Tag: EURUSD

The fundamental side of the market continues to be muted due to a lack of economic events. Therefore, we still need to keep an eye on COVID19 updates, U.S. China trade war issues, and today’s technical levels.

Economic Events to Watch Today  

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17626 after placing a high of 1.17966 and a low of 1.16956. Overall the movement of the EUR/USD pair remained flat yet bearish throughout the day. The EUR/USD exchange rate fell by -0.2% on Monday as Euro failed to gain against the U.S. dollar despite stronger than expected Eurozone Manufacturing PMI for July but did not remain there and reverted to the same level it started its day with. Investors have become more hopeful that the Eurozone’s economy could be on the road to recovery as Manufacturing PMI showed an expansion in the industry throughout Europe.

The Eurozone economy showed a positive start to the third quarter, with production growing at the fastest rate for over two years fueled by an encouraging surge in demand. The growth of new orders outperformed the production and hinted that August would see further output gains. The business confidence has also been restored due to the improvement in the order book. However, Euro traders were cautious on Monday as the number of coronavirus cases continues to grow throughout Europe. Consequently, markets became cautious that the second wave of the virus could severely compromise the bloc’s economy.

On the data front, at 12:15 GMT, the Spanish Manufacturing PMI for July exceeded the expectations of 52.6 and came in as 53.5 to support single currency Euro. At 12:45 GMT, the Italian Manufacturing PMI for July rose to 51.9 from the expected 51.3 and supported Euro. At 12:55 GMT, The French Final Manufacturing PMI also exceeded the expectations of 52.0 and rose to 52.4 and supported Euro. At 12:55 GMT, the German Final Manufacturing PMI for July was expected to release as 50.0 but came in as 51.0 and supported Euro. At 13:00 GMT, the Final Manufacturing PMI from the whole bloc also rose to 51.8 points against the forecasted 51.1 and supported single currency Euro.

All data related to PMI from main European countries came in favor of EUR/USD and pushed it to the high near 1.1770 but failed to reverse the pair’s direction as the market sentiment was against EUR/USD pair.

On the other hand, from the U.S. side, the final Manufacturing PMI came in short of expectations of 51.3 as 50.9 and weighed on the U.S. dollar. It indicated that manufacturing activity in the U.S. in July was not very impressive as it was expected.

However, at 19:00 GMT, the ISM Manufacturing PMI came in favor of the U.S. dollar when it exceeded the expectations of 53.6 and came in as 54.2. It showed that manufacturing activity in the U.S. was expanded in July. As the ISM Manufacturing PMI was the highlighted data of the day, and as it came in favor of the U.S. dollar, the U.S. dollar gained traction and caused a decline in the prices of EUR/USD pair. 

Daily Technical Levels

EUR/USD– Trading Tip

The EUR/USD has bounced off the previously suggested support level of 1.1708 level, and now it’s trading at 1.1765 area. On the hourly timeframe, the EUR/USD continues to form bullish candles, which suggest a slight bullish bias among investors despite profit-taking in the U.S. dollar. Now strong support stays at 1.1705. On the higher side, the EUR/USD may find support at 1.1796 level.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.30756 after placing a high of 1.31125 and a low of 1.30044. Overall the movement of GBP/USD pair remained flat yet slightly bearish throughout the day. The pair GBP/USD pair was dropped in the earlier session on Monday on the back of profit-taking in the U.S. dollar, but the pair reverted back to its same level in the late closing session.

On Monday, the European Union showed a willingness to compromise to rescue troubled Brexit talks by softening its demand that Britain heeds E.U. rules on state aid. Brussels said that it could go for a compromise entailing a dispute-settling mechanism on any state aid granted by the U.K. to its companies. It means Brussels will no longer oblige London to follow bloc’s own rules from the outset.

The E.U. countries have long demanded so-called “Level Playing Field” guarantees from the U.K. if it requires the free selling of goods in the bloc’s lucrative single market of 450 million people after Brexit’s transition period ends. However, PM Boris Johnson and his government have refused to be bound by E.U. state aid rules, labor laws, or environmental standards as Brexit’s essence was to let Britain decide alone on its regulations.

The other significant sticking point of the negotiations was fishing rights in sea channels between the E.U. and Britain. The bloc has previously signaled that it was willing to compromise in that field if London shifted as well from its demands. Though the negotiations have not proven fruitful yet they have brought the sides closer in some other aspects and have made the E.U. cautiously optimistic about chances for an overall deal.

Meanwhile, the U.K. Prime Minister Boris Johnson said that the trade negotiations were in good progress with Japan. However, tensions with the bloc remain the same. The fishing industry urged the government to guide as the Brexit transition period was near to end without the sector’s definitions.

On the data front, at 13:30 GMT, the Final Manufacturing PMI for July came in line with the expectations of 53.3 and showed an expansion in the manufacturing sector of the U.K. At 18: 45 GMT, the Final Manufacturing PMI for July dropped to 50.9 points from the forecasted 51.3 and weighed on the U.S. dollar. At 19:00 GMT, the ISM Manufacturing PMI in July advanced to 54.2 from the forecasted 53.6 and supported the U.S. dollar. In June, the Construction Spending also dropped by -0.7% from the projected 1.0% and weighed on the U.S. dollar. The ISM Manufacturing Prices in July rose to 53.2 against the anticipated 52.2 and supported the U.S. dollar.

The primary highlighted data ISM Manufacturing PMI came in favor of the U.S. dollar and weighed heavily on the GBP/USD pair that it started posting losses. The Pound traders will look forward to releasing the monetary policy decision by the Bank of England this week on Thursday. The bank’s statement about the negative interest rate decision and plans to help the economy through the pandemic will be observed to find fresh clues of the GBP/USD pair’s movement.

Meanwhile, the pair will follow the U.S. dollar and related events, including the ISM Non-Manufacturing PMI, that is scheduled to release on Wednesday. Apart from that, any progress in Brexit trade deal talks would also benefit/weigh the GBP/USD pair this week.

Daily Technical Levels

GBP/USD– Trading Tip

The GBP/USD is trading at 1.3065 level, having completed the 50% Fibonacci retracement at 1.3060 level. On the higher side, the Sterling can find resistance at 1.3105. In the daily timeframe, the Cable has formed a Doji pattern, which is followed by a solid bullish trend at 1.3100 level, and it has the potential to drive bearish bias in the pair. Let’s keep an eye on 1.3125 to extract a bearish bias in the GBP/USD pair today. A bearish breakout of 1.3050 can drive more selling until 1.3005.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.947 after placing a high of 106.470 and a low of 105.578. Overall the movement of the USD/JPY pair remained bullish throughout the day. The USD/JPY pair rose to its highest level since July 24 at 106.47 Monday, but it started to decline afterward and presented a hammer-like candle.

The broad-based U.S. dollar strength at the starting day of the week provided a boost to USD/JPY pair. The rising U.S. Treasury bond yields helped the greenback continue to outperform its rivals, and the U.S. Dollar Index advanced to 94.00. The U.S. Treasury bond yield gained almost 5% on the day.

On the data front, at 4:50 GMT, the Prelim GDP for the second quarter from Japan came in as -0.6% against the expected -0.7% and supported Japanese Yen. At 4:55 GMT, the Prelim GDP Price Index for the year remained flat with the expectations of 0.9%. At 5:30 GMT, the Final Manufacturing PMI from Japan rose to 45.2 points against the forecasted 42.6. Better than expected macroeconomic data from Japan gave strength to the Japanese Yen that ultimately weighed on the USD/JPY pair in the earlier session.

From the U.S. side, the ISM data at 19:00 GMT showed that the economic activity in the U.S. manufacturing sector expanded at a stronger pace than expected in July. The ISM Manufacturing PMI rose from 52.6 to 54.2 and surpassed the forecast of 53.6.

The ISM Manufacturing Prices for July also increased to 53.2 against the forecasted 52.2 and the previous 51.3 and supported the U.S. dollar. The Wards Total Vehicle Sales from the U.S. surged to 14.5M in July from the previous 13.1M and the expected 14.0M. It also supported the U.S. dollar that ultimately pushed the USD/JPY pair on the upside.

On the other hand, the U.S. lawmakers are finding it difficult to reach a consensus for the U.S. coronavirus aid package. The Republicans are in favor of $ 1 trillion, while Democrats want to offer a package worth $3 trillion. This difference of opinion has caused a delay in the announcement of the U.S. recovery package. The delayed package announcement has made investors cautious, and they are keenly waiting for it to place bets on it.

However, on coronavirus front, the worldwide cases reached 18 million so far with major cities on renewed lockdown restrictions to control the spread. It raised the safe-haven appeal that pushed the Japanese Yen and kept checking on additional gains of the pair USD/JPY.

The coronavirus expert in White House said that the U.S. was in a new phase of the outbreak with infections extraordinarily widespread in both rural & urban areas. On the vaccine front, a mass vaccination campaign from the Russian health authorities was under preparation stage against the virus, and it will start in October. The media of Russia has quoted that doctors and teachers will be the first to receive the vaccine.

In response to this, the U.S. Dr. Anthony Fauci gave critic comments and said that he hoped that Russia and China were testing the vaccine before directing them to anyone. He said that the U.S. should have a safe and effective vaccine by the end of the year. He added that there would be no vaccine so far ahead of the U.S. that the U.S. will have to depend on other countries to get the vaccine. On the US-China front, President Trump threatened to ban the TikTok app in the United States that raised the fears for a halt of a phase-one trade deal and kept the market sentiment soar.

Daily Technical Levels

USD/JPY – Trading Tips

The USD/JPY trades with a bullish sentiment around 105.950 level, having completed 61.8% Fibonacci retracement at 106.063. The pair is forming a bearish engulfing candle below 106.406 level, the level that worked as a support for USD/JPY in now it’s working as a resistance. On the higher side, next USD/JPY may find resistance at 106.650, while support stays at 105.250. The MACD and RSI both are suggesting bullish bias in USD/JPY pair today. Let’s consider staying bullish over 105.550 level today. Good luck! 

On the news front, the market may not offer high impact events, but the focus will stay on the UK BOE Gov Bailey Speaks and Prelim UoM Consumer Sentiment from the United States. Since it’s Friday, we can experience sharp movements in the market, especially during U.S. sessions.

Economic Events to Watch Today 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.13818 after placing a high of 1.14415 and a low of 1.13703. The EUR/USD pair broke its four-day bullish streak on Thursday and started posting losses on the back of European Central Bank’s monetary policy meeting decision combined with the broad-based U.S. dollar strength.

The ECB left its rates unchanged on Thursday; however, the latest recovery plan’s decision worth 750 billion euros was still pending. The European Central Bank held its refinancing operations at 0% and pledged to roll out more stimulus if the Eurozone’s economic recovery slowed materially. However, the meeting was seen as something of a non-event by the analysts, who think that the E.U. Summit will overshadow the ECB announcement.

A two-day European Summit will occur on Friday, and the ECB Governor called for fiscal support just a day ahead of the Summit. E.U. leaders will discuss the European Commission proposal’s distribution pattern for a 750 billion euros recovery plan. This plan was introduced to help some of the economic bloc’s worst-hit members.

According to Christine Lagarde, European leaders must show quick agreement on an ambitious package. Member states disagree on how the recovery package should be funded, and to show an agreement on it, all 27 E.U. member states need to back this package.

However, Italy has backed the proposal before the E.U. Summit to guide other member states to follow its footsteps. However, the Netherland, Sweden, Denmark, and Austria, known as “Frugal Four,” insist that these funds should be released as loans rather than as grants. In its last videoconference meeting, the E.U. leaders failed to reach an agreement, and the decision was forwarded to the next meeting. On Friday, the leaders will again discuss the distribution of the recovery plan, but this time, a face-to-face meeting will occur for the first time since the outbreak of the pandemic.

Chances for securing a deal between 27 member states are low, and traders are cautious. The French Final CPI for June rose to 0.1% against the expected -0.1% and supported Euro on the data front. At 13:02 GMT, the Italian Trade Balance showed a surplus of 5.58 B in May compared to 1.13 B of deficit in April.

At 14:00 GMT, the Trade Balance was up by 8.0 B against the forecasted 5.0B and supported Euro. Despite better than expected economic data from Europe, the EUR/USD pair declined on Thursday amid a strong U.S. dollar. From the U.S. side, the Core Retail Sales and Retail Sales were increased to 7.3% and 7.5% respectively against the expected 5.0% in June and supported the U.S. dollar. The strong U.S. dollar weighed on EUR/USD pair, and the pair started to decline.

Furthermore, the risk-off market sentiment after President Trump announced that he had signed the Hong Kong Autonomy Act. Moreover, the Justice Secretary from the US, William Barr, urged American tech firms not to do business with the Chinese government to reduce competitiveness.

These reports raised fears for the potential cold war between U.S. & China and raised risk-off market sentiment that supported EUR/USD pair declines on Thursday.


Daily Technical Levels

Support Resistance

1.1357     1.1429

1.1328     1.1472

1.1285     1.1501

Pivot point: 1.1400

EUR/USD– Trading Tip

The EUR/USD is taking a bearish turn after placing a high around 1.1439 level. The closing of candles below 1.1439 level has extended selling until the 1.1370 level. Closing of candles above 1.1370 level can drive buying in the EUR/USD pair, but in case, the bearish breakout occurs, we may see EUR/USD prices dropping towards 1.1335 level. Let’s keep an eye on 1.1370 as below this; we can capture a quick sell position.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.25538 after placing a high of 1.26144 and a low of 1.25197. Overall the movement of GBP/USD pair remained bearish throughout the day. The pair extended its previous day’s retracement slide and remained depressed through the first half of the day amid modest U.S. dollar strength. On Thursday, the U.S. dollar was strong across the board due to its safe-haven status as the risk-appetite was fading away. The latest optimism about the potential coronavirus vaccine turned out to be short-lived, and concerns about US-China relations raised the safe-haven appeal.

The strong greenback due to safe-haven demand, the GBP/USD pair came under pressure and dropped in early sessions. However, it showed that the downside movement of the GBP/USD pair was limited after the U.S. Treasury bond yields started to decline. This, combined with the better than expected economic data, gave a push to GBP/USD pair.

At 11:00 GMT, the Claimant Count Change from June was released by the Office for National Statistics on Thursday, which showed that the number of people applied for jobless benefits fell by 28.1K against the expectations +250K. The Claimant count rates eased to 7.3% vs. the previous 7.8%.

The U.K.’s official Jobless rate was also decreased to 3.9% against the expected 4.2% and provided strength to the British Pound. The Average Earnings Index, excluding bonuses, arrived at -0.3% in May against the expected -0.4% and supported British Pound. The steady GBP helped the pair GBP/USD to limit its daily losses on Thursday.

On the U.S. front, the Core Retail Sales and Retail Sales were improved to 7.3% and 7.5% respectively against the projected 5.0% in June and supported the U.S. dollar. The strong U.S. dollar weighed on GBP/USD pair, and the pair extended its losses.

Meanwhile, the Bank of England data revealed that lending has dried up quickly in the second quarter of the year. The Bank’s credit conditions survey showed that mortgages, loans, and credit card lending all dropped in the second quarter, and the further decline was still expected.

On Brexit front, the politicians from across the U.K., including Northern Ireland’s first and deputy first ministers, will discuss Brexit via videoconference. Arlene Foster and Michelle O’Neill will join the video conference chaired by Cabinet Minister Michael Gove.

The representatives from Welsh and Scottish governments and NI Secretary Brandon Lewis will also be heard by the joint ministerial committee. The discussion will focus on NI protocol and the Brexit transition period. Meanwhile, the second meeting with a joint EU & UK committee focused on how to implement the Northern Ireland part of the Brexit deal is also due.

Furthermore, the Brexit talks between U.K.’s chief negotiator David Frost and Michel Barnier continued in Brussels on Thursday to secure a trade deal. Several outstanding issues like fishing, trade, and governance, remain undercard even after four fruitless talks. U.K. is set to leave the controversial Common Fisheries Policy (CFP) and take back control of its U.K. waters, and the E.U. has shown its willingness to compromise to gain access to the U.K. waters.


Daily Technical Levels

Support Resistance

1.2505     1.2610

1.2459     1.2671

1.2399     1.2716

Pivot Point: 1.2565

GBP/USD– Trading Tip

The GBP/USD is trading with a selling bias at 1.2550 level, holding right above the support level of 1.2548 level. Downward breakout of 1.2548 level can extend selling until 1.2506 and 1.2479 support. The MACD and RSI both are supporting a bearish bias. On the upper side, the GBP/USD can face resistance at 1.2575 and 1.2595. Let’s consider taking Sell trades below 1.2533 level today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.275 after placing a high of 107.398 and a low of 106.830. Overall the movement of the USD/JPY pair remained bullish throughout the day. The USD/JPY pair moved sideways in the first half of the trading session on Thursday; however, it started to gain traction in the early hours of American trading session, and after that, it advanced to a daily high of 107.398.

The optimism related to potential coronavirus vaccine was short-lived and faded away quickly and dragged risk sentiment. The decreased risk appetite in the market weighed on Japanese Yen and pushed the USD/JPY pair on the above track.

Earlier in the day, the U.S. Census Bureau’s data showed that Retail Sales in June increased by 7.5% and beat the market expectations of 5.0%. The Core Retail Sales data in June also surged to 7.3% from the expected 5.0% and supported the U.S. dollar. The Philly Fed Manufacturing Index rose to 24.1 against the expected 20.0 and supported the U.S. dollar. The strong U.S. dollar pushed the USD/JPY prices in the upward direction on Thursday.

However, the gains in currency pair were capped by the poor than expected jobless claims data from the U.S. Last week, the Unemployment claims made by the Americans rose to 1300K from the 1250K of expectations and weighed on the U.S. dollar.

1.3M jobless people filed for jobless benefits last week, and it showed that the U.S. economy still has a large portion to fill in the jobs department. At 19:00 GMT, the Business Inventories from the United States came in as expected -2.3%. The NAHB Housing Market Index from the United States rose to 72 from the expected 60 and supported the U.S. dollar and added further in USD/JPY pair gains.

Furthermore, the New York President of Federal Reserve said on Thursday that the Fed’s emergency lending facilities have helped to ease credit markets after the pandemic disrupted them. He said that relatively low usage of the program indicated that markets were functioning well.

The statement that low-take up of emergency lending facilities was a sign of success from John Williams gave additional strength to the already strong U.S. dollar, and hence, USD/JPY pair further increased.

On US-China front, the US Justice Secretary, William Barr blamed Hollywood and U.S. tech firms of cooperating with the Chinese government to work there. Barr said that such actions could damage the liberal world order.

Speaking at Gerald Ford Presidential Museum, he advised U.S. firms not to give up their secrets and values to China by coming under pressure because it will make the U.S. vulnerable and dependent on China for certain goods.

This was the latest criticism of China by the White House and other U.S. officials. He warned that the working of Disney & American corporations with Beijing would weaken competitiveness and prosperity. He urged U.S. firms to challenge Chinese demands and said that if an individual company cannot take a stand, then firms should combine.

Furthermore, the U.S. imposed visa restrictions on certain employees of Huawei Tech Company. In response to this, the Chinese technology giant Huawei on Thursday, stated regret over the U.S. move to restrict its employees from visiting the U.S. Huawei called the U.S.’s latest move as “an unfair and arbitrary action.”


Daily Technical Levels

Support Resistance

106.93     107.51

106.59     107.75

106.35     108.09

Pivot Point: 107

 USD/JPY – Trading Tips

The USD/JPY is consolidating in a wide trading range of 107.400 – 107, while the overall bias seems neutral at 107.191. Recently the USD/JPY pair has 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. At the same time, 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! 

On the news side, the economic calendar is fully loaded with a series of high impact economic events, especially the UK GDP, and the Inflation figures from Germany and the U.S. Most of the action will be seen during the U.S. session upon inflation figures.

Economic Events to Watch Today 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.13424 after placing a high of 1.13746 and a low of 1.12976. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD pair extended its previous day’s gains and jumped sharply on Monday against the U.S. dollar ahead of key developments in European Union later this week. Euro is likely to face a volatile week ahead as European Central Bank is set to retain its monetary policy conference on Thursday, and an E.U. Summit will also take place on Friday.

The ECB will likely hold its rates unchanged on Thursday that has drawn traders’ attention over the speech of ECB president Christine Lagarde, which could include some clues about future policy actions.

The ECB meeting could be shadowed by the E.U. Summit when all 27 member states of the European Union will meet, and bloc’s leaders will debate over the European Commission’s coronavirus recovery plan. The plan needs the backing of all 27 member states that made it difficult for compromise.

Germany and Italy have shown their consent and backed the E.U.’s 750 Billion euros recovery plan ahead of Friday’s meeting to appease other member states who have voiced concerns over the distribution of stimulus.

The Frugal Four, including Netherland, Sweden, Denmark, and Austria, have insisted that the funds be released as loans rather than grants or subsidies. The ongoing demand for the single currency can be seen by the week’s strong start for the Euro. On the flip side, the U.S. dollar was on the low track on Monday due to improved risk appetite after optimism raised in hopes of potential virus vaccine. The weaker U.S. dollar against its rival currency Euro gave a push to EUR/USD prices on Monday.

On the data front, at 11:00 GMT, the German WPI Wholesale Price Index for June came in as 0.6% compared to May’s -0.6%. From the American side, the Federal Budget Balance showed that in June, there was a deficit of 864.1 Billion against the expected 860 Billion and supported the U.S. dollar that kept a lid on additional gains in EUR/USD pair.

Daily Support and Resistance

• R3 1.1459
• R2 1.1406
• R1 1.1368

Pivot Point 1.1315

• S1 1.1278
• S2 1.1224
• S3 1.1187

EUR/USD– Trading Tip

On the 4 hour timeframe, the EUR/USD pair has violated an upward trendline, which was extending support at 1.1341 level, and now, this level will work as a resistance for the EUR/USD. On the lower side, the EUR/USD pair may find the next support at 1.1304 and 1.1265 level. The EUR/USD’s selling bias seems dominant since the violation of an upward trendline. We should consider taking selling trades below the 1.1345 level today. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.25531 after placing a high of 1.26661 and a low of 1.25500. Overall the movement of GBP/USD pair remained bearish throughout the day. On Monday, the pair GBP/USD failed to extend its previous day’s bullish trend and started to decline because of downbeat comments from BOE’s Governor Bailey and persistent Brexit uncertainty ahead of the U.K.’s deadline’s official departure from E.U.

Bank of England Governor Andrew Bailey said on Monday that he thought that Britain’s economy was recovering, but it had a long way to go with the outlooks for jobs. He said that with the economies re-opened, the economy seems like it has come back, but there was a long way to go because a lot of people were still jobless.

Bailey’s downbeat comments weighed on Cable and dragged the Cable pair GBP/USD on the downside on Monday. Bailey also said that the Bank of England was looking at whether it should create a digital currency as it has huge implications on the nature of payments and society. He also acknowledged that since the coronavirus pandemic has escalated, there had been calls to step back from the shift away from Libor, which is used to price trillions of dollars of financial contracts.

However, he said that coronavirus’s shock has only reinforced the importance of removing the dependency of financial systems on Libor in a timely way. He warned lenders and borrowers to place their transition plans because if they think that the deadline to shift away from Libor of 2021 will be extended, then they were wrong.

On Brexit front, the U.K. government set to build 10-12 new Brexit border customs and control sites across the country to strengthen the mission to take back control from the E.U. The Cabinet Minister Michael Gove defended his plans for new post-Brexit border infrastructure after the opposition party said that the government was unprepared.

 Daily Support and Resistance

• R3 1.277
• R2 1.2697
• R1 1.2654

Pivot Point 1.2581

• S1 1.2538
• S2 1.2465
• S3 1.2421

GBP/USD– Trading Tip

The GBP/USD is trading with a bearish bias, especially after crossing below 50 EMA support level of 1.2570. This level is now working as resistance, and the Cable can show further bearish bias below 1.2570 level. Closing below this level can lead the GBP/USD pair towards 1.25200 level. The MACD and RSI are holding in a selling zone, and the 50 EMA, which is providing resistance at 1.2570, is also demonstrating the strong sell signal. Let’s consider taking sell trades below 1.2570 level. At the same time, second selling can be placed below the 1.2515 level today. 

USD/JPY – Daily Analysis

The USD/JPY was closed at 107.287 after placing a high of 107.316 and a low of 106.785. Overall the movement of the USD/JPY pair remained bullish throughout the day. The USD/JPY pair after falling for three consecutive days rose on Monday amid improving risk sentiment in the market that undermined the Japanese Yen and contributed to pair gains.

A report suggesting an effective coronavirus vaccine gave hopes and recovered optimism in the market. It also helped equity indexes start the new week on firm foot. The S&P 500, Dow Jones and NASDAQ were up from 1%-1.2% on the day and weighed on safe-haven Japanese Yen. The weaker Yen against the U.S. dollar gave a push to USD/JPY prices on Monday.

As for the vaccine new, on Sunday, several media reports suggested that Russia has become the first nation to complete the clinical trials of a COVID-19 vaccine on humans. The trials have reported that in initial results, the vaccine was safe and effective to an extent. Russia celebrated the supposed “world’s first COVID-19 vaccine”; however, it seemed premature as more research was still needed.

However, this news raised optimism and risk sentiment around the market and decreased the safe-haven appeal. The risk weighed on safe-haven Japanese yen and dragged the pair USD/JPY with itself. On the data front, at 9:30 GMT, the Tertiary Industry Activity from Japan came in as -2.1% against the expectations of -3.7% for May. It supported Japanese Yen and additional capped gains in currency pair.

From the American side, the Federal Budget Balance for June showed a deficit of 864.1 Billion against the forecasted 860 Billion. It supported the U.S. dollar, which added further in the currency pair daily gains.

On the other hand, The Director-General of WHO, Tedros Adhanom Ghebreysus, warned that too many countries were moving towards their destruction as the virus was the number one public enemy. If basic protocols were not followed, the pandemic might get worse and worse and worse.

Tedros said that on Sunday, from across the globe, 230,000 new cases appeared, out of which 80% were from 10 nations and 20% from just two countries. Tedros also said that the WHO had still not received formal notifications of the U.S. pullout that Trump announced. This downbeat statement by WHO raised concerns about global economic recovery and weighed on risk sentiment that kept a check on additional currency pair gains.

Support and Resistance    

• R3 108.1
• R2 107.91
• R1 107.59

Pivot Point 107.39

• S1 107.07
• S2 106.87
• S3 106.55

 USD/JPY – Trading Tips

On Tuesday, the USD/JPY continues to consolidate in a wide trading range of 107.350 to 106.950. Recently the USD/JPY pair has violated a downward channel, which extended resistance at 107.100 level. Simultaneously, the USDJPY pair has also crossed over 50 periods exponential moving average, which also supports the bullish bias in the USD/JPY pair. For now, the bullish breakout of the 107.340 level can extend the buying trend until 107.620 and 107.900 level. The MACD and RSI support bullish bias, and we may take a buying trade over 107.350 today. Good luck! 

On the news front, eyes will be European German WPI data, Canadian BOE Gov Bailey Speaks, and Federal Budget Balance. But none of them is highly impacted and may not drive major movements in the market. Let’s focus on the technical side of the market.

Economic Events to Watch Today 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.12984 after placing a high of 1.13245 and a low of 1.12545. Overall the movement of EUR/USD remained bullish throughout the day. The EUR/USD pair left behind its bearish stance and started posting gains on Friday due to better than expected macroeconomic data from the European side and weak data from the U.S. side. The downside pressure on greenback supported the upside movement of the EUR/USD pair.

The tone around the U.S. dollar remained negative due to the increased number of coronavirus cases from many states that reached more than 60,000 per day. Moreover, the number of deaths was also increasing that raised bars for renewed restrictions. The potential lockdown measures weighed on the U.S. dollar as it would affect the U.S. economy. The downbeat U.S. dollar added strength to EUR/USD pair on Friday.

On the other hand, ECB said that Bulgaria and Croatia were accepted to be a part of the ERM-2 mechanism, a mandatory stage for joining the euro, and beginning the currency bloc’s first expansion in half a decade. After the approval from the eurozone finance minister and ECB officials, the two eastern European nations will also join the bloc’s banking union from October 1.

Following the procedure, both nations must spend at least two years in ERM-2 before starting the practical preparations to join the euro that will roughly take another year. So, the estimated earliest year for their membership will be 2023. This positive news added further in the EUR/USD gains.

On the data front, at 11:45 GMT, the French Industrial Production for May increased to 19.6% from the forecasted 15.2% and supported euro. At 13:00 GMT, the Italian Industrial Production for May was also raised to 42.1% from the forecasted 23.5 % and supported euro that ultimately helped the EUR/USD currency pair to post gains.

From the American side, the Core PPI for June declined to -0.3% from the forecasted 0.1% and weighed on the U.S. dollar. At 17:30 GMT, the PPI for June also declined to -0.2% from the expected 0.4% and weighed on the U.S. dollar that added further in the upward trend of EUR/USD pair.

Next week, the key data would be about the ECB’s next policy meeting on the coming Thursday, and from the U.S. side, eyes will be on Core Retail Sales & Retail Sales data on Thursday. A repetition of recent comments is expected in ECB’s next policy meeting that means ECB will reiterate its stance towards supporting a recovery.

Daily Support and Resistance

• R3 1.1459
• R2 1.1406
• R1 1.1368

Pivot Point 1.1315

• S1 1.1278
• S2 1.1224
• S3 1.1187

EUR/USD– Trading Tip

The EUR/USD pair has violated a downward trendline, which extended resistance at 1.1291 level, and now this level is going to work as a support for the EUR/USD. On the higher side, the EUR/USD may find resistance at 1.1350 level. Above this, the next target can be seen around the 1.1390 level. Bullish bias seems dominant today.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.26217 after placing a high of 1.26640 and a low of 1.25666. Overall the movement of GBP/USD pair remained bullish throughout the day. The fresh supply in the U.S. dollar gave strength to GBP/USD pair on the last day of the week, and the pair rallied around 90 pips. Greenback struggled to gain attraction on Friday despite the increasing number of coronavirus cases. The fresh leg down in the U.S. Treasury bond yields dragged the U.S. dollar and made it weaker.

The traders ignored the persistent Brexit uncertainties on Friday as the main driver of the GBP/USD was the U.S. dollar. The European Union’s top negotiator Michel Barnier said that talks on the post-Brexit relationship had made a little progress. However, there were still significant differences in several important issues. This also added some positive momentum to Cable pairs.

On the data front, the U.S. dollar was weak due to poor than expected PPI reports. At 17:30 GMT, the Core PPI for June dropped to -0.3% from the expected 0.1%, and PPI was declined to -0.2% from the forecasted 0.4% and pushed the GBP/USD pair higher. While from Great Britain, the C.B. Leading Index for May came in as -1.4% compared to April’s -3.7%.

For the next week, coronavirus cases will remain dominant. Still, the calendar will also be under observation as U.K.’s GDP and claims will be announced, while from the U.S., the Consumer figures will remain under watch.

GDP for May will be released from the U.K. next Tuesday that could show some stability after a collapse of 20.4% in April. The most important data will release on Thursday about the jobs report. The Unemployment Rate is expected to increase to 4.7% in May after the remaining 3.9% in April. The government’s furlough scheme that was extended through October has helped keep unemployment low. Wages are expected to jump from 1% to 1.4% in the gauge, including bonuses.

From the U.S. side, the increasing number of coronavirus cases from Florida, California, Arizona, and Texas will remain under watch. However, on the data front, the key release will Retail Sales that are projected to rebound in June to 4.6%. The Core Consumer Price Index is expected to surge to 0.1% from the previous -0.1%.

 Daily Support and Resistance

• R3 1.277
• R2 1.2697
• R1 1.2654

Pivot Point 1.2581

• S1 1.2538
• S2 1.2465
• S3 1.2421

GBP/USD– Trading Tip

The GBP/USD is trading with a bearish bias, especially after crossing below 50 EMA support level of 1.2570. This level is now working as resistance, and the Cable can show further bearish bias below 1.2570 level. Closing below this level can lead the GBP/USD pair towards 1.25200 level. The MACD and RSI are holding in a selling zone, and the 50 EMA, which is providing resistance at 1.2570, is also demonstrating the strong sell signal. Let’s consider taking sell trades below 1.2570 level today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 106.911 after placing a high of 107.262 and a low of 106.635. Overall the movement of USD/JPY remained bearish throughout the day. The pair USD/JPY extended its previous day losses and dropped for the 3rd consecutive day on the back of broad-based selling bias around the U.S. dollar. The pair dropped to over two weeks the lowest level in the wake of risk-off market sentiment that gave strength to safe-haven Japanese Yen.

The recent optimism regarding the sharp V-shaped economic recovery faded away quickly after the record increase in the number of daily reported COVID-19 cases in the U.S. on Thursday. The continuous surge in the number of appearing cases and deaths also pushed the risk-off market sentiment that weighed on the equity market.

The global fight to safety weighed on U.S. Treasury bond yields that prompted selling bias in the U.S. dollar. The weak U.S. dollar failed to lend any support to the USD/JPY pair. On the data front, the PPI from Japan was released at 04:50 GMT, dropped by 1.6% against the forecasted drop of 2.0%, and supported Japanese Yen. The strong Japanese yen added in the losses of the USD/JPY pair.

At 17:30 GMT, the Core PPI for June was dropped to -0.3% from the expected 0.1% and weighed on the U.S. dollar. For June, the PPI also dropped to -0.2% against the forecasted 0.4% and weighed on the U.S. dollar that also dragged USD/JPY Pair.

On the other hand, the largest one-day increase in any country since the pandemic started was reported in the U.S. as 65,000 cases alone on Thursday. This raised the market’s safe-haven appeal that gave a push to Japanese Yen and ultimately weighed on USD/JPY pair. Moreover, the Federal Reserve said that in June, it purchased $1.8 Billion in corporate bonds to keep U.S. interest rates lower and ensure that large companies could borrow by selling bonds. 

The bonds were purchased to keep interest rates on corporate bonds lower, making it harder for companies to borrow by selling debts. A Fed official announced this week that recently Fed has slowed down its bond-buying and if the market remained relatively healthy, then the central bank will continue to do so.

Support and Resistance    

• R3 108.1
• R2 107.91
• R1 107.59

Pivot Point 107.39

• S1 107.07
• S2 106.87
• S3 106.55

 USD/JPY – Trading Tips

The USD/JPY is holding at 106.850, and this is going to provide solid support to the USD/JPY pair for now. However, this level’s bearish breakout has a huge odds of driving more selling until 106.450 level today. At the moment, the pair is trading with a selling bias of above 106.850 support. The USD/JPY is dropping below 50 periods EMA on the hourly charts, which supports the Japanese pair’s selling bias. Let’s look for selling trades below 107.250 today. Good luck! 

On the news side, we don’t have much to focus on due to a lack of economic events. However, the trading levels and technical outlook will be worth watching today. Crude oil inventories can drive price action in crude oil prices.

Economic Events to Watch Today 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.12741 after placing a high of1.13323 and a low of 1.12585. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD pair started to fall on Tuesday on the back of many factors, including negative macroeconomic data from Europe, downbeat comments from E.U. Commission, Chinese stock surge, and an increasing number of coronavirus cases across the world.

On the data front, at 11:00 GMT, the German Industrial Production for May dropped to 7.8% from the expected 11.0% and weighed on Euro. At 11:45 GMT, the French Trade Balance for May showed a deficit of 7.1B against the expected 4.5B deficit and weighed on single currency Euro and dragged the pair EUR/USD on the downside. At 13:02 GMT, the Italian Retail Sales for May surged by 24.3% from the expected 15.0% and supported single currency Euro.

On the U.S. side, at 18:59 GMT, the IBD/TIPP Economic Optimism for July dropped to 44.0 from the forecasted 48.2 and weighed on the U.S. dollar. At 19:00 GMT, the JOLTS Job Openings in May were reported as 5.40M against the expected 4.70M and supported the U.S. dollar and added further in the downward trend of EUR/USD pair.

The European Commission said on Tuesday that the E.U. would likely suffer a deeper contraction in 2020 than previously expected, while 2021 recovery will also be weaker than forecast. The E.U. Commission expected EU GDP to contract by 8.3% in 2020, and in 2021 an expansion by 5.8% was expected. However, previously the contraction was forecasted to be 7.75 in 2020, and the growth in 2021 was predicted as 6% by the commission. 

The change in the forecast was made due to the government’s slow efforts to lift lockdown measures than expected. An executive vice president of the Commission, Valdis Dombrovskis said that the lockdown’s economic impact was more severe than it was initially expected. He said that many risks were still present in the economy, including another major wave of infection. Italy, Spain, and France’s economies were expected to get the worst-hit by the pandemic this year as the GDP contraction for these were expected as 11.2%, 10.9%, and 10.6%, respectively. However, Germany’s economy was expected to contract by 6.3% this year as per the E.U. Commission’s latest forecast.

According to the commission, the worst may have passed as of May, and June’s economic data came in mostly positive. The recovery will likely gain traction in the second half of this year, while inflation was expected to average 0.3% this year and 1.1% in 2021, said by E.U. Commission on Tuesday. The downbeat forecast and comments from E.U. Commission on Tuesday weighed heavily on single currency Euro and caused the pair EUR/USD to lose almost all of its gains from yesterday.

Daily Support and Resistance

• R3 1.1463
• R2 1.1405
• R1 1.1356

Pivot Point 1.1298

• S1 1.125
• S2 1.1191
• S3 1.1143

EUR/USD– Trading Tip

The EUR/USD is trading above a strong support level of 1.1265 level, and closing the Doji and bullish engulfing candle above this level may drive the buying trend in the EUR/USD pair. On the higher side, the next resistance is likely to be found around the 1.1303 level. But in case, the pair violates 1.1265 support, the next support is likely to stay around 1.1225 level.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.25432 after placing a high of 1.25920 and a low of 1.24624. The GBP/USD pair rose for 3rd consecutive day on Tuesday and reached near 1.2600 level, highest since June 16, 2020, on the back of fresh hopes that the E.U. might compromise on fisheries policy to reach the Brexit trade deal.

British Pound rose to 3 weeks highest level on the back of news that chief Brexit negotiator of U.K. would meet the Michel Barnier ahead of the next round of talks. To discuss some of the trickier parts of negotiations, David Frost will have dinner on Tuesday night with Barnier.

The dinner between both Brexit negotiators will be seen as an opportunity for both sides to clear issues in an informal setting. As they will be informal talks, the agenda will include the range of the problems that need to reach an agreement from the level playing field, fishing waters, to governance structures.

Some other reports came in the market related to fresh hopes for the Brexit deal as the E.U. showed a willingness to compromise on fisheries policy. Michel Barnier said that Brussels would support a U.K. proposal to divide fishing quotas according to data that reflects the number of fish in Britain waters.

After the failure of last week’s round of Brexit talks, this news raised new hopes that a deal could be reached before transition periods end. This gave strength to British Pound, which ultimately pushed GBP/USD pair higher on Tuesday.

Fisheries have long been a point of argument for both sides as Britain has been asking for a system based on yearly quotas, while Brussels has said that any deal had to be part of a larger comprehensive trade agreement.

On the data front, at 12:30 GMT, the Halifax HPI for June from the U.K. came in as -0.1% against the forecasted -0.8% and supported British Pound. It ultimately raised the GBP/USD pair on Tuesday.

On the U.S. side, at 18:59 GMT, the IBD/TIPP Economic Optimism declined to 44.0 from the forecasted 48.2 in June and weighed on the U.S. dollar and supported the GBP/USD pair’s bullish trend.

At 19:00 GMT, the JOLTS Job Openings increased to 5.40M against the expected 4.70M in May and supported the U.S. dollar, which kept the gains in GBP/USD pair limited.

 Daily Support and Resistance

• R3 1.2584
• R2 1.2553
• R1 1.2523

Pivot Point 1.2491

• S1 1.2461
• S2 1.2429
• S3 1.24

GBP/USD– Trading Tip

The GBP/USD is trading with a bullish bias, especially after violating the double top resistance level of 1.2530 level. The same level is working as support, and the Cable can show bullish bias above this level today to lead the pair towards 1.2580 level. The MACD and RSI are holding in a buying zone and the 50 EMA, which also supports the buying trend in the pair. The recent candles are neutral, as it seems like the traders are looking to stay bullish over 1.2530 level. Let’s consider taking buying trades today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.524 after placing a high of 107.789 and 107.244. Overall the movement of the USD/JPY pair remained bullish throughout the day. The dollar edged higher against Japanese Yen on Tuesday amid negative macroeconomic data from Japan and a combination of some other factors supporting the U.S. dollar.

The rising number of COVID-19 cases in the U.S. kept the market sentiment on the upside as Florida reported 7,347 new cases, and Arizona reported 3,653 new cases on Tuesday. The second wave of coronavirus was causing a surge in the hopes for renewed lockdown restrictions in the U.S. as well. However, Australia, Spain, and Serbia imposed renewed lockdown in their areas where the spread of COVID-19 was needed to control.

The second round of lockdown restrictions from countries across the globe raised hopes that further stimulus measures will be needed from central banks to support the economy. This gave a push to U.S. Dollar prices on Tuesday, and the pair USD/JPY started posting gains.

On the data front, at 4:30 GMT, the Average Cash Earnings from Japan for the year decreased to -2.1%from the expected -0.9% and weighed on Japanese Yen. The Household Spending from Japan also decreased to -16.2% from the forecasted -11.8% and weighed on Japanese Yen and added further strength in the rising USD/JPY prices. At 10:00 GMT, the Leading Indicators from Japan remained flat with the expectations of 79.3%.

On the U.S. side, at 18:59 GMT, the IBD/TIPP Economic Optimism for July declined to 44.0 from the anticipated 48.2 and weighed on the U.S. dollar. At 19:00 GMT, the JOLTS Job Openings in May were recorded as 5.40M against the forecasted 4.70M and supported the U.S. dollar and ultimately raised USD/JPY pair further.

Meanwhile, on Tuesday, China’s foreign ministry announced that China had joined a global arms trade treaty at the U.N. that was rejected by the United States. The foreign ministry spokesman, Zhao Lijian, said that all the legal procedures to join the treaty were completed, and it will be effective after 90 days.

As per the treaty, it requires the member countries to keep records of international transfer of weapons and to prohibit cross-border shipments that could be used in human rights violations or attacks on civilians. Beijing committed to the treaty efforts on Tuesday to improve peace and stability in the world. Apart from this, reports suggested on Tuesday that scientists were calling for the WHO to acknowledge that coronavirus could spread in the air. This would change the current measures being taken to stop the virus spread.

Support and Resistance    

• R3 108.21
• R2 108
• R1 107.69

Pivot Point 107.47

• S1 107.16
• S2 106.94
• S3 106.63

USD/JPY – Trading Tips

The USD/JPY is consolidating in a wide trading range of 107.800 to 107.250. At the moment, the pair is trading with a selling bias of below 107.80 resistance. On the hourly charts, the USD/JPY is dropping below 50 periods EMA, which supports the selling bias in the Japanese pair. It seems like we have a margin to capture quick 25 pips in USD/JPY as the pair moves within a sideways range and has odds of the testing support level of 107.250. Good luck! 

On the news front, the Eurozone and Switzerland may release a series of low impact events, but they are expected to have a muted impact in the market. The market will be looking towards the new signals about the recovery fund from the meeting of euro-area finance ministers on the coming Thursday before E.U. Summit on 17-18 July.

Economic Events to Watch Today 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.13084 after placing a high of 1.13454 and a low of 1.12407. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD pair extended its previous day gains and rose for the second consecutive day towards the nine-day highest level near 1.13460 level on the back of improved risk-sentiment and weak U.S. dollar.

At 11:00 GMT, the German Factory Orders for May decreased to 10.4% from the expected 15.1% and weighed on single currency Euro. At 13:30 GMT, the Sentix Investor Confidence for July was declined to -18.2 from the expected -10.8 and weighed on Euro. At 14:00 GMT, the Retail Sales in May from the European Union was reported to increase by 17.8% against the forecasted 15.0% and supported Euro.

Investors followed the release of Retail Sales from the E.U. and gave a push to Euro, which ultimately raised EUR/USD prices on Monday. However, the negative data from German factory orders and Sentix investor confidence capped the additional gains in EUR/USD pair.

On the U.S. dollar front, the Final Services PMI rose to 47.9 from the expected 47.0. The ISM Non-manufacturing PMI was also raised to 57.1 from the forecasted 50.0 and supported the U.S. dollar, which also limited the EUR/USD pair’s bullish move on Monday.

U.S. & Global equities surged on Monday on the back of improved U.S. Services sector data. The data showed that the U.S. services sector was regaining its pre-pandemic position. The rising global equities, including S&P 500 futures that raised almost 1.5% on Monday, pushed the risk-on market sentiment and raised EUR/USD pair. Despite positive data from the U.S., the U.S. dollar was weak across the board due to risk-on market sentiment. The U.S. Dollar Index was down by almost 0.5% at 96.852 level.

The market will be looking towards the new signals about the recovery fund from the meeting of euro-area finance ministers on the coming Thursday before E.U. Summit on 17-18 July. As Germany has the six-month rotating presidency of the European Union, It will arrange the consensus about the structure of the COVID-19 recovery fund.

Daily Support and Resistance

• R3 1.1463
• R2 1.1405
• R1 1.1356

Pivot Point 1.1298

• S1 1.125
• S2 1.1191
• S3 1.1143

EUR/USD– Trading Tip

The EUR/USD is stuck below the triple top resistance level of 1.1342, which can be seen on the 4-hour timeframe. On the lower side, the support stays at 1.1303 level today. A bullish breakout of 1.1342 level can trigger the continuation of a bullish trend until 1.1395, while bearish breakout of 1.1306 can open further room for selling until 1.1223 level today.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.24918 after placing a high of 1.25202 and a low of 1.24560. Overall the movement of GBP/USD pair remained bullish throughout the day. The GBP/USD was moving on the upside track on Tuesday but faced too much resistance. The investors were cautious about placing any strong position in the market due to Brexit negotiations that have resumed in London.

This time, the negotiations were face-to-face, and traders were hopeful that a Brexit deal could be secured, which raised the bars for British Pound in the market. However, the stakes were also high after the last round of talks ended a day earlier last week in Brussels because of profound differences between both parties.

E.U. chief negotiator Michel Barnier said that serious divergences remain, but it would be too early to say that chances of trade agreement had fallen. Even if a deal were secured, the risks of the economic impact would be significant, which will be priced into the pound.

On the other hand, U.K. chief negotiator David Frost said that while the talks continue to be constructive, there were still significant differences between the U.K. & E.U. It was a chance to have some further discussion to see what progress might be made. Britain wanted to see if there was a chance for progress in talks with the European Union this week after last week’s round of Brexit negotiations ended a day earlier due to significant differences between both sides.

However, some speculations that the U.K. could sign up to the E.U.’s compromise requests initially, with a warning, would move away from them in the future in the knowledge that the E.U. would respond with tariffs.

On the data front, at 13:30 GMT, the Construction PMI from Great Britain came in as 55.3 in June against the expected 46.0 and supported British Pound. At 13:34 GMT, the Housing Equity Withdrawal for the first quarter came in as -5.1B in comparison of the previous -5.0B and gave almost null-effect to GBP.

On late Tuesday, the British finance minister Rishi Sunak announced that he would spend 3 billion pounds to create green jobs and increase the energy performance of public buildings to kickstart the economy. This announcement helped British Pound to gain traction in the late Tuesday session and raised GBP/USD.

Meanwhile, the U.S. dollar was under pressure in the risk-on market sentiment as the reports came in about failure to contain coronavirus from many countries like India, Mexico, and specifically the United States. Weak U.S. dollar added in the upward movement of GBP/USD pair on Tuesday.

 Daily Support and Resistance

• R3 1.2584
• R2 1.2553
• R1 1.2523

Pivot Point 1.2491

• S1 1.2461
• S2 1.2429
• S3 1.24

GBP/USD– Trading Tip

The GBP/USD is trading at 1.249 level, and it’s finding immediate support at 1.2478 level. Closing of candles above 1.2478 level can open further room for buying until double top resistance level of 1.2530 level. While, the bullish breakout of 1.2530 level, can drive further buying in Cable until 1.2620 level. The RSI and MACD show bullish bias as the MACD and RSI are holding in a buying zone. Let’s consider taking a buy trades above 1.2441 level today.

USD/JPY – Daily Analysis

The USD/JPY was closed at 107.391 after placing a high of 107.770 and a low of 107.255. Overall the movement of the USD/JPY pair remained bearish throughout the day. The USD/JPY pair rose in the first half of the day but failed to stay at upside track and reversed its direction in the second half on the back of weak U.S. dollar in improved risk sentiment after the release of better than expected U.S. Services Sector data.

At 18:45 GMT, the Final Services PMI from the United States was released for June, which surged to 47.9 from the expected 47.0 and supported the U.S. dollar. At 19:00 GMT, the ISM Non-Manufacturing PMI came in as 57.1 against the expected 50.0 and supported the U.S. dollar, which limited the additional losses in USD/JPY pair.

The Non-Manufacturing PMI released from the ISM showed that the United States’ services sector was improved in June. It raised the U.S. equity market across the globe and added in the risk sentiment of the market weighing on the U.S. dollar, which dragged the USD/JPY pair on Tuesday towards the downside. The U.S. Dollar Index that measures the value of the U.S. dollar against the basket of six currencies dropped more than 0.5%, while U.S. 2-year Treasury yield was stuck at 0.16% and 10-year treasury yield fell from 0.71% to near 0.68%.

The positive data from the market was cheered by the investors as it indicated signs of economic recovery on the back of measures taken by the central banks from across the globe. The fact that global governments were restrained from imposing lockdown measures for the second time and preferred to contain the outbreak at the regional and local levels has helped recover the economy.

On the trade front, the U.S. Chamber of Commerce and 40 other trade associations advised the top U.S. and Chinese officials to redouble efforts to complete phase one trade deal despite the coronavirus crisis. On Monday, in a letter to U.S. Treasury Secretary Steven Mnuchin, US Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He, the group said that the development in trade deal vows fortified them. Still, they called for a substantial increase in China’s purchases of U.S. goods & services.

On Coronavirus front, in the first four days of July, the 15 states of the U.S. reported a record rise in the new cases of COVID-19. Meanwhile, India, Australia, and Mexico also reported record increased number of infection cases on Monday. India beat Russia and became the country with the third-highest number of cases in the world after 25,000 new infections were recorded in a day.

Support and Resistance    

• R3 108.21
• R2 108
• R1 107.69

Pivot Point 107.47

• S1 107.16
• S2 106.94
• S3 106.63

USD/JPY – Trading Tips

The USD/JPY is trading with a bearish bias of around 107.560. On the two-hourly charts, the USD/JPY is gaining bullish support from the regression channel. Channel is expected to support the USD/JPY pair around 107.420 while crossing below this level can open up further room for selling until 107 and 106.850 level. The 50 EMA will also be supporting the Japanese pair at 107.300 level. However, the MACD and RSI are suggesting selling bias. Let’s keep an eye on 107.400 level to buy above and sell below this level. Good luck! 

On the fundamental side, the market isn’t bustling as we only got ISM Non-Manufacturing PMI from the U.S. and BOC Business Outlook Survey from the Canadian economy. The ISM non-manufacturing may drive some price action during the U.S. session today. Overall, the technical side will play most of the role.

Economic Events to Watch Today 

EUR/USD – Daily Analysis

The EUR/USD closed at 1.12404 after placing a highof1.12510 and a low of 1.12191. he EUR/USD pair showed a little positive movement on Friday as the U.S. market was closed due to Holiday, and in the absence of American traders, EUR/USD pair followed economic data from Eurozone and COVID-19 news.

On Friday, the economic data from the Eurozone came in positive and above expectations and raised Euro above the U.S. dollar, which pushed EUR/USD pair on the upward track. On the data front, at 11:45 GMT, the French Government Budget Balance for May showed a deficit of 117.9B compared to April’s deficit of 92.1B. At 12:15 GMT, the Spanish Services PMI for June rose to 50.2 from the expected 46.0 and supported Euro. At 12:45 GMT, the Italian Services PMI was decreased to 46.4 from the expected 46.9 and weighed on Euro. 

At 12:50 GMT, the French Final Services PMI for June rose to 50.7 from the 50.3 expected and supported Euro. At 12:55 GMT, the German Final Manufacturing PMI rose to 47.3 in June from the forecasted 45.8 and supported Euro. At 13:00 GMT, the Final Services PMI from the whole bloc for June rose to 48.3 from the expected 47.3 and supported Euro.

The positive PMI data from the whole bloc except Italy gave a boost to single currency Euro at the ending day of the week and raised EUR/USD pair. However, due to a limited number of traders, the currency pair failed to provide a significant bullish move and remained in consolidation.

On the US-EU relation front, earlier this week, the E.U. declined to include the U.S. in its list of “safe-countries” that will be welcomed to enter E.U. bloc during a pandemic. However, given the unshakable alliance between both nations, in a political move, the E.U. would now open the majority of E.U. borders for some residents of the United States. It was not surprising that Americans would indeed enter the E.U. even with almost 3 million COVID-29 cases from 50 U.S. states.

On the negative side, according to European diplomats, the strained alliance of the E.U. and the U.S. would restore in Joe Biden’s presidency. The Presidency of Donald Trump has weighed on the relation of the U.S. with its closest allies, including the European Union. The attacks on International institutions like WHO by Trump have been stressful for its allies. Trump’s disliking for multilateral action has tested longstanding alliances, and European diplomats and foreign policy experts believe that Joe Biden will repair the damage done by Trump to America’s broken alliance with Europe.

This week, the consumer confidence and retail sales figures from Eurozone will be under watch from Euro traders for taking fresh impetus. The attention would also be upon the update of the Recovery fund and announcement of new Eurogroup President.

Daily Support and Resistance

• R3 1.1339
• R2 1.1312
• R1 1.1298

Pivot Point 1.1271

• S1 1.1256
• S2 1.123
• S3 1.1215

EUR/USD– Trading Tip

On Monday, the EUR/USD has violated in a tight range of 1.1243 – 1.1193, which has opened further room for buying until 1.1350. On the lower side, the EUR/USD may find support around 1.1290 and 1.2050. The MACD and RSI are holding in a bullish zone and are supporting the bullish bias in EUR/USD. While the 50 EMA is also supporting bullish bias in the EUR/USD pair, let’s consider taking buying trade in EUR/USD above 1.2565 level today. 

GBP/USD – Daily Analysis

 The GBP/USD closed at 1.24825 after placing a high of 1.24863 and a low of 1.24378. Overall the movement of GBP/USD pair remained bullish throughout the day. The GBP/USD pair moved higher in the risk-on market sentiment after the positive data released from China’s Services sector and continued moving in the same trend to recover some of its previous day’s losses on Friday.

The Caixin Services PMI from China rose to 58.4 in June and indicated growth in the service sector of the second-largest economy of the world. This raised the risk sentiment on the back of increased hopes for sharp V-shaped recovery after China’s positive data. Being a riskier currency pair, the GBP/USD pair moved higher in the market in an improved risk appetite.

On the other hand, the Final Services PMI from Great Britain was released at 13:10 GMT, as 47.1 against the expected 47.0 in June and provided strength to British Pound. The strong GBP pushed GBP/USD further at the ending day of the week.

In the absence of U.S. traders due to bank holiday in the United States, the pair GBP/USD followed the British Pound and Brexit news on Friday.

On Brexit front, Boris Johnson suggested that the prospect of failing to reach a Brexit trade deal before the end of the transition period would be a “very good option” for the U.K.

The remarks from PM Boris Johnson came in after the German Chancellor, Angela Merkel, warned the E.U. to be prepared for the possible failure of Brexit trade talks. She said that the progress in the negotiations and chances to reach a deal were minimal. However, PM Boris Johnson remained positive and optimistic and said that he believed that a good agreement would be reached, but if it failed, then the U.K. will have a very good option of the Australian-style deal.

The European Commissioner for trade, Phil Hogan, has said that the E.U. has not an agreement with Australian, and if the U.K. was seeking an “Australian-style” deal with the bloc, then it was a code for no-deal at all.

Meanwhile, on Saturday, PM Boris Johnson and Kenya’s counterpart, Uhuru Kenyatta, agreed to start negotiations for a post-Brexit trade agreement between the two nations. The talks will be conducted within the Kenya-UK Strategic Partnership Framework established in January and the East African Community parameters.

 Daily Support and Resistance

• R3 1.2657
• R2 1.2574
• R1 1.2524

Pivot Point 1.2441

• S1 1.239
• S2 1.2308
• S3 1.2257

GBP/USD– Trading Tip

The GBP/USD is trading at 1.249 level, and it’s finding immediate support at 1.2478 level. Closing of candles above 1.2478 level can open further room for buying until double top resistance level of 1.2530 level. While, the bullish breakout of 1.2530 level, can drive further buying in Cable until 1.2620 level. The RSI and MACD show bullish bias as the MACD and RSI are holding in a buying zone. Let’s consider taking a buy trades above 1.2441 level today.

USD/JPY – Daily Analysis

The USD/JPY closed at 107/475 after placing a high of 107.565 and a low of 107.434. In the absence of U.S. traders due to U.S. Bank Holiday and economic data from Japan, traders remained confused in the market due to the influence of positive data from economies and the increasing number of coronavirus cases.

The USD/JPY remained confined in a closed range and provided a slightly bearish candle at the ending day of the week due to mixed economic market sentiment. The risk sentiment was improved after the release of economic data about the Caixin Services PMI from China, which indicated an expansion in China’s services sector. 

The Caixin Services PMI rose to 58.1 in June, the highest reading in 2 months. It rose the risk appetite in the market, so the USD/JPY pair rose in the earlier trading session. The U.S. jobs figure was also improved on Thursday with 4.8M job creation in June, this also added in the risk appetite. 

However, the USD/JPY pair started moving in the reverse direction due to an increased number of coronavirus cases from across the world. The U.S. recorded more than 52,000 new cases from its 50 states on Thursday, with Florida alone accounting for over 10,000 of them. The U.S. alone was accounted for around a quarter of 10.8M global coronavirus cases. The U.S. Dollar Index that tracks the U.S. dollar value against the basket of six currencies was down 0.1% at 97.203 and dragged the USD/JPY pair on Friday.

On the US-China front, as we already know that the relation between both nations was further deteriorating over a series of issues including trade, COVID-19 pandemic, Taiwan, and Hong Kong, but on Friday, the U.S. deployed two aircraft carriers on the South China Sea which is considered as a significant show of force.

Furthermore, some reports came in that China was forcing birth control and sterilization in Uighurs to destroy the Muslim population. However, China’s foreign ministry spokesman called this news as fake.

In response to this, 75 members of the U.S. Congress sent a letter to Donald Trump urging the President to make a formal determination on whether China’s attitude towards Uighurs Muslims and other groups constituted an atrocity. These tensions raised US-China ongoing conflict and weighed on the market sentiment, which dragged the USD/JPY pair with itself.

Daily Support and Resistance    

• R3 108.79
• R2 108.48
• R1 107.98

Pivot Point 107.67

• S1 107.17
• S2 106.86
• S3 106.36

USD/JPY – Trading Tips

On Monday, the USD/JPY is trading with a bearish bias of around 107.560. On the two-hourly charts, the USD/JPY is gaining bullish support from the regression channel. Channel is expected to support the USD/JPY pair around 107.420 while crossing below this level can open up further room for selling until 107 and 106.850 level. The 50 EMA will also be supporting the Japanese pair at 107.300 level. However, the MACD and RSI are suggesting selling bias. Let’s keep an eye on 107.400 level to buy above and sell below this level. Good luck! 

A day before, the highly noticed Non-Farm Employment Change from the United States was increased to 4.8M from the expected 3.037M and supported the U.S. dollar. The Unemployment rate from the U.S. in June dropped to 11.1% from the 12.4% forecasted and helped the U.S. dollar. The news side is a bit muted today, and we may see no major even as the U.S. Banks will be closed in the observance of U.S. independence day.

Economic Events to Watch Today 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.12393 after placing a high of 1.13025 and a low of 1.12232. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD pair in its early trading session rose to nearly six days high on the back of increased risk appetite in the market. The increased number of jobs created from the United States in June improved market risk sentiment, which raised riskier currency pair EUR/USD pair. However, the pair failed to extend its gains and started moving in the reverse direction after the release of NFP data from the United States.

The EUR/USD currency pair remained well-supportive ahead NFP data from the U.S. due to increased hopes of renewed jobs that increased risk sentiment. After a better than expected rise in job data, the traders started following the results, which were in favor of the U.S. dollar, and the EUR/USD pair came under pressure.

The investors’ appetite was already up after the global economies’ positive data indicated faster recovery after a sharp earlier contraction. However, the second wave of coronavirus continued its fever around the market and kept a lid on investors’ appetite, which reversed the pair’s bullish trend on Thursday.

Meanwhile, the earlier gains of EUR/USD could also be attributed to the attractiveness of shared currency Euro that was under spot after the gradual reopening of the European economy despite the second wave of coronavirus. The persistent monetary stimulus from the European Central Bank and effective control of the virus spread added strength in Euro.

On data front at 12:00 GMT, the Spanish Unemployment Change in June came in as 5.1K against the forecasted -113.0K and weighed on Euro. At 13:00 GMT, the Italian Monthly Unemployment Rate was dropped to 7.8% from the forecasted 7.9% and supported Euro.

At 14:00 GMT, the Producer Price Index from the whole bloc was dropped to -0.6% in May from the expected -0.4% and weighed on Euro. The Unemployment Rate from Eurozone for May was declined to 7.4% against the expected 7.6% and supported Euro.

The Eurozone’s mixed data failed to provide any specific move to the EUR/USD pair on Thursday so, traders continued to follow the U.S. dollar signals for fresh impetus.

On the other hand, from America, the highly noticed Non-Farm Employment Change from the United States was increased to 4.8M from the expected 3.037M and supported the U.S. dollar. The Unemployment rate from the U.S. in June dropped to 11.1% from the 12.4% forecasted and helped the U.S. dollar. The U.S. dollar strength dragged the rising currency pair EUR/USD in the late session, and hence EUR/USD pair ended its day with a bearish candle.

Daily Support and Resistance

• R3 1.138
• R2 1.1328
• R1 1.1289

Pivot Point 1.1237

• S1 1.1198
• S2 1.1146
• S3 1.1108

EUR/USD– Trading Tip

The EUR/USD is trading in a tight range of 1.1243 – 1.1193, limiting the price action for now. On the lower side, the EUR/USD pair can drop towards 1.1145 level upon the bearish breakout of 1.1193 level, while the bullish breakout of 1.1243 level will allow us to go long. On Friday, the pair may show slow movement in the wake of the U.S. bank holiday. Anyhow, we should look for selling below 1.1295 and buying above 1.1193 level. 

GBP/USD – Daily Analysis

 The GBP/USD pair was closed at 1.24679 after placing a high of 1.25297 and a low of 1.24559. Overall the movement of GBP/USD pair remained flat but slightly bearish throughout the day. The GBP/USD pair extended its previous daily gains and rose near a one-week top on Thursday in early trading hours amid increasing risk sentiment and selling bias around the U.S. dollar.

The increased risk sentiment resulted in the positive momentum around GBP/USD pair after a potential COVID-19 vaccine by the joint efforts from German biotech firm BioNTech and U.S. pharmaceutical giant Pfizer, which gave positive results in its phase1 and phase 2 trials. This, in turn, undermined the demand for safe-haven U.S. dollar and raised GBP/USD pair towards a one-week high level.

The global risk sentiment was further supported by the U.S. monthly jobs report of Non-Farm Payroll. The positive data showed that the coronaviruses worst was probably over, and the hopes for sharp V-shaped recovery again came on board. The intraday profit-taking in GBP/USD was prompted after the risk –on market flow took its pace in the presence of persistent Brexit uncertainties.

In the latest Brexit round of talks, E.U. & U.K. officials failed to make any breakthrough on several vital issues. The negative comment from E.U. negotiator Michel Barnier that there was a still serious gap between Bloc and Britain weighed on GBP/USD pair.

The pair was further dragged in late after the release of a decreased unemployment rate from the U.S., which added strength to the U.S. dollar and dragged the GBP/USD pair with itself. At 17:30 GMT, the Non-Farm Employment Change for June showed that 4.800M jobs were created in one June, which gave strength to the U.S. dollar and dragged the GBP/USD pair from its daily gains. The Unemployment Rate from June also dropped to 11.1% from expected 12.4% and supported the U.S. dollar, which weighed on GBP/USD prices and turned the daily gins in losses.

A meeting between U.K. and E.U. negotiators scheduled for Friday this week has been delayed to next week due to divergence between them. This has raised serious doubts over securing the Brexit deal before the end of the transition period in December. This kept British Pound under heavy pressure and the pair GBP/USD on the downside on Thursday.

Daily Support and Resistance

• R3 1.2657
• R2 1.2574
• R1 1.2524

Pivot Point 1.2441

• S1 1.239
• S2 1.2308
• S3 1.2257

GBP/USD– Trading Tip

The GBP/USD is trading at 1.249 level, and it’s finding immediate support at 1.2478 level. Closing of candles above 1.2478 level can open further room for buying until double top resistance level of 1.2530 level. While, the bullish breakout of 1.2530 level, can drive further buying in Cable until 1.2620 level. The RSI and MACD show bullish bias as the MACD and RSI are holding in a buying zone. Let’s consider taking a buy trades above 1.2441 level today.

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.495 after placing a high of 107.722 and a low of 107.330. Overall the movement of USD/JPY remained bullish throughout the day. At 4:50 GMT, the Monetary Base for the year from Japan surged to 6.0% from the anticipated 4.2% and supported Japanese Yen, which kept a lid on the additional gains in USD/JPY pair.

At 17:30 GMT, the Average Hourly Earnings from the U.S. fell by 1.2% from the expected decline of 0.8% and weighed on the U.S. dollar. The Non-Farm Employment Change added 4.8M jobs in June against the expected 3.037M jobs and added strength in the U.S. dollar, which raised USD/JPY pair.

The Unemployment Rate from the U.S. for June also decreased to 11.1% from the expected 12.4% and supported the U.S. dollar. The Unemployment Claims from the previous week was not in favor of the U.S. dollar as it surged to1.427M against the expected 1.35M. The Trade Balance from the U.S. showed a deficit of 54.6B against the expected deficit of 53.0B and weighed on the U.S. dollar. At 19:00 GMT, the Factory Orders from the U.S. also declined to 8.0% from the expected 8.6% and weighed on the U.S. dollar.

The Non-Farm Payroll data showed a record high number of jobs created in June by the U.S. economy raised risk sentiment in the market after the hopes of sharp V-shaped economic recovery emerged due to a rise in NFP. It raised USD/JPY riskier assets across the board on Thursday, but the gains started to fell after the release of other economic data. The negative reports related to unemployment claims, factory orders, and trade balance from the U.S. exerted pressure on USD/JPY pair on Thursday.

Daily Support and Resistance    

• R3 108.79
• R2 108.48
• R1 107.98

Pivot Point 107.67

• S1 107.17
• S2 106.86
• S3 106.36

USD/JPY – Trading Tips

The USD/JPY is trading with a bearish bias of around 107.560. On the two-hourly charts, the USD/JPY is gaining bullish support from the regression channel. Channel is expected to support the USD/JPY pair around 107.420 while crossing below this level can open up further room for selling until 107 and 106.850 level. The 50 EMA will also be supporting the Japanese pair at 107.300 level. However, the MACD and RSI are suggesting selling bias. Let’s keep an eye on 107.400 level to buy above and sell below this level. Good luck! 

The broad-based U.S. dollar drew offers on the day, possibly due to the modest upbeat trading sentiment backed by the hopes of further stimulus and upbeat outcome of the global PMIs. However, the losses in the greenback could be short-lived or temporary as the second wave of coronavirus continuously picking up pace in the U.S., which boosts the safe-haven demand in the market.

Although, the losses in the U.S. dollar turned out to be one of the key factors that kept a lid on any additional losses in the gold prices as the price of gold is inversely related to the price of the U.S. dollar. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies dropped 0.04% to 97.118 by 11:30 PM. Brace for U.S. NFP figures today.

Economic Events to Watch Today 

EUR/USD – Daily Analysis

The EUR fell below the bottom of our expected 1.1200/1.1270 area recently (low of 1.1183) ere catching back up to 1.1274. Despite the speedy bounce, the skyward drive has slightly improved. Nevertheless, EUR can bind nearer to 1.1290. For now, 1.1330 isn’t expected to challenge this level until the NFP comes out to be negative. Support is at 1.1225 followed by 1.1200

On the data front, at 11:45 GMT, the French Consumer Spending for May increased to 36.6% from the expected 30.0% and supported Euro. The French Prelim CPI for June dropped negative to -0.1% from the forecasted 0.4% and weighed on Euro, which ultimately dragged the EUR/USD pair with itself. At 14:00 GMT, the CPI Flash Estimate for the year increased to 0.3% from the expected -0.1% and supported Euro. The Core CPI Flash Estimate for the year remained flat with the projected 0.8%. The Italian Prelim CPI also remained flat with the expectations of 0.1% in June.

On the other hand, from the United States, the S&P/CS Composite-20 HPI increased to 4.0% from the expected 3.8% and supported the U.S. dollar for the year. At 18:45 GMT, the Chicago PMI dropped to 36.6 from the anticipated 45.0 and weighed on the U.S. dollar. At 19:00 GMT, the C.B. Consumer Confidence rose to 98.1 from the expected 91.6 and supported the U.S. dollar added in the downfall of EUR/USD pair on Tuesday.

The U.S. Fed chairman, Jerome Powell, provided a gloomy and unexpectedly uncertain outlook for the biggest economy of the world, which weighed on the U.S. dollar and supported the EUR/USD currency pair.

Later today, the course of the breakout will probably be determined by the U.S. payrolls release, which is anticipated to confer the economy appended 3,000K jobs in June following May’s 2509K expanding. The unemployment claims, too, are projected to grow to 7.7% in June from 7.3% in May. Meantime, Average Hourly Earnings are supposed to have grown by 5.3% year-on-year in June, indicating a strike from May’s increase of 6.7%. 

Daily Support and Resistance

• R3 1.138
• R2 1.1328
• R1 1.1289

Pivot Point 1.1237

• S1 1.1198
• S2 1.1146
• S3 1.1108

EUR/USD– Trading Tip

The EUR/USD is trading below a strong resistance level of 1.1285 level, closing candles below this level, and suggesting chances of selling bias until the 1.1218 level. Continuation of selling trend under 1.1280 level can extend bearish movement unto 1.1195 level today. Alternatively, a bullish breakout of the 1.1285 level can continue buying until the 1.1350 level. Mixed sentiments play as investors are waiting for the U.S. NFP and Unemployment figures, which are due later today. 

GBP/USD – Daily Analysis

During the Asian session, the GBP/USD takes stairs to 1.2485, up 0.06% on a day, while heading into the London open on Thursday. The Cable lately profited from the U.S. dollar’s lazy moves ahead of the key U.S. jobs announcement for June. Nevertheless, Brexit distress and concerns of more job declines in the U.K. have shielded the quote’s immediate bullish move.

The lack of consensus over the key Brexit concerns forced German Chancellor Angela Merkel to respond, “The European Union (E.U.) obliges to be equipped for the probability that they may not be ready to meet an alliance with the United Kingdom (U.K.).” This major news exhibits the downbeat performance of the EU-UK exit discussions in Brussels. Besides acting as the Brexit-negative sign could be the news from the U.K. Express indicating that higher than 300 EU vessels will be counted as an attack of British waters following no-deal departure.

According to Haldane, the risks of the economic outlook were considerable and two-sided. He added that the risks were more evenly balanced in June than in May and remained skewed. The views that the U.K. economy was on track for V-shaped recovery gave strength to the British Pound and pushed the GBP/USD pair on the upward track.

The strong rebound in the Pound could also be attributed to the little signs of progress on the latest post-Brexit talks. E.U. Negotiator Michel Barnier criticized Britain for choosing not to extend the deadline for the transition period that will end on Dec.31. He also said that Britain was trying to secure as many single markets as possible while showing little compromises on key sticking points, including the level playing field, security, and fisheries.

On the U.S. front, the course of the breakout will probably be determined by the U.S. payrolls release, which is anticipated to confer the economy appended 3,000K jobs in June following May’s 2509K expanding. 

Daily Support and Resistance

• R3 1.2657
• R2 1.2574
• R1 1.2524

Pivot Point 1.2441

• S1 1.239
• S2 1.2308
• S3 1.2257

GBP/USD– Trading Tip

The GBP/USD is trading with a bullish bias as the dollar is getting weaker ahead of the U.S. NFP figures. The GBP/USD is trading at 1.249 level, and it’s finding immediate support at 1.2478 level. Closing of candles above 1.2478 level can open further room for buying until double top resistance level of 1.2530 level. While, the bullish breakout of 1.2530 level, can drive further buying in Cable until 1.2620 level. The RSI and MACD show bullish bias as the MACD and RSI are holding in a buying zone. Let’s consider taking a buy trades above 1.2441 level today.

USD/JPY – Daily Analysis

The Japanese yen saw significant outflows into overseas investments towards the end of the month but could all come back on the risks of a second wave impact on U.S. stocks. Some states in the U.S. have reversed the reopening of economies and closed their businesses on fears of a second wave of coronavirus. The U.S. Federal Reserve Chairman Jerome Powell warned on Tuesday that the second wave of coronavirus outbreak would damage consumer confidence and weaken the economy.

He was cautious that during the second outbreak, the government and people could withdraw again from the economic activity. He added that the worst part of the second wave would be the downward impact on public confidence, which could play a crucial role in getting back to economic activity.

In Republican Arizona, gyms bars, movies, and theatres and water parks were shut down for at least 30 days. These institutions were reopened in middle May, but after the rise in the infected cases across the country, the government announced to shut them down.

The health care professionals in Houston have urged residents to remain at home, wear masks, and cancel gatherings in the wake of intensified virus cases. The residents of Houston also received an emergency alert on their phones to stay home as virus infections have spiked in the town. Later today, the focus will stay on the U.S. NFP to determine further moves in the USD/JPY pair. 

Daily Support and Resistance    

• R3 108.79
• R2 108.48
• R1 107.98

Pivot Point 107.67

• S1 107.17
• S2 106.86
• S3 106.36

USD/JPY – Trading Tips

On Thursday, the USD/JPY is trading with a bearish bias of around 107.560. On the two-hourly charts, the USD/JPY is gaining bullish support from the regression channel. Channel is expected to support the USD/JPY pair around 107.420 while crossing below this level can open up further room for selling until 107 and 106.850 level. The 50 EMA will also be supporting the Japanese pair at 107.300 level. However, the MACD and RSI are suggesting selling bias. Let’s keep an eye on 107.400 level to buy above and sell below this level. Good luck! 

A day before, the U.S. dollar was also supported by the Philly Fed Manufacturing Index, which surged to 27.5 from the expected -23.0. The C.B. Leading Index for May also supported dollar when came in as 2.8% against the .4%. Today, the eyes will remain on the Canadian economic events and E.U. economic summit. Overall, the price action will be driven by the technical levels today.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.12045 after placing a high of 1.12611 and a low of 1.11854. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD pair followed its previous day’s trend and posted losses for 3rd consecutive day on Thursday amid risk-off market sentiment and bleak economic data. The pair extended its losses and dropped to its lowest level near 1.11800 since June 3.

The bearish trend of EUR/USD was supported by the increased demand for the U.S. dollar, which made it strong across the board. U.S. dollar was higher on Thursday amid its safe-haven status, which was buoyed by the multiple factors. The safe-haven market sentiment was supported by the increased fears of coronavirus second wave after the U.S. & China reported an increased number of infection cases from some parts of their country.

The U.S. dollar was also supported by the Philly Fed Manufacturing Index, which surged to 27.5 from the expected -23.0. The C.B. Leading Index for May also supported dollar when came in as 2.8% against the .4%.

However, the losses of EUR/USD were limited after the release of Unemployment Claims from the U.S. that surged to 1.508M against the 1.3M forecasts.

From the Eurozone side, at 13:03 GMT, the Italian Trade Balance in April showed a deficit of 1.16B against the expected surplus of 4.88B. Poor than expected Trade Balance from Italy weighed heavily on the single currency Euro as the difference between expected and actual value was very large.

Despite poor than expected jobless claims, the U.S. dollar index, which measures the U.S. value against a basket of six currencies, rose to 97.4 level. Increased dollar stressed the demand for EUR/USD, and hence, pair fell for 3rd consecutive day.

Furthermore, the European Central Bank issued another trillion million euros to strengthen the economies from the coronavirus pandemic. The offer made by the Central Bank to commercial banks of its ultra-cheap three years loan was taken up by 742 banks on Thursday. Bloomberg reported that a total of 1.31 trillion euros of offers were taken by the banks, which were in line with the predicted range of 1.2T – 1.5T euros.

These loans were carrying below zero interest rates, which means ECB was paying the lenders to lend to households and business people to bolster the economic recovery from the pandemic and cushion the losses.

Daily Support and Resistance

• R3 1.1462
• R2 1.1408
• R1 1.1336

Pivot Point 1.1282

• S1 1.1211
• S2 1.1156
• S3 1.1085

EUR/USD– Trading Tip

On Friday, the EUR/USD pair is trading with a bearish bias, holding below the descending triangle pattern, which can lead EUR/USD prices towards 1.1164 level. On the higher side, the pair may find resistance at 1.1219 level, which is extended by the downward trendline that can be seen on the hourly timeframe. Besides, the leading indicators are mixed; for example, the RSI is suggesting a selling bias, while the MACD is indicating a bullish bias. However, the 50 EMA is in support of selling. Therefore, we can look for selling trade below 1.1219 level today. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.2407 after placing a high of 1.25667 and a low of 1.24014. Overall the movement of GBP/USD pair remained bearish throughout the day. The GBP/USD pair dropped on Thursday and extended its losses for 3rd consecutive day on the back of dovish commentary from BoE and Brexit uncertainties.

On Thursday, the BOE held its monetary policy meeting in which it left the rates unchanged at 0.10% but increased the Quantitative Easing package by100 Billion Pounds. Bank of England dropped its expectations for the U.K.’s economic contraction for Q1 and Q2. In its previous meeting, the Bank of England anticipated that the economy would shrink by 27% in Q1 and Q2. But in the latest meeting on Thursday, BoE issued its expectation for GDP to contract by 20% in the first half of 2020.

The Governor of BoE, Andrew Bailey, said on Thursday that Britain’s economy was recovering a bit faster than Bank thought in the previous month. It could be due to decreased lockdown measures; however, the labor market was mostly providing negative data.

Bailey told reporters that BoE announced an increase of 100 billion pounds around $124 billion in its bond-buying program, but it also slowed the pace of purchases. He added that BoE had plans to stretch its 745 billion pounds bond-buying program. Bailey repeated his previous comments on negative interest rates that they were an option for the Bank as the issue was complex, but given the situation, when banks could afford bond-buying and another stimulus, taking borrowing cost below zero was not going to happen.

The Bank of England also said that it would take further necessary actions to support the economy and boost inflation towards its 2% target.

On Brexit front, the European Union’s Chief executive, Ursula von der Leyen, said on late Wednesday that there would be no post-Brexit trade deal without a level playing field, including everything from state aid to labor to environmental interests. She said that the Bloc would do everything to secure a deal by the end of 2020, but it will not compromise its core values.

Daily Support and Resistance

• R3 1.2695
• R2 1.2632
• R1 1.2529

Pivot Point 1.2465

• S1 1.2362
• S2 1.2298
• S3 1.2195

GBP/USD– Trading Tip

On Friday, the GBP/USD is trading at a level of 1.2430, holding right below support to become a resistance level of 1.2480. The pair is in the oversold zone now, and we may see a slight bullish correction until 1.2465 and 1.2485. But below this, the odds of selling will remain high, and it can lead Sterling lower towards the next support area of 1.2350 level. The RSI and 50 periods of EMA are suggesting a selling bias today. Let’s consider taking selling trades below 1.2450 today.  

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 106.969 after placing a high of 107.127 and a low of 106.655. Overall the movement of USD/JPY pair remained flat but slight bearish throughout the day. The USD/JPY painted a fresh three day low at 106.65 after a short-lived rise toward 107.1 in the beginning session. Japanese Ye was amongst the best performer currencies on Thursday on the back of lower U.S. yields and mixed sentiment.

The U.S. dollar data showed mixed results as jobless claims exceeded the expectations and weighed on the U.S. dollar, but the Philly Fed Manufacturing Index jumped and supported the U.S. dollar.

At 17:30 GMT, the Philly Fed Manufacturing Index for June reported as 27.5 against -23.0. The Unemployment Claims for last week were reported as 1.508M against the expected 1.3M. At 19:00 GMT, the C.B. Leading Index for May surged to 2.8% against the expected 2.4% and supported the U.S. dollar. The U.S. Dollar Index (DXY) surged above 97.44 level and posted weekly high. While U.S. stocks posted losses where Dow Jones was down by 0.15%, and S&P 500 was down by 0.27%.

An FOMC member Loretta Mester gave a speech on Thursday where she said that Fed and Fed longer than expected the road to economic recovery would have to provide additional and continuous support by being very easy on the monetary policy till 2023. The dovish comments exerted downside pressure on the U.S. dollar and ultimately to USD/JPY pair on Thursday.

Some reports suggested Beijing has succeeded in containing the virus after the renewed cases emerged due to ease of lockdown restrictions. Apart from Beijing, many states of America and other countries also send reports about rebuilt virus cases.

The hopes for V shape recovery for the global economy also faded away as the development of the vaccine was needed for that which only can increase the confidence of people against the virus spread.

However, the increased tensions between China & India and North & South Korea on their disputed borders also kept the USD/JPY pair under pressure.

Daily Support and Resistance    

• R3 108
• R2 107.82
• R1 107.57

Pivot Point 107.39

• S1 107.14
• S2 106.96
• S3 106.71

USD/JPY – Trading Tips

The USD/JPY is trading at 106.914 level as it continues trading sideways in a wide trading range of 107.620 – 106.630. It failed to break above an immediate resistance level of 107.580. This level is working as resistance for USD/JPY, and the 50 periods EMA is also prolonging strong resistance at 107.580 zones while immediate support lingers nearby 106.600. The USDJPY bearish trend can trigger a sell-off unto the next support level of the 106.017 level today. Let’s wait for the USD/JPY to test the 107.650 level before entering a sell in the USD/JPY. 

Good luck! 

On the news side, the CPI figures from the U.K. and Canada will be in focus. These may impact the GBP and Canadian related pairs today. Besides, a major focus will remain on the Fed Chair Powell Testimony, while he isn’t expected to do any change with an interest rate, but the recent series of positive data can make dollar bullish.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD closed at 1.12637 after placing a high of 1.13532 and a low of 1.12276. Overall the movement of the EUR/USD remained bearish throughout the day. After touching a daily high of 1.1353 during the European trading hours, the EUR/USD pair reversed its run in the second half of the day and ended its day with losses. The pair moved into a consolidation phase after dropping 100 pips on Tuesday and posted a daily low below 1.1228.

Furthermore, the rising Treasury bond yields during the American session gave strength to the U.S. dollar after the release of U.S. economic data. The Dollar Index also rose along with the Wall Street Journal. The main indexes if WSJ opened a sharp higher and made the market move higher.

From the European side, at 10:59 GMT, the German Wholesale Price Index (WPI) showed a decline of 0.6%against the expected decline of 1.0% and supported Euro. At 11:00 GMT, the German Final CPI came in line with the expectations of -0.1% in May.

At 14:00 GMT, the ZEW Economic Sentiment index also rose to 58.6 from the expected 53.4 and supported Euro. The German ZEW Economic Sentiment also surged to 63.4 from the expected 60.0. During European trading hours, EUR/USD surged above 1.1353 level due to better than expected macroeconomic data release.

Meanwhile, the U.S. economic docket released the U.S. Retail Sales data for May on Tuesday, showing that the Retail Sales in May increased by 17.7% against the expected 5.5% and supported the U.S. dollar. The stronger U.S. dollar dragged the pair EUR/USD towards its daily lows. The U.S. Dollar Index rose by 0.4% on the day near 97.01, and the 10-year U.S. Treasury bond earned around 3.7% near 0.75%.

After the release of U.S. economic data, the EUR/USD pair started to follow and then remained depressive throughout the day. Jerome Powell, the Chairman of Federal Reserve, commented on the data and said that the Sales figure showed an increase in demand. However, Powell stressed that full economic recovery was uncertain until the public had confidence that the COVID-19 pandemic had controlled.

On Wednesday, European traders will look forward to the release of the Consumer Price Index from Europe, and later in the day, Powell’s testimony will continue for the second day of the semi-annual monetary policy report.

Daily Support and Resistance

• R3 1.1462
• R2 1.1408
• R1 1.1336

Pivot Point 1.1282

• S1 1.1211
• S2 1.1156
• S3 1.1085

EUR/USD– Trading Tip

The EUR/USD is trading at 1.1340, having violated the double top resistance level of 1.1280 level. The extension of a bullish trend can lead the EUR/USD prices further higher until the next target level of 1.1330 level. The MACD and RSI are suggesting bullish bias in the pair, and this bullish bias can help traders to capture a quick buy trade over 1.1270 level today until the next target level of 1.1380, only if 1.1330 gets violated. While support stays at 1.1280 and below this, the next support will stay around 1.1267. 

GBP/USD – Daily Analysis

The GBP/USD closed at 1.25722 after placing a high of 1.26873 and a low of 1.25524. Overall the movement of GBP/USD pair remained bearish. The pair in its earlier trading hours on Tuesday moved higher and followed the previous day’s trend and surged to 1.26800 level on the fresh hopes about Brexit negotiations. However, the gains were changed into losses after the concerns related to the second wave of coronavirus infections rose and strengthened the safe-haven U.S. dollar against its main rivals like GBP.

The pair rose on Monday and earlier Tuesday after the optimism surrounding Brexit talks emerged. The U.K. & E.U. committed to approaching the next meeting with new energy and aimed to avoid an unorderly exit from the bloc in December. The Unemployment Rate from the U.K. supported the surge in GBP on Tuesday. The unemployment rate in the U.K. during April decreased from 4.7%of expectations to 3.9% and supported Pound.

However, the pair GBP/USD started to move in the opposite direction after the release of Claimant Count Change that was closely watched by the investors on Tuesday. In May, 528.9K jobless benefits claims made in Great Britain against the expected 405.3K that depressed the GBP and dragged the pair GB/USD with itself.

The U.S. dollar also remained stronger across the board due to multiple factors. One included the better than expected U.S. economic data release included Retail Sales. The Retail Sales in May increased to 17.7% from the expected 5.5% and supported the U.S. dollar.

The strength of the U.S. dollar further dragged the currency pair. The GBP/USD down that day. The fresh concerns about the second wave of coronavirus in China led towards the renewed emergency lockdown after the increasing number of coronavirus cases in Beijing was another reason behind the strength of the safe-haven U.S. dollar on Tuesday was 

The downfall of the GBP/USD pair could also be attributed to the political front where no news came out of the recent round of talks between PM Boris Johnson and E.U. commission.

Later in the week, the Bank of England rate decision will also release in which another massive increase in quantitative easing is expected. There are chances of some talks about negative interest rates by Governor Bailey, given the upside-down condition of the market.

Daily Support and Resistance

• R3 1.2794
• R2 1.2741
• R1 1.2659

Pivot Point 1.2606

• S1 1.2524
• S2 1.2471
• S3 1.2388

GBP/USD– Trading Tip

The GBP/USD is trading at a level of 1.2580, holding right above a next support level of 1.2550. Continuation of a bullish trend requires the cable to break above 1.2585 level first. The 50 periods EMA is weighting on Sterlin gat 1.2585 level while the RSI and MACD are holding in the bearish zone. Although they are very close to crossover into the bullish zone, so we should wait for a bullish breakout before taking a buy trades. By the way, a bullish breakout of 1.2585 level can extend to buying until the next target level of the level of 1.2685, while bearish breakout of 1.2545 level can lead Sterling to be lower towards 1.2475. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.314 after placing a high of 107.639 and a low of 107.210. Overall the movement of the USD/JPY pair remained flat throughout the day. The USD/JPY pair remained range bound and did not give any specific movement on Tuesday as the market mood was mixed due to mixed fundamentals.

The Bank of Japan kept its monetary policy steady on Tuesday and signaled that it had taken enough steps in support of economic growth. BoJ has stuck with its view that the economy will gradually recover from the pandemic. BoJ, in its monetary policy meeting, increased the nominal size of its lending packages for cash strapped firms to $1 trillion from about $700 billion announced last month.

The increased lending program from Japan added strength to the Japanese Yen and dragged the pair USD/JPY on Tuesday. While the Chairman of Federal Reserve Jerome Powell warned on Tuesday that the U.S. economy was facing a deep downturn with significant uncertainty about the time and strength of a recovery. He was worried that the longer the recession would last, the worse the damage would be on the job market and businesses.

Powell, in his testimony to Congress, stresses that the Fed was committed to using its all financial tools to lessen the economic damage from the coronavirus crisis. But he was concerned and said that until the public was satisfied that the virus has been contained, the chances for a full recovery were unlikely. He also warned that a downturn for a longer period could impose severe damage, especially to low-income workers who already have been hit hardest.

Daily Support and Resistance    

• R3 108
• R2 107.82
• R1 107.57

Pivot Point 107.39

• S1 107.14
• S2 106.96
• S3 106.71

USD/JPY – Trading Tips

On Wednesday, the USD/JPY continues to follow previously discussed technical levels. The Japanese pair is trading sideways as it failed to break above an immediate resistance level of 107.580. This level is working as resistance for USD/JPY, and the 50 periods EMA is also prolonging strong resistance at 107.580 zones while immediate support lingers nearby 106.600. The bearish trend in the USD/JPY pair can trigger a sell-off unto the next support level of the 106.017 level today. Let’s wait for the USD/JPY to test the 107.650 level before entering a sell in the USD/JPY. 

Good luck! 

 On Monday, the fears of the renewed spread of virus grew after the U.S. reported more than 2 million coronavirus cases as of June 12, and the infection cases were reported from the most populous states of America. The high level of new infections was reported from California, Texas, and Florida, which raised the possibility of a new wave of COVID-19 and prompted risk aversion.

Risk appetite increased the demand for the U.S. dollar across the board as the bar for renewed restrictions of lockdown raised. Federal Reserve has already announced that the road to economic recovery will be longer than expected, which indicated more need for stimulus packaged from governments.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD pair closed at 1.12563 after placing a high of 1.13403 and a low of 1.12124. Overall the movement of the EUR/USD pair remained bearish throughout the day. At 11:45 GMT, the French Final CPI for May came in as 0.1% against the expected 0.0% and supported Euro. At 13:00 GMT, the Italian Quarterly Unemployment Rate came in as 8.9% against the expected 8.8% and weighed on Euro. At 14:00 GMT, the Industrial Production in April was declined by 17.1% against the forecasted decline of 19.0% and weighed on Euro.

Poor than expected macroeconomic data from Eurozone weighed on shared currency Euro and dragged the pair EUR/USD to one week’s lowest level near 1.1212. On the other hand, the greenback was stronger on Friday, and the U.S. Dollar Index (DXY) jumped to 97.15 level. The strength of the U.S. dollar also added to the downfall of the EUR/USD currency pair at the ending day of the week.

From the American side, at 17:30 GMT, the Import Prices in May were surged by 1.0%, which were previously forecasted to increase by 0.6% and supported the U.S. dollar. At 19:00 GMT, the Prelim UoM Consumer Sentiment increased to 78.9 from the anticipated 75.0 in June and supported the U.S. dollar. The Prelim UoM Inflation Expectations decreased to 3.0% from previous months’ 3.2% in June and supported the U.S. dollar. After better than expected data from the American side, the pair EUR/USD was further dragged down towards its six day’s lowest level.

Furthermore, the Commissioner President of the European Union, Von der Leyen, will meet the Prime Minister of the United Kingdom, Boris Johnson, on Monday to revive the talks related to the post-Brexit deal. So far, there hasn’t been much progress on a free-trade agreement between U.K. & Brussels while there is not much time left to extend the deadline for a deal till end-2020.

However, on Thursday and Friday this week, the E.U. leaders will meet to discuss the proposed recovery fund to overcome the economic damage caused by the pandemic. All members except the Frugal Four I,e Netherland, Austria, Demark, and Sweden, support the recovery fund. All member’s acceptance is needed for the recovery fund to succeed, and any delay will be a major setback for the shared currency Euro.

Daily Support and Resistance

• R3 1.1293
• R2 1.1275
• R1 1.1263

Pivot Point 1.1245

• S1 1.1233
• S2 1.1215
• S3 1.1203

EUR/USD– Trading Tip

The EUR/USD pair is trading at 1.1260 level, having entered into the oversold zone. Today, we can expect bullish correction until 1.1270 and 1.1290 levels, which marks 50% and 61.8% Fibonacci retracement levels. Below these levels, the EUR/USD pair can show selling bias again as the 50 EMA can pressure the pair for selling. On the lower side, support continues to hold around 1.12250 and 1.1208.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.25414 after placing a high of 1.26533 and a low of 1.24735. Overall the movement of GBP/USD pair remained bearish throughout the day. The GBP/USD pair was dropped to its lowest of 8 days on Friday due to mediocre than expected economic data release and U.S. dollar strength. At the ending day of the week, British Pound dropped against the U.S. dollar after the British GDP contracted by a quarter year-on-year in April.

At 11:00 GMT, the Gross Domestic Product (GDP) in April from the United Kingdom was dropped to -20.4% from the expected -18.6% and weighed on GBP. The Manufacturing Production for April also dropped to negative 24.3% from the expectations of -15.0% and weighed on British Pound.

The Industrial Production in April was dropped to -20.3% against the forecasted -15.0% and added in the weight of British Pound. However, at 11:02 GMT, the Goods Trade Balance for April showed a deficit of 7.5B against the forecasted deficit of 11.0B and supported Pound.

At 11:03 GMT, the Construction Output in April was recorder to decline by 40.1% against the forecasted 240% decline and weighed on British Pound. However, the Index of Services was declined by 9.9% against the expected decline of 10.6%.

At 13:30 GMT, the Consumer Inflation Expectations for the United Kingdom were dropped to 2.9% for this quarter from 3.0% of the previous quarter. At 18:08 GMT, the Institute of Economic and Social Research (NIESR) Estimate for GDP in May was -17.6% against the previous months’ -10.3%. At 18:30 GMT, the C.B. Leading Index for April was dropped by 2.9% from the previous month’s 1.2%.

The poor-than-expected macroeconomic data from Great Britain exerted negative pressure on British Pound and dragged the pair to its one week’s lowest level below 1.2500 level.

Apart from negative macroeconomic data, the uncertainty surrounding Brexit also weighed on British Pound on Friday ahead of the PM Boris Johnson’s video conference with European Council President Charles Michel, European Commission President, Ursula von der Leyen and European Parliament President David Sassoli on Monday.

The lack of progress in Brexit talks with Brussels and the calls to review the policy options, including negative interest rates by BoE has also been lagging in the recovery of Pound. Ahead of the BoE meeting, it has already been confirmed on Friday that U.K.’s economy has contracted by 20.4% in April. This means that BoE will likely announce further easing in its policy next week. The current purchase plan of BOE comprises 200 Billion GBP, which is likely to extend further in the next meeting.

Furthermore, the latest round of talks with Brussels failed to deliver any significant progress in the post-Brexit trade deal, which has raised the odds for a no-deal exit from the E.U. As the transition period will expire on January 1, 2021.

On the other hand, from the American Side, the Prelim Consumer Sentiment from the University of Michigan increased in June to 78.9 from the expected 75.0 and supported the U.S. dollar. The U.S. dollar was already strong in the market, and after this release, it exerted even more pressure on the GBP/USD pair.

Daily Support and Resistance

• R3 1.2593
• R2 1.2568
• R1 1.2538

Pivot Point 1.2512

• S1 1.2482
• S2 1.2456
• S3 1.2426

GBP/USD– Trading Tip

The GBP/USD pair is trading with a bearish bias at a depth of 1.2470, following a downward channel extending resistance around the value of 1.2540. On the 4 hour timeframe, the Cable has entered the oversold zone as we can see the RSI and MACD both were holding below 20 and below 0 levels, respectively. On the lower side, the Cable may find initial support at a level of 1.2385 after the violation of 1.2455 level. On the higher side, the GBP/USD prices may find resistance at 1.2543 area today. Let’s consider sell positions below 1.2450 level. 

USD/JPY – Daily Analysis

The USD/JPY was closed at 107.353 after placing a high of 107.552 and a low of 106.583. Overall the movement of USD/JPY remained bullish throughout the day. The USD/JPY gained strength after posting losses for the previous four consecutive days. The stronger U.S. dollar and negative macroeconomic data release from Japan might have added in the strength of this pair USD/JPY.

At 9:30 GMT, the Revised Industrial Production from Japan in April was declined by 9.8% against the forecasted 9.1% and weighed on Japanese Yen and moved the pair USD/JPY in the upward direction on Friday.

The brighter market sentiment due to come back of risk appetite in the market after the possibility of renewed lockdowns increased due to increased fears over the second wave of coronavirus outbreak.

The fears of the renewed spread of virus grew after the U.S. reported more than 2 million coronavirus cases as of June 12, and the infection cases were reported from the most populous states of America. The high level of new infections was reported from California, Texas, and Florida, which raised the possibility of a new wave of COVID-19 and prompted risk aversion.

Risk appetite increased the demand for the U.S. dollar across the board as the bar for renewed restrictions of lockdown raised. Federal Reserve has already announced that the road to economic recovery will be longer than expected, which indicated more need for stimulus packaged from governments.

However, the U.S. Dollar Index was up to 97 levels on Friday, and the strength of the U.S. dollar pushed the USD/JPY pair above 107.5 level.

Another factor aiding in the U.S. dollar’s strength was better than expected macroeconomic data from the USA. At 19:00 GMT, the Prelim Consumer Sentiment from the University of Michigan (UoM) surged to 78.9 in June from the expected 75.0 and supported the U.S. dollar. The Import Prices in May also increased by 1.0% from 0.6% of forecast and supported the U.S. dollar. The Prelim UoM Inflation expectation in June was reported as 3.0%.

Daily Support and Resistance    

• R3 107.93
• R2 107.75
• R1 107.54

Pivot Point 107.36

• S1 107.15
• S2 106.97
• S3 106.75

USD/JPY – Trading Tips

The USD/JPY pair fell sharply after violating the upward channel, which supported the pair around 107.500. For now, this level is working as resistance for USD/JPY. The 50 periods EMA is also extending strong resistance at 107.650 area while immediate support stays around 106.600. The bearish trend in the USD/JPY pair can trigger a sell-off until the next support level of the 106.017 level today. Let’s wait for the market to test the 107.650 level before entering a sell in the USD/JPY today. 

Good luck! 

On the news front, the market will be focusing on the Eurogroup meeting, which is usually held in Brussels and attended by the Eurogroup president, Finance Ministers from euro area member states, the Commissioner for economic and monetary affairs, and the President of the European Central Bank. The agenda will be to discuss upcoming policies considering the economic slowdown driven by the coronavirus. Besides, the U.S. Unemployment Claims will also remain in the highlights today.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.13753 after placing a high of 1.14222 and a low of 1.13214. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD pair rose to its three months highest level on Wednesday after the Federal Reserve’s monetary policy decision. The currency pair crossed the level of 1.1400 on the back of broad-based U.S. dollar weakness that day.

The Fed left its interest rates unchanged at 0-0.25% on Wednesday and projected a contraction of 6.5% this year along with the unemployment reaching 9.3% for this year. Furthermore, the bank has shown its commitment to support the credit flow to household and business by increasing its Treasury security purchases.

Though negative interest rate was not expected from the Fed but taking the pledge to keep the interest rates at low near zero until market participants did not expect 2022, this moved the investors to sell the U.S. dollar, which in turn gave a push to EUR/USD pair.

Adding in the upward movement of EUR/USD pair on Wednesday was the poor than expected economic data from the U.S. At 17:30GMT, both CPI & Core CPI readings from the U.S. came in as -0.1% against the expected 0.0% during May and exerted pressure on the U.S. dollar. AT 23:00 GMT, the Federal Budget Balance showed a deficit of 398.8B against the expected deficit of 580.0B and weighed on the U.S. dollar.

The broad-based U.S. dollar weakness pushed EUR/USD pair above 1.1400 level on Wednesday. While the U.S. Dollar Index also fell to 3 months low against its rival currencies. U.S. stocks also turned negative and posted losses on Wednesday.

On the other hand, at 11:45 GMT, the French Industrial Production was dropped by -20.1%against the expected -10.0% during April and weakened Euro. Furthermore, On Wednesday, the European Commission said that Russia and China were running targeted influence operations and disinformation campaigns in the European Union and its neighborhood and also around the globe.

Daily Support and Resistance

• R3 1.1522
• R2 1.1473
• R1 1.1422

Pivot Point 1.1372

• S1 1.1321
• S2 1.1271
• S3 1.122

EUR/USD– Trading Tip

The EUR/USD continues to trade sideways in a narrow trading range of 1.1400 – 1.1348 level, and right now, it seems to test the lower boundary of this range. On the lower side, the next target level appears to be 1.1270. Currently, the pair is facing immediate support around 1.1340 level, and closing of candles above this level may lead the EUR/USD prices to further lower towards 1.1400. The 50 EMA is also suggesting a bullish bias for the EUR/USD pair as the pair has closed a Doji candle right above the EMA. On the higher side, a violation of 1.1400 resistance can lead to EUR/USD prices until 1.1465. Odds of bullish bias remains solid today.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.27457 after placing a high of 1.28130 and a low of 1.27060. Overall the movement of GBP/USD pair remained bullish throughout the day. The currency pair GBP/USD continued its bullish trend for the 10th consecutive day and maintained its bullish streak on Wednesday on the back of the latest monetary policy decision by Federal Reserve.

On Wednesday, the U.S. Fed announced its monetary policy decision in which it held its interest rates on the same level near zero and did not go for negative interest rates. However, the Fed also announced to hold the interest rates at the same level until the end of 2022. Federal Reserve also announced that over the coming months, it would increase the holdings of Treasury securities and agency residential and mortgage-backed securities at the current level to support the credit flow to households and businesses. This all was decided to sustain smooth market functioning and defend the U.S. economy.

Additionally, the Open market Desk will continue to offer large-scale overnight and term repurchase agreement operations. The Committee will keep a close eye on market conditions to adjust its plans as needed.

The DXY fell off from 96 levels and was down by 0.5% on Wednesday, the dovish statement from Fed weighed on the U.S. dollar and hence, GBP/USD pair reached near 3-months highest level.

On the other hand, Brexit trade negotiations did not go well between the U.K. and Brussels, and the U.K. wanted to reach an agreement with the E.U. this year. There are no chances of even any progress in trade talks with the deadline to seek an extension coming closer day by day.

According to the boss of the U.K.’s most influential business group, the CBI, U.K.’s economy was not ready to withstand the additional disruption of no-deal Brexit. The furlough scheme and grants will end at once, and then thousands of businesses and millions of jobs will likely hit the water. A CBI member, Carolyn Fairbairn, said that British firms do not have the resilience to cope with leaving the European Union without any deal after the losses of the coronavirus crisis.

On Wednesday, GBP/USD prices rose above the level of 1.27710 but dropped below it and continued moving in a confined range. The surge in prices was due to the broad-based U.S. dollar weakness after the Fed’s statement and economic data release. At 17:30, The CPI & Core CPI for May from the U.S. showed a decline of 0.1% against the expected 0.0% and weighed on the U.S. dollar. The weak dollar pushed GBP/USD pair on the higher level.

Daily Support and Resistance

• R3 1.2912
• R2 1.2863
• R1 1.2804

Pivot Point 1.2755

• S1 1.2696
• S2 1.2647
• S3 1.2588

GBP/USD– Trading Tip

The GBP/USD pair is trading with a bearish bias at 1.2650 level ever since it has violated the upward channel on the lower side. On the 4 hour timeframe, the Cable has closed a strong bearish engulfing candle, which suggests a dominance of sellers in the market as this can trigger selling until 1.2625 level. Immediate support can be found around 1.2625, while a breakout of this can trigger more selling until the next support level of 1.2582 level. Let’s look for selling trades below 1.2690 level today. 

USD/JPY – Daily Analysis

 The USD/JPY pair was closed at 107.123 after placing a high of 107.872 and a low of 106.987. Overall the movement of the USD/JPY pair remained bearish that day. AT 4:50 GMT, the Core Machinery Orders from Japan for April dropped to -12% against the expected -7.5% and weighed on Japanese Yen. The PPI for the year from Japan was declined by 2.7% against the expected decline of 2.4% and exerted pressure on JPY.

On the other hand, at 17:30 GMT, the CPI and the Core CPI during May from the United States was dropped to -0.1% from 0.0% of expectations and weighed on the U.S. dollar. The Federal Budget Balance for April was declined by 398.8B against the expected 580.8B.

The poor than expected CPI & Budget data from the United States on Wednesday weighed on the U.S. dollar, which dragged down the USD/JPY pair with itself. Furthermore, the dovish statement from the Federal Reserve will keep its interest rates on hold at a level near zero until the end of 2022. U.S. economy was not in good condition, and the projections made by the Fed about the economic contraction this year was 6.5% and of unemployment to be raised by 9.3.

Fed reduced its interest rates in March to near zero amid coronavirus crisis and said that until the economy was back on track Federal Reserve has pledged to maintain low rates. Fed has provided trillions of dollars to its financial system, Treasury purchases to support business, state, and local governments. It also started a new program to lend to small, medium-sized firms. Wall Street, major indices such as the S&P 500 and Dow Jones Industrial Average were negative that day, and the U.S. dollar index also fell to fresh three months low against major currencies.

Daily Support and Resistance    

• R3 108.58
• R2 108.23
• R1 107.67

Pivot Point 107.33

• S1 106.77
• S2 106.43
• S3 105.87

USD/JPY – Trading Tips

The USD/JPY is trading sharply bearish below 107.100 level, having violated the upward trendline at 107.600. Below this, the pair has a great potential to go for a 107.08 level, while a bearish breakout of 107.082 can dip further until 106.770. On the 4 hour chart, the MACD, and RSI, both are holding in the selling zone, demonstrating that there’s further room for selling in the USD/JPY pair. Let’s consider taking selling trades below 107.33 today. Good luck!