tens of thousands of people are included in the final stage of trials, and it could take months to prove its effectiveness.

However, investors cheered the news of the vaccine as it was long-awaited, and as in result, the risk appetite of the market rose. The equity markets surged that weighed on the safe-haven Japanese Yen, which ultimately pushed the USD/JPY pair higher, which keeps challenges the upbeat market tone. In the meantime, the White House National Security Adviser Robert O’Brien blamed China while saying that the “Chinese hackers have been targeting U.S. election infrastructure ahead of the 2020 presidential election.” These gloomy updates capped further upside in the currency pair by giving support to the safe-haven Japanese yen.

As a result of the upbeat U.S. data, the broad-based U.S. dollar succeeded in gaining some positive traction on the day. Still, the bullish bias in the U.S. dollar is expected to be short-lived as doubts remain about the U.S. economic recovery amid on-going coronavirus cases. However, the gains in the U.S. dollar became the key factor that kept the currency pair higher.

Daily Technical Levels

Support Pivot Resistance
106.0400 106.3700 106.8200
105.5900 107.1500
105.2600 107.6000

USD/JPY – Trading Tips

The USD/JPY trades sharply bullish to break out of the sideways trading range of 106.480 – 105.440. Bullish crossover of 106.480 level is opening further room for buying until 107.450 level. The RSI and MACD are also supporting bullish bias in the pair. A recent bullish breakout of 106.450 level can extend the buying trend until 107.390. The current market price of USDJPY is staying over 50 EMA, which extends support at 105.950 and may push the pair higher. Let’s consider buying above 106.480 level today. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, August 11 – Top Trade Setups In Forex – Stronger Dollar In Play! 

On the news front, the economic calendar is a bit light and may not be offering any major economic release. Therefore, we need to trade based upon stronger dollar sentiment, as traders are likely to price better than expected NFP data from last week.

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17363after placing a high of 1.18005 and a low of 1.17358. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD pair extended its previous day’s losses on Monday amid the strong U.S. dollar and increasing US-China tensions. The main driver of the EUR/USD pair on Monday was the U.S. dollar.

The U.S. Dollar was strong across the board with the U.S. Dollar Index at 93.5 level, with investors taking comfort from President Donald Trump’s move to boost the economy in the wake of coronavirus pandemic.

Over the weekend, U.S. President Trump signed a series of executive orders aimed at enhancing the economic condition. The orders included an extension of expanded jobless benefits at a lower rate of $400 a week. It was down from the previous $600 a week. The State government will pay 1/4th of the bill, which was also included in Trump’s order.

However, it is not clear that the executive orders can withstand court scrutiny as the power relies on Congress. Nevertheless, the President’s orders were an attempt to play his part in breaking the impasse. Though the talks between Republicans & Democrats on August 7 broke some of the differences, they still did not show any consensus. The new round of talk is expected to resume at some point, but the date is not yet confirmed.

The chances for a $3 trillion stimulus package have been compromised to $2 trillion by Democrats, but that is still a trillion more than the framework that the ruling party aimed for. Additionally, the JOLTS Job Openings data from the U.S. on Monday came in as 5.89 M in June in comparison to 5.30M of forecasts and supported the U.S. dollar that weighed on EUR/USD pair.

From the Europe side, the Sentix Investor Confidence for August dropped to -13.4 from the anticipated -16.0 and the previous -18.2 and supported Euro that kept the losses of EUR/USD pair limited on Monday.

Meanwhile, early on Monday, the Defence Ministry of Taiwan said that a Chinese jet fighter crossed the median of the Taiwan Strait line, possibly in response to the U.S. Health Secretary Alex Azar’s visit to Taipei.

Any form of American recognition of the island nation Taiwan that China claimed its own make Beijing angry, and hence, it responded. The tensions in Taiwan have grown since the Hong Kong clash between the U.S. & China.

Besides this, the world’s biggest nations are also clashing over the technological front; recently, the U.S. banned American firms from dealing with TikTok and WeChat app. However, the most important matter between both countries lies with the fulfillment of the phase-one trade deal. Negotiators from both sides are scheduled to meet this week to analyze the achievements of the deal. The risk-off market sentiment was picking its pace after the escalation of US-China tensions, and it has weighed on the riskier pair EUR/USD.

Daily Technical Levels

Support Pivot Resistance
1.1713 1.1758 1.1780
1.1691 1.1825
1.1646 1.1848

EUR/USD– Trading Tip

The single currency Euro slipped against the U.S. dollar amid increased USD demand as traders started to price in stronger than expected NFP data released on Friday. The EUR/USD is now bouncing off the support level of the 1.1728 level. It may head higher towards 23.6% Fibonacci retracement level of 1.1768, and above this, the next resistance can stay at 1.1765 level, which marks 38.2% Fibonacci retracement level.


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.30730 after placing a high of 1.31032 and a low of 1.30188. Overall the movement of GBP/USD pair remained bullish throughout the day. The GBP/USD pair rose on Monday ahead of key data due later this week, despite the U.S. dollar’s strength. The risk sentiment favored some of the factors, and investors believe that further upside could be on the horizon.

The latest higher move in the Pound was because of the key economic data, including the update of the labor market and second-quarter GDP scheduled to be released later this week. Moreover, the GBP/USD pair was also supported by the improving risk sentiment in the market after the hopes about the US-China phase-one trade deal became optimistic.

The U.S. trade representative and U.S. Treasury Secretary will meet the Chinese Vice Premier later this week to evaluate the implementation of the phase-one trade deal by China. China has assured that it will fulfill its promises made under the agreement that include the increased U.S. farm purchases and the better protection of Intellectual property rights.

This faded some of the risk-off market sentiment and caused GBP/USD to surge.

The risk sentiment was backed by the comments of WHO Chief Scientist Dr. Soumya Swaminathan, who praised the global efforts in the development of the COVID-19 vaccine. She reported that almost 200 vaccines were being developed globally and were in the stage of clinical or pre-clinical trials. According to her, 24 vaccines had entered the clinical trials in human beings.

The unprecedented global efforts to develop the coronavirus vaccine triggered the risk-on market sentiment as various potential paths to the end of coronavirus gave hope to the investors. The improved risk appetite gave a push to GBP/USD pair on Monday.

On Brexit front, the U.K. media has suggested that David Frost remain the U.K.’s chief Brexit negotiator and will stay on committed to securing an agreement with the European Union even if a deal is not secured by the end of September.

The U.K. formally left the E.U. in January after voting to leave in 2016, and negotiations to reach post-Brexit trade deal are currently deadlocked because both sides have failed to reach a consensus on various matters.

As the end of the transition periods is getting closer day by day, Prime Minister Boris Johnson has vowed to end the year with or without a deal, outside Europe. David Frost is set to take up a new position as National Security Advisor (NSA) in September. However, his position as Chief Brexit Negotiator will remain in place.

Meanwhile, the U.K. government pledged a further 20 Million Pounds in aid to Lebanon following Tuesday’s deadly explosion in Beirut. The U.K.’s support will directly go to the injured and people displaced by the explosion. It will also provide food, medicine, and urgent supplies to the needy in Lebanon affected by the explosion.

The U.K. government has already given 5 Million Pound to the emergency relief effort and said that it would stand by the Lebanese people in the hour of need. This also helped GBP in recovering its position and pushed GBP/USD pair higher on Monday.

Daily Technical Levels

Support Pivot Resistance
1.3024 1.3064 1.3110
1.2978 1.3150
1.2938 1.3196

GBP/USD– Trading Tip

On Tuesday, the GBP/USD consolidates at 1.3067 level, holding right above the 50 periods EMA support area of 1.3040 level while the bearish breakout of 1.3040 level can extend selling unto 1.2918 level. Recently as we can see in the chart above that the GBPUSD pair has violated its upward trendline that supported the pair around 1.3130 level, and now below this, we can expect GBP/USD to continue trading bearish. The GBP/USD should show a bearish crossover to confirm a strong selling bias in the Cable. On the higher side, Sterling may find resistance at 1.3105 and 1.3175. Let’s consider selling below 1.3045 level today. 


USD/JPY – Daily Analysis

The USD/JPY currency pair succeeded to break its previous session thin trading range and rose above 106.00 marks mainly due to the broad-based U.S. dollar fresh strength, buoyed by the Friday’s better-than-expected employment report, which eventually helped the U.S. dollar to put the bids. 

On the other hand, the upbeat market sentiment, backed by the optimism that the U.S. policymakers are showing signs to resume talks about the stimulus package, undermined the safe-haven Japanese yen and contributed to the pair’s gains. In the meantime, the risk-on market sentiment was further bolstered by the upbeat key U.S. and China data, which tends to urge buyers to invest in riskier assets instead of safe-have assets. Currently, the USD/JPY currency pair is currently trading at 106.00 and consolidating in the range between 105.72 – 106.06.

Despite concerns about the ever-increasing coronavirus cases across the world and worsening US-China relations, the investors continued to cheer the hopes of the U.S. fiscal stimulus package triggered by the signs that White House officials and congressional Democrats showed a willingness to compromise on another stimulus package to bolster the stalled economy. 

On the other hand, U.S. President Donald Trump fulfilled his promise to take executive action as the U.S. Congress failed to offer any outcome over the country’s latest stimulus measures. As a result, U.S. President Trump’s signed four executive orders to release unemployment claim benefits, help with student loans, and aid those living in a rented house, which also exerted a positive impact on the market trading sentiment and contributed to the currency pair losses.

Moreover, the upbeat market sentiment was being supported by Friday’s better-than-expected employment report. Details suggested Non-farm payrolls increased by 1.763 million in July month, vs. the estimated 1.6 million increase. The unemployment rate also declined to 10.2% in July, compared to June’s reading of 10.5%.

Despite the positive data, the doubts remain about the U.S. economic recovery amid the on-going surge in the coronavirus cases. As per the latest report, the U.S. crossed the five million COVID-19 cases as of August 10, according to Johns Hopkins University. Whereas Australia’s 2nd-most populous state, the epicenter of the pandemic, Victoria, reported the biggest single-day rise in deaths. As per the latest figures, Australia’s coronavirus death losses crossed 314 as Victoria announces a daily record of 19 deaths and 322 new cases in the past 24 hours. 

Apart from the virus woes, the long-lasting struggle between the world’s two largest economies remained on the cards as U.S. President Donald Trump turned off the business tap for China’s TikTok and WeChat. As well as, the U.S. imposed sanctions on the Hong Kong Leader Carry Liam, which keeps challenges the upbeat market tone. In the meantime, the White House National Security Adviser Robert O’Brien blamed China while saying that the “Chinese hackers have been targeting U.S. election infrastructure ahead of the 2020 presidential election.” These gloomy updates capped further upside in the currency pair by giving support to the safe-haven Japanese yen.

As a result of the upbeat U.S. data, the broad-based U.S. dollar succeeded in gaining some positive traction on the day. Still, the bullish bias in the U.S. dollar is expected to be short-lived as doubts remain about the U.S. economic recovery amid on-going coronavirus cases. However, the gains in the U.S. dollar became the key factor that kept the currency pair higher.

Daily Technical Levels

Support Pivot Resistance
105.6900 105.9500 106.1900
105.4500 106.4500
105.1900 106.7000

USD/JPY – Trading Tips

The USD/JPY has made a slight bullish recovery from 105.780 to 106.150 area, especially after examining the 38.2% Fibonacci support level of 105.650. A bullish breakout of 106.467 resistance level can drive more buying until the next resistance area f 107.198. On the lower side, the USD/JPY may find support at 105.600 and 105.078, extended by the 38.2% and 61.8% Fibonacci retracement level. The current market price of USDJPY is staying over 50 EMA, which extends support and may push the pair higher. Let’s consider buying above 105.750 level today. Good luck! 

Categories
Forex Signals

EUR/USD Downward Channel Continues to Drive Selling


Entry Price – Sell 1.17411
Stop Loss – 1.17811
Take Profit – 1.17011
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368
Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

Categories
Forex Signals

EUR/USD Stays Below 50 EMA – Quick Update on Sell Signal! 

The EUR/USD continues to trade bearish below 1.1800 support. It becomes a resistance level, having hit the low of 1.1740 level mainly due to the broad-based U.S. dollar latest recovery moves, supported by Friday’s better-than-expected employment report. However, the gains in the U.S. dollar could be limited or short-lived as uncertainty remains about the U.S. economic recovery. 

On the other hand, the latest Bank of France economic forecasts confirmed that the euro economy contracted in line with expectations in the 2nd-quarter of 2020, which tends to undermine the shared currency and contributed to the currency pair losses. At the moment, the EUR/USD currency pair is currently trading at 1.1768 and consolidating in the range between 1.1760 – 1.1801.


Technically, the EUR/USD is trading at 1.1762, and our forex trading signal seems to be doing fine now. Closing of candles below 50 periods EMA at 1.1805 is suggesting odds of bearish trend continuation. The leading indicators, such as RSI and MACD, are still holding in a selling zone and can drive EURUSD prices further lower until the 1.1700 level. Besides, the 2-hour timeframe also shows the lowers low and lowers high pattern, which also supports the bearish trend of the EUR/USD. Check out our forex trading signal below…

Entry Price – Sell 1.17523
Stop Loss – 1.17923
Take Profit – 1.17123
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368
Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

Categories
Forex Market Analysis

Daily F.X. Analysis, August 07 – Top Trade Setups In Forex – Big Day, NFP is Here! 

The Non-farm payrolls will extend clarity over the damage in the labor market last month, and traders will keenly await its release. Overall, economists expect a slight improvement in the U.S. unemployment rate from 11.1% to 10.5%, while the Average Hourly Earnings are expected to improve from -1.2% to -0.5%%. The NFP itself is expected to report 1530K (negative for a dollar) vs. 4800K figures beforehand.

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD closed at 1.18640 after placing a high of 1.19048 and a low of 1.17927. The EUR/USD once again saw a bullish movement after a brief U.S. dollar recovery attempt earlier this week. Despite worsened coronavirus cases in some Eurozone nations, the bloc’s outlook remained much more optimistic than the U.S. outlook.

While the advances in the Euro have slowed, the EUR/USD pair has continued to trend higher over the past week. EUR/USD pair climbed slightly from 1.1656 to 1.1778 last week. After U.S. Dollar attempted to recover, the pair EUR/USD saw a brief dip at the beginning of this week. However, the EUR/USD pair is eventually rising again as the U.S. dollar’s weakness persists. Whereas, the potential for advances in the currency pair was limited as coronavirus concerns rose on Sunday. The Euro remained broadly appealing overall. Throughout the coronavirus pandemic, the E.U. and the European Central Bank have handled the crisis well compared to other major economies like the U.K. & U.S.

As a result, Euro’s losses in response to a rebounding U.S. dollar have been limited. The Euro and U.S. dollar has a negative correlation, and the Euro often gains from the U.S. dollar weakness. It means that the rally of the EUR/USD pair is set to continue even a rise in worsening coronavirus cases’ concerns.

The Euro appeal was also down after Spain saw a surge in coronavirus cases, and speculations arose that the Eurozone could face fresh lockdowns in Spain to support the Eurozone economy. On the U.S. dollar front, the greenback attempted recovery earlier this week; however, the gloomy outlook persisted and kept investors from mounting much of a recovery rally in the currency.

The number of coronavirus cases in the United States has increased to its highest, and the U.S. government and Federal Reserve have only taken mixed action to limit the virus spread and protect the U.S. economy. Attempts to push further stimulus have been stuck in U.S. Congress, and Federal Reserve may become more dovish.

On the data front, at 12:15 GMT, the Spanish Services PMI fell short of expectations of 52.3 and came in as 51.9. The Italian Services PMI for July came in as 51.6 against the expectations of 51.6 and supported Euro.

At 12:50 GMT, the French Final Services PMI for July dropped to 57.3 against the expected 57.8 and weighed on Euro. At 12: 55 GMT, the German Final Services PMI dropped to 55.6 against the forecasted 56.7. The Final Services PMI for the whole bloc fell to 54.7against the forecasted 55.1and weighed on EURO.

Later today, eyes will remain on the Non-farm payrolls will extend clarity over the damage in the job market last month, and traders will eagerly await its release. Overall, economists expect a slight improvement in the U.S. unemployment rate from 11.1% to 10.5%, while the Average Hourly Earnings are expected to improve from -1.2% to -0.5%%. The NFP itself is expected to report 1530K (negative for a dollar) vs. 4800K figures beforehand.

Daily Technical Levels

Support Pivot Resistance
1.1802 1.1854 1.1915
1.1740 1.1968
1.1688 1.2029

EUR/USD– Trading Tip

The EUR/USD pair retraced lower to complete 38.2% Fibonacci retracement at 1.1817 level. On the higher side, the EUR/USD pair may find resistance at 1.1909 level, and the closing of candles below this level can keep bearish pressure on EUR/USD. A bullish breakout of this level can extend the buying trend until 1.2050. Today, the EUR/USD is likely to find support at 1.1800 level. Let’s keep an eye on NFP as it may drive sharp price action in the EUR/USD pair.


GBP/USD – Daily Analysis

The GBP/USD closed at 1.31133 after placing a high of 1.31614 and a low of 1.30528. The pound rose on Wednesday to remain on course for a third-straight weekly gain against the U.S. dollar and ignored weaker than expected economic data ahead of the Bank of England meeting on Thursday. Previously, the Final Services PMI in July came in as expected 56.5 points and indicated expansion in the services sector in the U.K.

This Thursday, the focus will be on the Bank of England’s monetary policy decision and Andrew bailey’s speech. England’s central bank is anticipated to keep interest rates unchanged but will roll out its forecasts on a range of economic measures, including Inflation, GDP, and unemployment. In recent weeks, debates have been under discussion about the BoE’s cutting of rates below zero, but Thursday’s meeting is unlikely to offer detailed insight.

The NIRP (Negative Interest Rate Policy) has been under active review at the Bank of England, but it seems like a little too early for the central bank to make any decisive move. Some analysts expect that the Bank of England will prefer to use a negative interest rate until the EU-UK relationship for 2021 gets cleared.

On the U.S. front, the ADP Non-Farm Employment Change dropped to 167K from the expected 1200K in July. It means that the U.S. government introduced 167K jobs only while that weighed on the U.S. dollar and added strength to the GBP/USD pair gains.

However, in July, the Final Services PMI rose to 50.0 from expected 49.6, and the ISM Non-Manufacturing PMI rose to 58.1 from expected 55.0. This showed an expansion in America’s services sector in July and supported the U.S. dollar that weighted on additional gains in GBP/USD pair.

Another reason for the rise in GBP/USD pair was the weakness of the U.S. dollar. The ever increasing numbers of coronavirus cases dampened the prospects for a swift economic recovery in the U.S. and forced investors to continue dumping the greenback. This, coupled with the delay in the U.S. fiscal stimulus package’s announcement and further pressurized the U.S. dollar.

The U.S. dollar was so under pressure that even the goodish rebound in the U.S. Treasury bond yields failed to support the U.S. dollar.

Apart from this, the rising number of coronavirus cases in the U.K. and the renewed fears of no-deal Brexit, as both sides were lagging in securing a deal, held investors to place any aggressive bullish position in the GBP/USD pair ahead of BoE monetary policy.

Daily Technical Levels

Support Pivot Resistance
1.3060 1.3111 1.3166
1.3005 1.3217
1.2954 1.3271

GBP/USD– Trading Tip

The GBP/USD consolidates at 1.3127 level, holding right above the double bottom support area of 1.3103 level while the bearish breakout of 1.3105 level can extend selling unto 1.3058 level. Recently as we can see in the chart above, the GBPUSD pair has violated the upward trendline, which supported the pair around 1.3130 level. At the same level, the 50 EMA was extending support, but the GBP/USD showed a bearish crossover, suggesting further odds of selling in the Cable. On the higher side, Sterling may find resistance at 1.3176. Let’s consider selling below 1.3105 level today. 

USD/JPY – Daily Analysis

A day before, the USD/JPY closed at 105.592 after placing a high of 105.871 and a low of 105.318. Overall the movement of the USD/JPY pair remained bearish throughout the day. The USD/JPY pair extended the decay on the back of the weaker U.S. dollar across the board and bank of Japan governor Kuroda’s speech telling that Japan’s economy will improve in the second half of the year.

The Bank of Japan Governor Haruhiko Kuroda warned that in order to contain the spread of public health measures were re-introduced, then the economic activity could be significantly constrained. He also affirmed that Japan was not slipping into deflation and that the central bank would continue with its efforts to achieve the inflation target of 2%. Kuroda again assured that the Bank of Japan would be ready to ramp up the monetary stimulus without hesitation if needed to aid the economy through the pandemic crisis.

Kuroda also said that Japan’s financial system was quite safe and stable and countered the fears that the banking sector would fall out from COVID-19. He also warned that there would be risks to Japan’s financial stability if pandemic prolonged longer than expected.

He said that Japanese and overseas economies would gradually improve from the second half of this year despite extremely high uncertainties. However, the pace of growth is expected to be moderate as the preventive measures to control the virus spread has its effects on economic activity.

On the other hand, the greenback was the worst performer in the currency market. It was so under pressure that it could not benefit from the latest round of economic data that showed an improvement in the Service Sector of the U.S. The rebound in the U.S. Treasury yield also could not support the U.S. dollar. The U.S. Dollar Index (DXY) was testing the 92.60 level lowest since last week.

On the data front, the ADP Non-Farm Employment Change showed that the U.S. created 167,000 jobs in July against the estimated 1200K. This weighed on the U.S. dollar and added further in the losses of the USD/JPY pair.

The Trade Balance from the U.S. fell in line with the expectations of -50.7B. The Final Services PMI rose to 50.0 points in July than the expectations of 49.6 and supported the U.S. dollar. At the same time, the ISM Non-Manufacturing PMI also rose to 58.1 points from the forecasted 55.0 and came in favor of the U.S. dollar.

However, USD bulls did not cheer the positive data, and the U.S. dollar remained under stress to post losses on the day. On the US-China front, China’s ambassador to Washington said that China did not want to see a Cold War break out between China and the U.S. He suggested that both countries need to work to repair their relations that were under extraordinary stress.

Daily Technical Levels

Support Pivot Resistance
105.3100 105.6000 105.8800
105.0300 106.1700
104.7400 106.4500

USD/JPY – Trading Tips

Technically, the USD/JPY hasn’t changed much as USD/JPY continues to consolidate at 105.680 with bearish sentiment, especially after violating the 38.2% Fibonacci support level of 105.650. On the lower side, the USD/JPY may find support at 105.078 level, which is extended by the 61.8% Fibonacci retracement level. A bearish breakout of 61.8% level can drive more selling until the next support area f 104.200. The current market price of USDJPY is staying below 50 EMA, which extends resistance at 105.650 level. Let’s consider selling below 105.650 level today. Good luck! 

Categories
Forex Signals

EUR/USD Dropped Below Mid-1.1800 – Combination Of Factors In Play! 

The EUR/USD currency pair had nothing to cheer on the day and dropped below the mid-1.1800 level. The E.U. digital nationalism concerns also added bearish pressure around the shared currency and contributed to the currency pair declines. Whereas, the currency pair failed to gain any strength from the upbeat Eurozone inflation data, which were released on Friday. At the moment, the EUR/USD currency pair is currently trading at 1.1755 and consolidating in the range between 1.1742 – 1.1797. However, the currency pair buyers seemed cautious to place any strong position ahead of the final German and Eurozone manufacturing PMI numbers for July, which is due on the day.

It is worth recalling that the annual Eurozone inflation figures came in at +0.4% in July, met the +0.2% expectations, and crossed +0.3% previous as per the Eurostat’s flash reading of Eurozone CPI report. In the meantime, the core figure rose to +1.2% in the reported month against +0.8% expectations and +0.8% previously. However, this positive data was unable to provide any support to the shared currency.

The losses in the currency pair were further bolstered by the concerns that the European Union’s digital protectionism will likely exacerbate Washington and Beijing, which kept the shared currency under pressure and contributed to the currency pair losses. France officials recently have taken aggressive action against U.S. tech companies for years while threatening to impose billions of euros in fines on Intel, Microsoft, Facebook, Google, Qualcomm, and Amazon. 

Apart from the EUR, the U.S. Congress failed to agree on the much-awaited extension of the unemployment claims benefits as they expired on Friday. Besides, the U.S. policymakers also could not agree over the much-awaited fiscal package to control the pandemic’s economic impacts, as Democrats and Republicans still have differences over the size of the package. This, in turn, made the S&P 500 Futures to mark 0.30% losses to 3,260. The same portrayed the market’s risk-off mood and gave extra strength to the safe-haven assets.

On the other hand, the risk-tone was further bolstered by the on-going tension between the United States and China. It is worth reporting that the U.S. President Donald Trump released notification to ban the Chinese video app TikTok in the United States. Whereas, the Secretary of State Michael Pompeo also followed President Donald Trump’s footsteps while saying that the U.S. will take action shortly on Chinese software companies that are providing data directly to the Chinese government, which caused the risk to U.S. national security. These newer to newer tensions between US-China could harm the trade deal. 

At the coronavirus front, the increasing pandemic numbers from the U.S., Australia India, and Brazil continued to exert downside pressure on the risk sentiment. As per the latest report, Australia’s Victoria has recently been given the “state of disaster” title after cases rose past-670 during the weekend. On the other hand, Tokyo reported 292 new coronavirus infections on Sunday, after cases increased by more than 400 in the past two days.

 The market players will keep their eyes on early-month activity numbers from China and the U.S. As well as, the final German and Eurozone manufacturing PMI numbers for July will be key to watch. Moreover, the USD price moves and coronavirus headlines will play a key role in determining the intraday momentum.


The EUR/USD fell sharply from 1.1908 level to test the double bottom support level of 1.1745 level. On the hourly timeframe, the EUR/USD extends to form neutral candles, which suggests indecision among investors despite a strong support level of 1.1745. On the higher side, the EUR.USD may find support at 1.1796 level. 

Entry Price – Sell 1.17262

Stop Loss – 1.17662

Take Profit – 1.16862

Risk to Reward – 1:1

Profit & Loss Per Standard Lot = -$400/ +$400

Profit & Loss Per Micro Lot = -$40/ +$40

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368

Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

Categories
Forex Market Analysis

Daily F.X. Analysis, July 30 – Top Trade Setups In Forex – GDP Figures In Focus 

Later today, the focus will remain on the German Prelim GDP and Advance GDP figures from the U.S. both of the events are expected to perform worse than before as the data represents the lock-down period’s economic activity. So most of it is already priced in. However, the U.S. Jobless claims will remain in the highlights. Jobless Claims figures are expected to rise again, perhaps due to the second wave of COVID19 in the U.S.

Economic Events to Watch Today  

    


EUR/USD – Daily Analysis

TheEUR/USD pair was closed at 1.17897 after placing a high of 1.18061 and a low of 1.17124. Overall the movement of the EUR/USD pair remained bullish throughout the day. EUR/USD pair rose above the 1.180 level on Wednesday amid the Federal Reserve’s decision to keep the rates unchanged at 0.0%-0.25%.

The concerning picture painted by the Federal Reserve about the resurgence of COVID-19 that was already hurting consumption and jobs weighed more on the U.S. dollar. According to Fed Chair Jerome Powell, Fed showed full commitment to use all of its powers and tools to support the economy. He also said that economic development was highly dependent on the coronavirus, and the rates will remain near zero until the economy improves towards recovery.

The Fed’s decision and a statement from Fed’s Chair Powell further weighed on the U.S. dollar that was already under pressure from the past few days. The U.S. Dollar Index fell 0.44% to 93.17, the lowest level since June 2018. The fall of the U.S. dollar below two years lowest level helped the EUR/USD pair to post gains.

The greenback has suffered on expectations that the Fed will continue its ultra-loose monetary policy for years to come and speculate that it will allow inflation to run higher than it has previously indicated before raising interest rates. This all came as the U.S. was facing a continuous rise in coronavirus cases as U.S. deaths from virus surpassed 150,000 on Wednesday, a number higher than all countries and nearly a quarter of the world’s total numbers.

The pair EUR/USD rose above 1.180 level amid the fresh weakness of the U.S. dollar. However, the European side’s macroeconomic data also helped the EUR/USD pair in sustaining its gains.

At 11:00 GMT, the German Import Prices for June rose to 0.6% against the expected 0.5% and supported Euro that added in the upward trend of currency pair.

Furthermore, the Executive of the European Union said on Wednesday that it had agreed to buy a limited supply of the COVID-19 medicine redeliver from the U.S. drugmaker Gilead to address Europe’s short-term needs patients. They also hoped to be able to order more later.

The E.U. Commission agreed to pay about 63 million euros to buy enough doses to treat about 30,000 patients. The anti-viral is the only drug so far authorized in the E.U. to treat patients with the virus’s severe symptoms. However, nearly all available supplies have already been bought by the U.S.

Daily Technical Levels

Support Pivot Resistance
1.17 1.18 1.18
1.17 1.19
1.16 1.19

 

EUR/USD– Trading Tip

The technical side of the EUR/USD remains mostly the same as it’s trading at 1.1770 level, holding above resistance become support level of 1.1755. On the hourly timeframe, the EUR/USD continues to form higher high and higher low pattern suggestings odds of bullish trend continuation. A bearish breakout of 1.1755 can drive more selling until 1.1702 level. On the higher side, the resistance can stay at 1.1788 and 1.1880.


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29953 after placing a high of 1.30132 and a low of 1.29118. Overall the movement of GBP/USD pair remained bullish throughout the day. The GBP/USD pair rose for the 9th consecutive day and maintained its bullish streak and crossed the 1.30 level. The currency pair rose to its multi-months’ highest level since the first week of March amid the broad-based U.S. dollar weakness.

The U.S. dollar struggled against the six major currencies and dropped to 2 year’s lowest level at 93.17 on Wednesday after the announcement of an interest rate decision by Federal Reserve. Fed kept its rates unchanged near zero and vowed to keep them at the same level until the economy shows improvement.

 Furthermore, the Fed Chair Jerome Powell said that the current economic downturn was severe, and continued fiscal and monetary support will be necessary for recovery. He added that the Fed would remain committed to using its full range of tools to support the economy.

The rising number of coronavirus cases in the U.S. has weighed on America’s economy and the U.S. dollar. Traders have become more concerned that the world’s top economy could be headed for a severe contraction this year.

The death toll in the U.S. reached 150,000 on Wednesday, and it raised the concerns that the economy will take a long time to recover that weighed further on the U.S. dollar. The weak U.S. dollar gave a push to GBP/SUSD pair’s prices above 1.200 level.

On the British Pound front, the Pound rose today after U.K. Mortgage Approvals & Net Lending to Individuals. At 13:30 GMT, the M4 Money Supply by the U.K. for June dropped to 1.0% from the expected 2.2%. The Mortgage Approvals improved to 40K from the projected 35K in June, and the Net Lending to Individuals in June also rose to 1.8B from the expected -0.4B and supported Sterling.

Better than expected macroeconomic data from the U.K. gave strength to British Pound and helped GBP/USD pair to post gains on Wednesday.

Meanwhile, Brexit has remained in focus this week after the London School of Economics warned that both Brexit and the Covid-19 pandemic could severely compromise the U.K. economy.

The U.K. was close to securing a continuity trade deal with Japan that will mirror that of the E.U. pact that Britain will no longer be a part of next January. Both sides are seeking to secure a continuous trade deal once Brexit implemented on January 1.

On Thursday, U.S. dollar investors will be looking ahead for the US GDP figure for the second quarter that is expected to fall by -34.1%; any figure closer to it will be good for the U.S. dollar. The investors will also await the release of the latest U.S. Initial Jobless Claims for July.

However, most people will likely prefer not to invest in the U.S. dollar because of increased external and domestic pressure on American’s economy.

Daily Technical Levels

Support Pivot Resistance
1.2863 1.2908 1.2978
1.2792 1.3024
1.2747 1.3094

GBP/USD– Trading Tip

The GBP/USD is also forming a higher high and higher low pattern, which suggests odds of a bullish trend in the GBP/USD pair. The Cable is likely to find support at 1.2970, which is extended by the upward trendline on the hourly timeframe. Above this, the next resistance can be found around 1.30095, along with support at 1.2970 and 1.2945.


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.920 after placing a high of 105.241 and a low of 104.771. Overall the movement of the USD/JPY pair remained bearish throughout the day. On Wednesday, USD/JPY pair continued its bearish streak for the 5th day and fell below 105.00 level amid Fed’s decision to keep interest rates near zero.

Federal Reserve Chairman Jerome Powell warned the U.S. faced the most severe economic downturn and said that the economy’s path was extraordinarily uncertain. He said that the increased number of virus cases and the renewed measures to control it have started to weigh on recent weeks’ economic activity. Powell also said that recovery would need help from both fiscal and monetary policy.

The Federal Reserve vowed to keep the rates unchanged as the pandemic still persists and poses considerable economic outlook risks. The rates will remain near zero until the economy was on track to achieve its maximum employment and price stability goals. The U.S. dollar came under renewed pressure after releasing the monetary policy statement and interest rate decision and caused the USD/JPY pair to drop below 105.00 level.

Despite better than expected U.S. macro-economic data, the U.S. dollar remained under pressure and continues to post losses on the day.

At 17:30 GMT, the Goods Trade Balance for June showed a deficit of 70.6B against the expected deficit of 75.5B and supported the U.S. dollar. The Prelim Wholesale Inventories came in as -2.0% against the expected -0.4% and supported the U.S. dollar. At 19:00 GMT, the Pending Home Sales for June increased to 16.6% against the expected 15.6%and supported the U.S. dollar. The U.S. Dollar index fell to its two years lowest level on 93.17, and the U.S. Treasury yields were little changed with a 10-year note holding below 0.60%.

Meanwhile, President Trump said on Wednesday that his administration was allowing for banning the Chinese-owned social media giant TikTok on the back of fears that it could be weaponized to spy Americans.

The U.S. Treasury Secretary Steven Mnuchin also backed this comment and said that Committee on Foreign Investment in the U.S. was also studying the app’s national security risk. He added that TikTok was under serious evaluation, and by this week, a recommendation will be made to the president regarding the app.

On coronavirus front, the U.S. coronavirus fatalities exceeded 150,000 as seven states, including California and Florida, broke new daily death records. Fears for the potential growth of the infections increased in the Midwest area, including Indiana, Colorado, Ohio, and Wisconsin, because of the fast spread of the virus in the U.S.

Early on Thursday, Japan will publish Retail Trade data that is expected to fell by 6.5% compared to the earlier year. The U.S. investors will look forward to GDP data for the second quarter.

Daily Technical Levels

Support Pivot Resistance
104.80 105.25 105.55
104.50 106.00
104.05 106.30

USD/JPY – Trading Tips

The USD/JPY trades with a selling bias around 105.526 level, trading within a downward channel that immediately generates resistance at 106.120. On the lower side, the USD/JPY may find support at 105.375 level, and closing of candles below 105.375 can open further selling bias until 104.850. Overall the pair is forming lowers low and lowers high pattern, which signifies selling sentiment among traders. The RSI and MACD suggest selling signals; for instance, the RSI is holding below 50, and the MACD is staying below 0. Today, let’s look for buying trade above 105.200. Good luck! 

Categories
Forex Signals

Overbought EUR/USD Under Pressure – Brace for Retracement! 

The EUR/USD failed to continue its early-day strong bids and dropped to 1.1711 level even after the upbeat German data showed that the export expectations for Europe’s economic powerhouse improved sharply in July re-opening of economies. However, the reason for the losses in currency pair could also be attributed to the broad-based U.S. dollar strength, triggered by geopolitical tensions and hopes that policymakers were close to a result over the next U.S. fiscal stimulus package, which contributed to the currency pair gains. At the moment, the EUR/USD currency pair is currently trading at 1.1710 and consolidating in the range between 1.1708 – 1.1774. 

However, the currency pair buyers seemed cautious to place any strong position ahead of the C.B. Consumer Confidence, which is due to release on the day. It is worth recalling that the “Export expectations in Europe’s largest economy rose to 6.9 points in July from -2.2 the previous month.”

At the US-China front, the tussle between the US-China got an additional burden after China ordered the closure of the U.S. office in Chengdu, a tit-for-tat reply for the United States’ previous move over the Chinese office closure in Houston. In the meantime, the U.S. is increasing its aerial surveillance over the South China Sea to a record level to keep watch on China. 

As per the keyword, “Spy planes from the U.S. navy, air force and army are involved in an apparent three-pronged drive to track Chinese submarines and monitor activity by the People’s Liberation Army (PLA), which has redoubled training for operations aimed at Taiwan”. Further added, “In Beijing, procurement documents from the China State Shipbuilding Corporation have revealed plans to build an amphibious assault ship ideal for island invasion”. However, these statements instantly escalated tensions between both countries.

At the coronavirus front, the latest number of coronavirus infections has crossed almost 16.30 million, whereas more than 650,000 people have died globally, as per the Johns Hopkins University. Whereas, the California coronavirus cases increased by at least 10,549 on Monday to 463,439 total, which now crossed the record of Massachusetts in total COVID-19 deaths. Australia’s no. 2 populous states of Victoria also reported 384 new cases on the day vs. 532 previous day’s surge. In contrast, New Zealand has reported zero cases of Covid-19 for the 3rd-day in a row. 

Despite all these concerns, the equity market flashed green, possibly due to optimism over a potential vaccine for the COVID-19. The reason for the risk-on market sentiment could also be attributed to the hopes of the U.S. $1 trillion packages. The U.S. Senate Republicans introduced a $1 trillion COVID-19 aid package that would include $1,200 payments to U.S. citizens, as well as incentives for the manufacturing of personal protective equipment in the United States rather than importing them from China. This package also included $190 billion in loans for small businesses and $100 billion in loans to businesses that operate seasonally or in low-income areas. However, these hopes kept the equity market positive on the day.

As in result, the broad-based U.S. dollar erased its early-day deeper losses and edged higher, at least for now. However, the gains in the U.S. dollar could be short-lived or temporary due to the worries that the economic recovery in the U.S. could be stopped in the wake of the resurgence in coronavirus cases. However, the gains in the U.S. dollar kept the EUR/USD currency pair under pressure. 


The EUR/USD is trading at 1.1728 level, holding above resistance to become a support level of 1.1715. On the hourly timeframe, the EUR/USD was previously forming highers high and highers low pattern, but now the recent cycle seems to change the trend. A bearish breakout of 1.1715 can drive more sales until the 1.1683 level. On the higher side, the resistance can stay at 1.1780. Checkout a trading plan below…

Entry Price – Sell 1.17305

Stop Loss – 1.17705

Take Profit – 1.16905

Risk to Reward – 1:1

Profit & Loss Per Standard Lot = -$400/ +$400

Profit & Loss Per Micro Lot = -$40/ +$40

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368

Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

Categories
Forex Signals

Overbought EUR/USD Ready for Bearish Correction – Quick Trading Signal! 

The EUR/USD pair was closed at 1.16543 after placing a high of 1.16579 and a low of 1.15810. The EUR/USD pair extended its 6th-day bullish rally and rose above 1.16500 level on Friday amid the broad-based U.S. dollar weakness. 

The declines in greenback boosted the currency pair EUR/USD as the marginal gains in the U.S. dollar failed to retain their position. Moving on, the German IFO survey for June is scheduled to release later today at 0800 GMT. The headline IFO Business Climate Index is seen improving to 89.3 versus 86.2 previously.

From the forecasted view, the Current Assessment sub-index will likely reach 85.0 this month, while the IFO Expectations Index – indicated firms’ projections for the next six months – is likely to come in at 93.7 in the reported month vs. 91.4 last.

While introducing the German business sentiment index, this data is normally released by the CESifo Group, which is closely followed as an early indicator of Germany’s current conditions and business expectations. However, the Institute surveys more than 7,000 enterprises to assess the business situation and their short-term planning. The positive economic growth is seen as bullish movements for the shared currency; likewise, low figures are considered as negative (or bearish).

Investors will be will keeping their focus on the USD price dynamics and coronavirus headlines, which could play a key role in influencing the intraday momentum for the gold. The Durable Good Orders release and German IFO survey for June will be key to watch. Additionally, the U.S. stimulus progress will be closely observed ahead of the U.S. Federal Reserve (Fed) monetary policy decision, which is due to happen on Wednesday.


The EUR/USD traded sharply bullish amid weaker dollar to trade at 1.1704 level, and closing below 1.1730 resistance level can trigger selling until 1.1685 level today. On the lower side, the pair may gain support at 1.1686 level. A bullish breakout of the 1.1730 level can extend the buying trend until the 1.1788 level. While the violation of 1.1685 can lead to EURUSD prices towards 1.1589 level. Check out the trade plan below… 

Entry Price – Sell 1.17056

Stop Loss – 1.17456

Take Profit – 1.16656

Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400

Profit & Loss Per Micro Lot = -$40/ +$40

Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.

iPhone Users: https://apps.apple.com/es/app/fasignals/id1521281368

Andriod Users: https://play.google.com/store/apps/details?id=academy.forex.thesignal&hl=en_US

Categories
Forex Market Analysis

Daily F.X. Analysis, July 27 – Top Trade Setups In Forex – U.S. Durable Goods In Hightlights! 

On the news side, eyes will remain on the German Business Climate, and the U.S. durable good as these have the potential to drive movement in the market gold and US-related pairs. Check out the trading plans below.

Economic Events to Watch Today  



    


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.16543 after placing a high of 1.16579 and a low of 1.15810. The EUR/USD pair extended its 6th-day bullish rally and rose above 1.16500 level on Friday amid the broad-based U.S. dollar weakness. The declines in greenback boosted the currency pair EUR/USD as the marginal gains in the U.S. dollar failed to retain their position.

The U.S. Dollar Index raised to 94.80 level but turned to the downside after dropping to 94.40 level, the lowest since September 2018. The U.S. dollar currency was unable to stabilize as its weakness remained in place.

The main driver behind Friday’s rally in the EUR/USD pair was the U.S. dollar’s weakness. However, the economic data also supported this upside movement in currency pair.

At, 12:15 GMT, the French Flash Services PMI for July rose to 57.8 against the expectations of 52.3 and supported EUR. The French Flash Manufacturing PMI for July dropped to 52.0 from the projected 53.1. At12:30 GM, the German Flash Manufacturing PMI raised to 50.0 from the 48.0 of expectations, and Flash Services PMI also raised to 56.7 from the anticipated 50.4.

At 13:00 GMT, the Flash Manufacturing PMI for whole bloc also rose to 51.1 from the anticipated 50.0, and the Flash Services PMI for whole bloc reached 55.1 in July from the expected 51.0. At 17:55 GMT, the Belgian NBB Business Climate dropped by 13.9 points against the expected drop by 14.3 points, and it also supported Euro as the business climate showed improvement.

On the flip side, the Flash Manufacturing PMI from the U.S. was released at 18:45 GMT. The figure dropped to 51.3 from the anticipated 52.0. The Flash Services PMI from the U.S. also declined to 49.6 from the expected 51.0 in July. The better than expected PMI data from Europe indicated that manufacturing and services activities were improved in Europe, giving strength to EUR. Whereas, the poor than expected data from the U.S. weakened the U.S. dollar when its PMI dropped in July.

The better economic condition and business climate of the European Union could be attributed to the latest approval of a massive stimulus package by the European Union. And the U.S.’s poor economic condition indicated that the U.S. was still suffering and struggling against coronavirus.

The U.S. marked the second day with 70,000 plus new cases of coronavirus and deaths more than 1000 in 24 hours on Saturday. The total number of infections in the U.S. reached 4.1 M, and the fatalities reached 145,324.

The mounting numbers in infected people will likely weigh on the U.S. economy and its currency for a longer period, and the weakness in gold is likely to remain persistent. So, another rally in EUR/USD on Monday is expected unless news suggested otherwise.

Daily Technical Levels

Support Resistance

1.1640     1.1659

1.1629     1.1667

1.1621     1.1678

Pivot point: 1.1648

EUR/USD– Trading Tip

The EUR/USD traded sharply bullish amid weaker dollar to trade at 1.1704 level, and closing below 1.1730 resistance level can trigger selling until 1.1685 level today. On the lower side, the pair may gain support at 1.1686 level. A bullish breakout of the 1.1730 level can extend the buying trend until the 1.1788 level. While the violation of 1.1685 can lead to EURUSD prices towards 1.1589 level. 


GBP/USD – Daily Analysis

The GBP/USD closed at 1.27945 after placing a high of 1.28034 and a low of1.27168. Besides, the trading of the GBP/USD pair remained bullish throughout the day. The GBP/USD pair gained on Friday and extended its bullish streak of the 6th consecutive day on Friday amid better than expected U.K. data and broad-based U.S. dollar weakness.

Despite U.K. data coming in favor of local currency, the other factor involved in the rally of GBP/USD pair was the U.S. dollar’s weakness. The greenback has failed to recover as U.S. yields were low and looking for support. Since March, the U.S. Dollar Index fell and posted the fifth weekly decline in a row with the worst performance. The index dropped below 94.5 level that is lowest since September 2018.

Sterling was high on the board as the macroeconomic data related to PMI for July from the U.K. rose from expectations. AT 13:30 GMT, the Flash manufacturing PMI for July rose to 53.6 against the expectations of 52.0 and supported GBP. The Flash Services PMI for July also raised to 56.6 from the expected 51.4 and supported GBP. At 11:00 GMT, the Retail Sales from the U.K. was raised by 13.9% from the expected 8.3% and supported GBP. The better than expected PMI and Retail Sales data from Great Britain helped GBP/USD to post gains and trade higher.

The U.S. Manufacturing PMI dropped to 51.3 from the expected 52.0, and the Flash Services PMI from the U.S. also dropped to 49.6 from the expected 51.0 in July. This added in the U.S. dollar weakness on board and supported the gains in GBP/USD pair on Friday.

Meanwhile, the U.S. dollar weakness was further bolstered by the rising coronavirus cases across the states. The U.S. marked the second day with 70,000 plus new instances of coronavirus and deaths more than 1000 in 24 hours on Saturday. The total number of infections in the U.S. touched 4.1 M, and the death toll reached 145,324.

The hopes that the U.S. economy will take a long period to recover from the coronavirus crisis as it hit hardest the U.S. States kept weighing on the U.S. dollar. The U.S. Dollar drops across the board pushed the pair above the 1.2800 level, and analysts believe that if the dollar’s weakness remained still, the GBP/USD pair could reach the 1.3000 level.

The British Pound was also backed by the decreasing number of coronavirus cases in the U.K. It means that restrictions will be gradually removed, and these hopes supported Pound.

On Brexit front, the latest round of negotiations ended on Thursday without significant progress on the post-Brexit trade deal. Britain’s chief Brexit negotiator David Frost said that they would not reach a preliminary agreement by the UK PM Boris Johnson’s July deadline. However, although the expectations for striking a deal are very less, it could not lose attention. Next week, the Brexit talks, U.S. stimulus package, and the infection cases in the U.S. will be key to watch.

Daily Technical Levels

Support Resistance

1.2782      1.2803

1.2771      1.2813

1.2762      1.2824

Pivot point:1.2792

GBP/USD– Trading Tip

The GBPUSD is also trading in an overbought region, and now it can drop until 1.2825 level, which marks 23.6% Fibonacci retracement below this the next support will be found around 1.2770. At the same time, resistance stays at 1.2860 and 1.2930. The RSI and MACD are in the bullish region, but they are forming smaller histograms that suggest odds of selling bias. Let’s consider taking buying trade over 1.2760 until 1.2860 level today.  


USD/JPY – Daily Analysis

The USD/JPY was closed at 106.124 after placing a high of 106.902 and a low of 105.679. The USD/JPY pair extended its bearish streak for the second day towards the lowest of 2 years amid broad-based U.S. dollar weakness. The strong bearish pressure on the day came in after the souring market sentiment that helped JPY gather strength as a safe haven. The currency pair dropped below 106 level and extended its slide and reached its lowest since mid-March at 105.67.

The risk-averse market sentiment was boosted by the escalating tensions between the U.S. & China. Last week the U.S. sent a short notice to China to halt its consulate in Houston. In retaliation, China closed the U.S. consulate in Chengdu, and the tensions between the U.S. & China escalated. Besides, U.S. Secretary of State Michael Pompeo asked for an end of “engagement,” a policy that has defined US-China relations for nearly five decades. The policy is considered as the most important foreign policy achievement by China in recent history.

The safe-haven Japanese yen gained traction due to its safe-haven status, causing the USD/JPY pair to move in a downward direction. The U.S. Dollar Index dropped by 0.36% to its lowest level since September 2018 at 94.41 level and made the greenback weak across the board. The weak U.S. dollar weighed on the USD/JPY pair and pushed the pair to its two years lowest level.

Furthermore, the macroeconomic data released on Friday also weighed on the USD/JPY pair when Flash Manufacturing PMI from the U.S. dropped to 51.3 level from the anticipated 52.0 in July. The Flash Services PMI also fell to 49.6 level from the projected 51.0 and weighed on the U.S. dollar. At 19:00 GMT, the New Home Sales in June from the U.S. increased to 776K from the expected 700K.

The decreased PMI data from the U.S. could be attributed to the increased number of coronavirus cases from across the U.S. On Saturday, the U.S. marked the second day with 70,000 plus new instances of coronavirus and deaths more than 1000 in 24 hours. The total number of infections in the U.S. rose to 4.1 M, and the death number reached 145,324.

Next week, the FOMC meeting will remain dovish, and the scope for U.S. Dollars will remain on the downside. This will make investors to short USD positions that will cause further decline in the USD/JPY pair.

Daily Technical Levels

Support Resistance

105.85     106.19

105.70     106.36

105.52     106.52

Pivot Point: 106.03

 USD/JPY – Trading Tips

The USD/JPY trades with a selling bias around 105.526 level, trading within a downward channel that provides an immediate resistance at 106.120. On the lower side, the USD/JPY may find support at 105.375 level, and closing of candles below 105.375 can open further selling bias until 104.850. Overall the pair is forming lowers low and lowers high pattern, which signifies selling sentiment among traders. The RSI and MACD suggest selling signals; for instance, the RSI is holding below 50, and the MACD is staying below 104.866. Today, let’s look for sell trade below 105.800. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, July 21 – Top Trade Setups In Forex – Weaker Dollar Sentiment! 

The U.S. dollar continued to struggle because of the previous week’s latest U.S. consumer confidence data release. The less consumer confidence over the U.S. economy weighed on the greenback as the economy struggles to overcome the coronavirus situation. Today, the market is likely to focus on the Canadian retail sales figures, but these may not have any impact on gold and other currency pairs. Technical levels will matter today.

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD was closed at 1.14473 after placing a high of 1.14676 and a low of 1.14022. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD exchange rate extended its gains on Monday and reached the highest level since March 9. The Euro rose against many rival currencies on hopes over a crucial milestone as the Eurozone’s governments showed consensus on a COVID-19 recovery fund. Although lower than the initial proposal of 500 billion euros in grants, the new agreed grant is now 390 billion euros, which is still a significant boost for the Eurozone’s struggling economy. 

On Monday, the European Council President Charles Michel said that he was confident a deal on the bloc’s coronavirus recovery package could be reached after putting forward a new proposal. The latest proposal offered by him provided significant concessions to the so-called frugal four countries, Austria, Denmark, Netherlands, and Sweden. In the new proposal fund, the grants were decreased to 390 Billion euros from the initial 500 billion euros, and the Loans became 360 Billion Euros from 250 billion euros.

In Eurozone economic data, Germany’s Producer Price Index for June fell below consensus at 0% and weighed on single currency Euro. As a result of EUR/USD, pair investors became increasingly concerned about the Euro zone’s largest economy’s ability to recover from the COVID-19 crisis.

On the U.S. front, the U.S. dollar continued to struggle because of the previous week’s latest U.S. consumer confidence data release. The less consumer confidence over the U.S. economy weighed on the greenback as the economy struggles to overcome the coronavirus situation.

Furthermore, the U.S. Congress was set to announce a new stimulus measure as the previous unemployment benefits package will expire at the end of July. The U.S. dollar remained weak because of the investors were looking ahead of the Congress announcement. The weak U.S. dollar added gains in the EUR/USD pair on Monday.

The next day, the U.S. investors will be looking ahead to the release of June’s Chicago Fed National Activity Index. Any improvement in the index will indicate better economic conditions and would prove positive for the U.S. dollar. The single currency euro will continue to be driven by the news surrounding the European Summit’s discussions on the COvid-19 recovery fund. The euro investors will also await Luis De Guindos, the Vice President of the ECB. Any dovish comments from ECB would cut the Euro gains.

Daily Technical Levels

Support Resistance

1.1410     1.1477

1.1372     1.1506

1.1342     1.1544

Pivot point: 1.1439

EUR/USD– Trading Tip

The EUR/USD continues to follow the same technical outlook as before. It has tested the double top resistance at 1.1446 level, and now it’s finding support at 1.1410 level. The upward trendline on the hourly chart is also likely to support the pair around 1.1375 level. Chances of bullish trend seem solid today. Therefore, the bullish breakout of the 1.1445 level can lead the EUR/USD prices towards the 1.1490 level.


GBP/USD – Daily Analysis

The GBP/USD pair closed at 1.26611 after placing a high of 1.26652 and a low of 1.25180. Overall the movement of GBP/USD pair remained strongly bullish throughout the day. The GBP/USD posted its biggest daily gains since June 30 on Monday and recovered all of its previous five day’s losses on the back of positive comments from England’s FPC and JP Morgan.

Cable found its foot against the U.S. dollar on Monday after the JPMorgan Bank said that the UK was the largest capital importer within G10. The Bank added that as the Brexit process was heading to an end of the transition period, the Cable was becoming rather less dependent on general risk sentiment and started to decouple from other high-beta currencies.

The rise in Sterling was further supported by the latest comments from Jonathan Hall, an appointee to the Bank of England’s Financial Policy Committee (FPC) on Monday. According to him, Brexit will make markets less efficient, but it will not be disastrous for Britain’s economy.

Hall said that Brexit would cause fragmentation, inefficiency, and problems with regulations, but it will not be disastrous.

Meanwhile, on Monday, the Bank of England policymaker Silvana Tenreyro said that Britain might avoid an economically damaging loss of skills in its labor market as long as the rise in unemployment does not drag on.

Tenreyro said that uncertainty persisted in the economy related to COVID-19 and that the crisis may even have led some workers to upskill to adapt to new ways of working remotely. She added that as long as the current period of high unemployment remains temporary, the loss in skills would be only limited.

In contrast to this, the Bank of England economist Andy Haldane warned inflation could be a problem after the coronavirus crisis. He insisted that Britain was enjoying a V-shaped recovery and was in the middle of a quick turnaround as the economy recovered about half of the immense fall in output in March & April when the crisis was most intense. Haldane told that the economy had been growing on an average of about 1% a week since May.

The upbeat comments from all the sides surrounding Britain gave a massive push to the GBP/USD prices on Monday. Adding in the currency pair’s gains was the U.S. dollar weakness backed by the increasing number of infected cases in the U.S. U.S. reported a record-high number of infected cases in past days with death tolls crossed 140,000, and the total number of COVID-19 cases reached 3.8 Million.

On the data front, there was no macroeconomic data to be released on the day, and hence, the pair’s movement was followed by the comments related to the U.K. economy and coronavirus headlines.

Daily Technical Levels

Support Resistance

1.2564     1.2713

1.2466     1.2764

1.2415     1.2861

Pivot Point: 1.2615

GBP/USD– Trading Tip

The GBPUSD has violated the triple top resistance level at 1.2660 level, and bullish crossover of this level opens further room for buying until 1.2729, but before this, the Sterling can retrace until 23.6% Fibo level of 1.2645 level. Below this, the next support can be found at the 1.2625 level. Above 1.2625, the GBP/USD can be showing a buying trend. Let’s consider taking buy trades over 1.2615 level today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.270 after placing a high of 107.541 and a low of 106.999. Overall the movement of the USD/JPY pair remained bullish throughout the day. The USD/JPY pair rose to 8 days the highest level on Monday on the back of Japan’s risk sliding back into deflation and the rising numbers of coronavirus cases in the U.S.

Bank of Japan released its minutes of June meeting in which the policymakers debated at the risk of the country sliding back into deflation but stopped short of supporting stronger steps to prevent companies from going bankrupt due to coronavirus pandemic.

More companies were facing the risk of insolvency with the impact of coronavirus pandemic likely to last for a prolonged period of time, even if the companies receive immediate liquidity support. But the members of BOJ differentiate on the opinion of injecting capital into firms to help recover and prevent insolvency.

Some members insisted that injected direct capital to save the struggling firms is an action that should come from the government, and few members said that it was the role of BOJ to provide liquidity and also to cooperate with the government while clarifying the respective role.

The Bank of Japan kept its interest rates unchanged in June after easing monetary policy in March and April. Minutes revealed that the Bank maintained its view over the economy as it will gradually recover from the pandemic’s damage.

However, many members showed concern as the pandemic was picking its pace once again. Japan lifted its lockdown measures in late May, and Tokyo has seen a renewed spike in infections lately. Japan has reported over 25,000 cases, including 1,000 deaths. The downbeat comments from the latest issued meeting minutes by Bank of japan pushed the USD/JPY pair higher on Monday.

On greenback front, the currency was down on Monday as the U.S. Dollar Index decreased by 0.6% to 95.85 level. The currency was suffering from its economy’s struggle to fight the coronavirus crisis as the nation was leading in reporting infected cases worldwide.

U.S. figures related to infected people raised to 3.8 Million, and death toll count reached 140,000 making the U.S. the most affected economy by the pandemic. Despite the safe-haven status of U.S. dollar investors, they were getting out of it due to the U.S. economy’s gloomy outlook.

The rising number of cases urged some states to introduce renewed lockdown measures that weighed on economic recovery hopes, and hence, the U.S. dollar became weak. However, the weak U.S. dollar failed to turn USD/JPY’s gains on Monday.

Daily Technical Levels

Support Resistance

106.99     107.51

106.74     107.78

106.47     108.03

Pivot point: 107.26

 USD/JPY – Trading Tips

The USD/JPY is consolidating in a broad trading range of 107.400 – 107, while the overall bias seems neutral at 107.191. The USD/JPY pair has recently crossed over 50 EMA, which extended resistance at 107 level, including now the same level will work as a support. The bearish breakout of the 107 level can extend the selling trend until 106.580. Simultaneously, the bullish breakout of the 107.400 level can extend the buying trend until 107.600. The MACD and RSI support bearish bias, and we may take a selling trade below 107 and buying above the same level today. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, July 20 – Top Trade Setups In Forex – E.U. Economic Summit Ahead