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Forex Signals

AUD/USD Bearish Engulfing Candle – Is It Good Time to Sell?

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During Tuesday’s early European trading session, the AUD/USD currency pair snapped its previous two-day losing streak and caught some fresh bids around above 0.7700 level mostly due to the recent upticks in S&P 500 index, which tend to underpin the perceived risk currency Australian dollar and contributes to the currency pair gains. Hence, the market trading sentiment was being supported by the optimism over the rollout of COVID-19 vaccines and hopes for additional U.S. fiscal stimulus measures. 

Across the pond, the broad-based U.S. dollar bearish bias, triggered by multiple factors, also played its major role in strengthening the currency pair. In contrast to this, the long-lasting coronavirus distress globally keeps questioning the market’s upbeat mood, which could cap gains for the currency pair. At this time, the AUD/USD currency pair is currently trading at 0.7710 and consolidating in the range between 0.7672 – 0.7725.

The market trading sentiment has been gaining positive traction since the day started and was being supported by the optimism over the rollout of COVID-19 vaccines and hopes for additional U.S. fiscal stimulus measures. As per the latest report, the U.S. President-elect Joe Biden is prepared to take office on January 20, pushing for the $1.9 trillion stimulus package already outlined last week. In the meantime, the Treasury Secretary nominee Janet Yellen is also expected to push the government to “act big” with its next coronavirus relief package when she testifies before the Senate later on Tuesday. Hence, the prevalent upbeat market mood underpinned the Australian dollar’s perceived risk currency and contributed to the currency pair gains.

At the USD front, the broad-based U.S. dollar failed to gain any positive traction during the early European trading hours amid risk-on market sentiment. Apart from this, the greenback losses could also be associated with the low-interest record rates’ expectations. Conversely, the expectations of a larger government borrowing recently triggered a fresh leg up in the U.S. Treasury bond yields, which might help the U.S. dollar limit any meaningful downside. However, the losses in the U.S. dollar pushed the currency pair higher. The U.S. Dollar Index that tracks the greenback against a bucket of other currencies dropped by 0.11% to 90.653 by 11:03 PM ET (4:03 AM GMT). 

On the bearish side, the long-lasting worries about the continuous surge in new COVID-19 cases challenging the upbeat market sentiment and turned out to be one of the key factors that kept the lid on any additional gains in the currency pair. Furthermore, the cautious sentiment ahead of President-elect Joe Biden’s inaugural ceremony also probes the bulls.

In the absence of high impact economic events from the U.S., the U.S. Treasury Secretary nominee Janet Yellen’s testimony will influence the USD price dynamics. Meanwhile, the broader market risk sentiment could produce some short-term trading opportunities around the currency pair.


Daily Support and Resistance

S1 0.7606

S2 0.7642

S3 0.7662

Pivot Point 0.7679

R1 0.7698

R2 0.7715

R3 0.7752

The AUD/USD is trading at 0.7709 level holding below an immediate resistance level of 0.7725. The recent closing bearish engulfing candles can trigger odds of selling bias in the AUD/USD pair. However, we are not taking a sell trade yet, as the 50 periods EMA and MACD is staying in a bullish zone. Let’s keep an eye on the 0.7722 level as selling can be expected below this level along with buying over the 0.7722 mark. Good luck! 

 

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Forex Market Analysis

Daily F.X. Analysis, January 15 – Top Trade Setups In Forex – U.S. Retail sales in Focus!

On the news front, it’s going to be a busy Friday as the U.K. economy is due to release its GDP figures, which are expected to perform negatively, and this may add selling pressure on the Sterling. Later during the U.S. session, the U.S. retail sales may drive further price action in the dollar related pairs.

Economic Events to Watch Today  


EUR/USD – Daily Analysis

During Friday’s early Asian trading hours, the EUR/USD currency pair failed to stop its overnight losing streak and still trades in a sideways manner around below the 1.2150 marks due to the risk-off market sentiment underpinned the U.S. dollar and contributed to the currency pair gains. Besides this, the selling bias around the currency pair could also be attributed to the ever-increasing COVID-19 and tougher lockdown restrictions in the U.K. and Europe, which raised further doubts over the European economies and pushed the shared currency down. The declines in the EUR/USD currency pair were unaffected by the latest positive announcement from U.S. President-elect Joe Biden regarding the stimulus package. Currently, the EUR/USD currency pair is currently trading at 1.2144 and consolidating in the range between the 1.2143 – 1.2163. Moving on, the market traders seem reluctant to place any strong position ahead of European Trade Balance and French Final CPI m/m.

Besides, the new wave of the coronavirus in the U.K. and resulting in tighter travel restrictions in Europe and the U.K. keep fueling the fears over slower economic recovery as back to back lockdown restrictions tend to have an instant negative effect on economic activities, which in turn, added bearish pressure around the currency pair. As per the latest report, France recently introduced a new nationwide lockdown, while German Chancellor Merkel reportedly wants to toughen the German lockdown. Apart from this, approximately 22M people are currently under strict lockdown conditions in China’s Hebei province. This happened right after the country posted the largest number of new Covid-19 infections in over 5-months on Wednesday. This, in turn, exerted downside eight on the market risk tone and contributed to U.S. dollar gains.

As in result, the broad-based U.S. dollar managed to stop its overnight losses and edged higher during the Asian session on the day amid risk-off market sentiment. However, the U.S. dollar bullish bias was rather unaffected by the worsening coronavirus (COVID-19) conditions in the U.S., or U.S. stimulus talks progress, which tend to undermine the U.S. currency. However, the gains in the U.S. dollar kept the currency pair lower. 

Looking forward, the market players will keep their eyes on the release of U.S. Core Retail Sales m/m along with Retail Sales m/m. The French Final CPI m/ma and Trade Balance will also be closely followed. Meanwhile, the UK GDP m/m and Goods Trade Balance are also expected to release later on the day. Across the ocean, the updates surrounding the Sino-US tussle and virus woes could not lose their importance on the day.


Daily Technical Levels

Support   Resistance

1.2148      1.2178

1.2129      1.2189

1.2118      1.2208

Pivot Point: 1.2159

EUR/USD– Trading Tip

On Friday, the market’s technical side remains mostly unchanged as the EUR/USD continues to gain support at the 1.2136 level, and breaking of this can trigger an additional dip until 1.2105 and 1.2065 level. On the upside, the EUR/USD pair may find resistance at the 1.2170 level, and a bullish breakout of this level can extend the buying trend to 1.2220. The RSI and MACD have shifted their selling trends; therefore, we may see further sell-off upon the bearish breakout of 1.2136 level today.


GBP/USD – Daily Analysis

The GBP/USD During Friday’s early Asian trading session, the GBP/USD currency pair failed to maintain its overnight bullish bias and drew some offers around the 1.3680 level mainly due to the downbeat market trading mood, which underpinned the U.S. dollar bullish and contributed to the currency pair losses. Besides this, the selling bias around the currency pair could also be associated with the ever-rising numbers of COVID-19 and tougher lockdown restrictions in the U.K., which keep raising doubts over the economic recovery. In contrast to this, the latest reports suggest that the Bank of England (BOE) will keep the interest rates unchanged at least until 2024 to avoid negative rates, which helped the currency pair limit its losses. Also capping the losses could be the latest optimism around the coronavirus better situation in the U.K. Currently, the GBP/USD currency pair is currently trading at 1.3687 and consolidating in the range between the 1.3675 – 1.3699. Moving on, the market traders seem reluctant to place any strong position ahead of UK GDP m/m and Goods Trade Balance data.

Despite the ongoing optimism about a potential treatment/vaccine and U.S. coronavirus (COVID-19) stimulus bill, the market risk mood failed to stop its previous bearish performance and remained red amid growing market worries over the potential economic byproduct from the continuous rise in new COVID-19. The ongoing downfall around the equity market was completely sponsored by the fears of intensifying coronavirus (COVID-19) conditions throughout the world, which keeps fueling the doubts over the global economic recovery from COVID-19. 

Besides the virus woes, the reason for the bearish trading sentiment could also be associated with the long-lasting US-China tussle, which is continuously picking pace after U.S. President Donald Trump imposed new sanctions on Chinese officials and companies. All these events have been weighing on the market trading sentiment and were seen as major factors that kept the U.S. dollar prices higher.

As in result, the broad-based U.S. dollar managed to stop its overnight losses and edged higher during the Asian session on the day amid fresh risk-off market sentiment. However, the U.S. dollar gains were relatively unaffected by the worsening coronavirus (COVID-19) conditions in the U.S., or U.S. stimulus talks progress, which tend to undermine the U.S. currency. The U.S. President-elect Joe Biden recently revealed a much-anticipated coronavirus stimulus plan and promised to deliver $2,000 in stimulus cheques to Americans, infrastructure spending, social equity, and a potential minimum wage of $15 per hour. Unfortunately, Biden’s stimulus talk has failed to inject volatility in the forex markets so far. However, the gains in the U.S. dollar kept the currency pair lower. 


Daily Technical Levels

Support   Resistance

1.3555      1.3722

1.3445      1.3781

1.3387      1.3890

Pivot Point: 1.3613

GBP/USD– Trading Tip

The GBP/USD pair also trades sideways between a narrow trading range of 1.3703 – 1.3632. On the higher side, a bullish breakout of 1.3703 level can extend the buying trend until the next resistance area of 1.3744 and 1.3786. Conversely, a bearish breakout of 1.3632 support level can extend the selling trend until 1.3550. 


USD/JPY – Daily Analysis

During Friday’s early European trading session, the USD/JPY currency pair succeeded to maintain its bullish bias and to take rounds around above mid- 103.00 regions mainly due to the market’s downbeat mood and a strong rally in the U.S. bond yield, which kept the U.S. dollar bullish and contributed to the currency pair gains. However, the market trading sentiment was being pressured by the ever-rising numbers of COVID-19 and stricter lockdown restrictions throughout the world, which keeps fueling doubts over the global economy’s recovery. Meanwhile, the equity markets’ slumps were further bolstered by the renewed Sino-US tussle, which extended some support to the safe-haven Japanese yen and capped the upside for the USD/JPY currency pair. Conversely, the optimism about a potential treatment/vaccine and U.S. coronavirus (COVID-19) stimulus bill keeps challenging the market risk-off mood, which might change the direction for the USD/JPY currency pair. Currently, the USD/JPY currency pair is currently trading at 103.78 and consolidating in the range between 103.70 – 103.85.

The market trading sentiment failed to stop its early-day negative performance and remained pessimistic during the Asian trading session. The downfall was completely sponsored by the fears of intensifying coronavirus (COVID-19) conditions throughout the world, which keeps fueling the doubts over the global economic recovery from COVID-19. As per the latest report, France recently imposed a new nationwide lockdown, while German Chancellor Merkel is considering toughening the German lockdown. Apart from this, nearly 22M people are currently under strict lockdown conditions in China’s Hebei province. This happened right after the country posted the largest number of new Covid-19 infections in over 5-months on Wednesday. 

Besides the virus woes, the reason for the bearish trading sentiment could also be associated with the long-lasting US-China tussle, which is still not showing any sign of slowing down. The reason could be associated with the reports suggesting that the Trump administration is imposing sanctions on officials and companies for alleged misdeeds in the South China Sea and imposing an investment ban on 9 more Chinese firms with alleged ties to the Chinese military, including planemaker Comac and phone maker Xiaomi (OTC: XIACF) Corp. However, all these factors have been weighing on the market trading sentiment, which was seen as major factors that kept the U.S. dollar prices higher.

As in result, the broad-based U.S. dollar managed to extend its early-day gains and remained bullish on the day amid prevalent risk-off market sentiment. However, the gains in the U.S. dollar were rather unaffected by the U.S. stimulus progress, which tends to undermine the U.S. currency. It is worth noting that the U.S. President-elect Joe Biden promised to deliver $2,000 in stimulus cheques to Americans, infrastructure spending, social equity, and a potential minimum wage of $15 per hour. Unfortunately, this positive talk has failed to inject volatility in the forex markets so far. Notably, the gains in the U.S. dollar could be short-lived or temporary as the Fed Chairman Jerome Powell said that the time to raise the interest rates is no time soon. However, the ongoing bullish bias around the greenback kept the currency pair higher.

Looking forward, the market players will keep their eyes on the release of U.S. Core Retail Sales m/m along with Retail Sales m/m. Apart from this, the French Final CPI m/ma and Trade Balance will also be closely followed. At home, the UK GDP m/m and Goods Trade Balance are also expected to release later on the day. Across the ocean, the updates surrounding the Sino-US tussle and virus woes could not lose their importance on the day.


Daily Technical Levels

Support   Resistance

103.53      104.16

103.31      104.56

102.91      104.78

Pivot Point: 103.94

USD/JPY – Trading Tips

The safe-haven currency pair USD/JPY slipped to trade at 104.054 level amid increased demand for safe-haven assets. The USD/JPY has formed an upward channel on the 4-hour timeframe, and it has the chance of leading the pair towards the next resistance level of 104.340 level. The 50 periods EMA supports the bullish trend, and we may have odds of taking a buying trade over the 103.570 level today. Good luck! 

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Forex Market Analysis

Daily F.X. Analysis, January 14 – Top Trade Setups In Forex – U.S. Fed Chair Powell Speech in Focus! 

The eyes will remain on the ECB Monetary Policy Meeting Accounts due during the late European session on the data front. Alongside, the U.S. Unemployment Claims and Fed Chair Powell Speaks will remain in highlights today.

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD closed at 1.21577 after placing a high of 1.22226 and a low of 1.21396. The U.S. dollar recovered on Wednesday and weighed on EUR/USD pair that resulted in losses for another day. On Tuesday, the benchmark 10-year Treasury yields fell nearly seven basis points from a 10-month high hit on the day following strong demand at a $38 billion 10-year auction and comments from the U.S. Federal Reserve officials reiterating that monetary policy was going to stay supportive. 

The sharp rise in the U.S. yields resulted from the bond-market sell-off triggered by the rising hopes for massive stimulus measures largely funded by government borrowing after the Democrats claimed the Senate in Georgia runoff elections. 

At 12:00 GMT, the German WPI for December raised to 0.6% against the expected 0.1% and supported Euro on the data front. At 14:00 GMT, the Italian Industrial Production for November dropped to -1.4% against the expected -0.4% and weighed on Euro. At 15:00 GMT, the Industrial Production for November also raised to 2.5% against the expected 0.2% and supported Euro. From the U.S. side, at 18:30 GMT, the Consumer Price Index for December remained unchanged at 0.4%. The Core CPI for December also came in line with the forecasts of 0.1%. The European Central bank President Christine Lagarde called on Wednesday for global regulation of Bitcoin, saying that the digital currency had been used for money laundering activities in some instances and that any loopholes needed to be closed. The largely anonymous nature of cryptocurrencies has raised the concerns that they could be used for money laundering and other legal activities.

On Wednesday, the Federal Reserve Governor Lael Brainard said that unemployment for the lowest-paid workers in the U.S. was above 20%, and it underscores the importance of policy help for the economy. Brainard said that the figure indicated how uneven the recovery has seen since efforts to control the coronavirus pandemic resulted in the biggest quarterly GDP drop since the Great Depression. She also said that the level highlighted the need for accommodative policy, but she stated that it was too early to say how long Fed’s measures will stay in place. These comments from Brainard added strength to the U.S. dollar and added losses in EUR/USD pair on Wednesday.

Meanwhile, the losses in EUR/USD pair were extended after the German Chancellor Angela Merkel wanted to extend the current lockdown in Europe’s largest economy through the end of March. Extending the lockdown will hurt the Eurozone’s economy that could drag it to a double-dip recession, and it weighed on the local currency Euro that ultimately added weight on EUR/USD pair on Wednesday. Furthermore, On Wednesday, the House voted in favor of impeachment against Donald Trump, and he became the first U.S. President to be impeached twice. The House voted to impeach Trump on incitement of insurrection after the President incited a violent crowd to storm the Capitol last week, ultimately resulting in five deaths. These developments kept the safe-haven greenback under demand and added further losses in EUR/USD pair.

Daily Technical Levels

Support   Resistance

1.2148       1.2178

1.2129      1.2189

1.2118      1.2208

Pivot Point: 1.2159

EUR/USD– Trading Tip

The EUR/USD is gaining support at the 1.2136 level, and violation of this can cause further dip until 1.2105 and 1.2065 level. On the higher side, the EUR/USD pair may face resistance at the 1.2170 level, and a bullish breakout of this level can prolong the buying trend until 1.2220. The RSI and MACD have shifted their selling trends; therefore, we may see further sell-off upon the bearish breakout of the 1.2136 level today.


GBP/USD – Daily Analysis

The GBP/USD closed at 1.36364 after placing a high of 1.37010 and a low of 1.36115. The GBP/USD pair dropped on Wednesday after British Pound started trimming its previous daily gains amid the U.S. dollar recovery. The greenback recovered strength, and the DXY rose back to the area of the daily high near 90.30. The gains were modest as Wall Street trades mixed and despite the decline in the U.S. treasury. The 10-year U.S. Treasury yield fell to 1.09%, its lowest since January 8. 

After the third national lockdown in the U.K. was announced last week, there had been speculations that the Bank of England (BoE) could introduce negative interest rates to help support the economy, which proved negative for the British Pound. However, following Tuesday’s comments from Bank of Governor Andrew Bailey, which ended the speculation, Sterling has since rallied and continued to find support from markets. Furthermore, the British Pound also rose as Home Secretary Priti Patel addressed the nation and said that the current lockdown restrictions were strict enough, claiming investors who had been worried that tougher restrictions could have been announced to tackle rising infection rates. 

The prospects of new restrictions added weight to the local currency, and it was further supported by the comments from the Scottish Minister, who announced further restrictions. Nicola Sturgeon urged people to minimize their interaction and keep in mind that the virus was there with everyone. He said that people should assume that they have the virus or any person they were in contact with and urged the public to prevent it from spreading by following the rules and SOPs. The rising number of coronavirus cases and imposed lockdowns in the nation added weight to the local currency Sterling, which ultimately added the GBP/USD pair’s losses.

The U.S. Inflation rate and the rising U.S. Treasury yields helped and supported the U.S. dollar supported due to its safe-haven status from the rising number of coronavirus cases U.S. fiscal stimulus speculations. The rising demand for the U.S. dollar added in the losses of the British Pound to the U.S. Dollar exchange rate and dragged it down on Wednesday.

For Cable investors, any coronavirus developments will remain in focus for the end of the week, with success in the rollout of vaccines seen as British Pound positive. Sterling investors will also be watching Friday’s U.K. growth data, which could weaken the GBP/USD exchange rate. 

The British Pound investors will also be looking to Federal Reserve officials over the coming days, with Fed chair Jerome Powell speaking and indicating that U.S. monetary policy will be kept loose and the U.S. dollar is likely to struggle further. Greenback investors will also be focusing on Friday’s initial jobless claims that could also disappoint the traders.

Daily Technical Levels

Support   Resistance

1.3555      1.3722

1.3445      1.3781

1.3387      1.3890

Pivot Point: 1.3613

GBP/USD– Trading Tip

The GBP/USD is trading at 1.3692, and it has closed a Doji candle on the four hourly timeframes, and it may extend a bearish correction in the GBP/USD pair. On the lower side, the support stays at 1.3636 and resistance at 1.3692 and 1.3720 today. The GBP/USD pair’s 10 & 20 periods EMA is supporting bullish bias in the Sterling. The MACD and RSI support bullish bias; therefore, bullish bias dominates over the 1.3646 level today.


USD/JPY – Daily Analysis

The USD/JPY pair closed at 103.869 after placing a high of 103.995 and a low of 103.523. The pair refreshed daily tops on Wednesday, reversed an intraday dip near a one-week low, and recovered a quarter of the previous day’s losses. The U.S. Dollar demand rose on Wednesday amid the retracement slide from a 10-month high hit of U.S. treasury yield on a 10-year note that ultimately added to the USD/JPY pair’s upward momentum. The U.S. dollar was also high onboard amid the risk-off market sentiment on Wednesday due to increased infection cases and imposed lockdowns worldwide.

The Benchmark 10-year Treasury yields fell nearly seven basis points from a 10-month high hit on Tuesday following strong demand at a $38 billion 10-year auction. The comments from U.S. Federal Reserve officials stating that monetary policy would stay supportive also helped the U.S. dollar regain its strength and support the USD/JPY pair’s gains on Wednesday.

On the data front, at 04:50 GMT, the M2 Money Stock for the year from Japan remained flat at 9.2%. At 10:58 GMT, the Prelim Machine Tool Orders from Japan raised in December to 8.7% against November’s 8.6%. . From the U.S. side, at 18:30 GMT, the Consumer Price Index for December remained unaffected at 0.4%. The Core CPI for December also came in line with the projections of 0.1%.

The Kansas City Fed President Esther George has said that she does not expect the Fed to react if inflation exceeds the central bank’s 2% goal. Earlier in the month, the Democrats claimed the Senate after the runoff elections in Georgia that raised hopes for larger stimulus measures funded by the government borrowing. This resulted in a bond-market sell-off that drove U.S. yields sharply higher, helped stall the U.S. dollar’s decline, and supported the USD/JPY pair’s upward trend. 

The U.S. Federal Reserve officials expect a quick economic recovery if coronavirus vaccinations continue to gather pace; however, that could leave markets estimating about the outlook for the monetary policy by Central Bank. Federal Reserve might not recourse to faster than expected loosening of coronavirus stimulus efforts. Such a move from the Fed could put pressure on it to raise interest rates faster than expected, and this would help the U.S. dollar gather strength and support the rising USD/JPY pair. Moreover, on Tuesday, the daily U.S. coronavirus death-toll hit a record of 4327 as the Trump administration moved to rush the rollout of vaccinations across the country. During the holiday season around January 8, the rising death-toll was first seen in the U.S. with 4000 deaths, and it has reached 4327 now.

The total number of deaths in the United States from coronavirus has reached 382,624, and it is the biggest death-toll in the world. The U.S. also has the highest number of coronavirus cases globally, with 22,959,610 confirmed cases of coronavirus. Despite lockdown and restrictive measures, these rising coronavirus cases added weight on the U.S. dollar and capped further gains in the USD/JPY pair.

Daily Technical Levels

Support   Resistance

103.53      104.16

103.31      104.56

102.91      104.78

Pivot Point: 103.94

USD/JPY – Trading Tips

The safe-haven currency pair USD/JPY slipped to trade at 104.054 level amid increased demand for safe-haven assets. The USD/JPY has formed an upward channel on the 4-hour timeframe, and it has the chance of leading the pair towards the next resistance level of 104.340 level. The 50 periods EMA supports the bullish trend, and we may have odds of taking a buying trade over the 103.570 level today. Good luck! 

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Forex Signals

AUD/USD Violates Ascending Triangle – Double Bottom Support! 

The AUD/USD closed at 0.77665 after placing a high of 0.77984 and a low of 0.77280. The currency pair AUD/USD remained flat throughout the day on Friday and closed its day at the same level it began its day with as the risk rally pushed the pair higher and the US dollar strength dragged the pair AUD/USD lower at the same time. 

The risk-sensitive Aussie just went with the flow and boosted by rallying equities and persistent hopes that the economic chaos triggered by the coronavirus pandemic was on its final stage. The risk sentiment in the market was also supported by the latest announcement from the UK on Friday. The UK announced that it’s medical regulatory has approved a third vaccine for coronavirus made by Moderna for emergency use authorization. 

The rising risk sentiment was also supported by the decreasing political risk in Washington related to power transition. The US President Donald Trump has agreed to a transition of power, and this has raised the risk sentiment in the market and supported the upward momentum in AUD/USD pair in the early trading session. However, the AUD/USD pair’s gains were lost in the late trading hours on Friday after the US Dollar became strong across the board. The greenback was high on Friday, with the US Dollar Index above the 90.00 level for the first time this week. The US treasury yields on the 10-year note were also high on Friday, with 3% up for the day and 21% up for the week. All these factors added to the US dollar demand that ultimately weighed on AUD/USD pair and forced the pair to lose its early daily gains.

On the data front, from the US side, at 18:30 GMT, the Average Hourly Earnings for December raised to 0.8% against the predicted 0.2% and supported the US dollar that added further weight to AUD/USD pair. In December, the Non-Farm Employment Change plunged to -140K against the predicted 60K and weighed on the US dollar. During December, the Unemployment Rate plunged to 6.7% against the predicted 6.8% and supported the US dollar that added further AUD/USD pair losses. At 20:00 GMT, the Final Wholesales Inventories for November came in as 0.0% against the predicted -0.1% and weighed on the US dollar.

The AUD/USD pair remained flat throughout Friday amid the mixed market sentiment and left the investors to await the publication of the final reading of November Retail Sales from Australia while China will provide an update on inflation that will also remain under close observation by AUD/USD investors. 

On Thursday, China will release its December Trade Balance that may also impact AUD/USD pair. The US’s CPI data on Wednesday and Retail Sales on Thursday will also affect the AUD/USD pair’s momentum in upcoming days.


Daily Technical Levels

Support Resistance

0.7700 0.7755

0.7679 0.7789

0.7645 0.7811

Pivot point: 0.7734

The AUD/USD pair has bounced off over the 0.7690 level, forming a bullish engulfing candle on the 2-hour timeframe. It may bounce off to trade until the 0.7740 level, where 10 & 20 periods EMA are likely to extend resistance at 0.7740. On the lower side, the AUD/USD may find support at the 0.7690 level. A bearish breakout of 0.7690 level can extend the selling trend until the next support area of 0.765 level today. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, December 18 – Top Trade Setups In Forex – German IFO Business Climate in Focus! 

On Friday, the fundamental side-eyes will remain on the German Ifo Business Climate figures, which are expected to drop from 90.7 to 90.2 along with the current account data, which is likely to drop from 25.2 B to 22.6B. Both of these figures extend bearish pressure on the Euro. Later, the Canadian retail sales will be in focus as it may drive some price action in the Canadian pairs.


 

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.22679 after placing a high of 1.22725 and a low of 1.21897. EUR/USD pair extended its gains on Thursday and peaked in April 2018, amid the broad-based U.S. dollar weakness and the rebound of the Eurozone economy. The U.S. dollar weakness was derived from various factors, including rising hopes that the coronavirus relief bill will release soon, the dovish comments from Powell post-meeting, and the soft U.S. labor market data on Thursday. 

The Democrats and Republicans were close to reaching a deal over a new $900 billion proposal, including $600-$700 in paychecks and unemployment benefits. The U.S. House Speaker Nancy Pelosi has even said that it might be possible that U.S. lawmakers will have the agreement in writing by the end of Thursday. These rising hopes for the U.S. stimulus bill added pressure on the U.S. dollar that ultimately supported the EUR/USD pair’s upward movement.

Powell emphasized that the Fed was following outcomes-based policies, which means if progress slows toward achieving those outcomes, then-Fed could step up its asset purchases. Powell’s dovish comments weighed on the U.S. dollar and supported rising EUR/USD prices on Thursday. Furthermore, on Thursday, the soft labor market data weighed on the U.S. dollar as the Unemployment Claims from last week surged to 885K. The weak U.S. dollar because of rising unemployment claims also supported the upward momentum in EUR/USD pair on Thursday.

On the data front, at 15:00 GMT, the Final CPI for the year in November remained flat at -0.3%. The Final Core CPI from Eurozone in November also remained as expected at 0.2%. From the U.S. side, at 18:29 GMT, the Philly Fed Manufacturing Index in December declined to 11.1 against the projected 20.1 and weighed on the U.S. dollar and supported EUR/USD prices. At 18:30 GMT, the Unemployment Claims from last week surged to 885K against the projected 817K and weighed on the U.S. dollar. For November, the Building Permits surged to 1.64M against the projected 1.55M and supported the U.S. dollar. The Housing Starts in November remained flat as projected 1.55M.

The Eurozone economy was rebounded as suggested by the December Eurozone’s Composite PMI that rose above 49 levels compared to expected 45.3 and supported the single currency. However, the Eurozone market confidence was tempered by the news that Germany, the largest Eurozone economy, would re-enter lockdown in January to curb coronavirus spread.

Meanwhile, the global economic outlook continued to improve following the news that Europe will be rolling out coronavirus vaccines. The E.U. Commission chief Ursula von der Leyen said that the coronavirus vaccination would start from December 27 in Austria, Germany, and Italy. The Health Minister Jens Spahn said that if the approval comes as planned, Germany will start vaccination on December 27. The potential vaccine rollout in Europe raised the Eurozone economy’s outlook and supported the single currency Euro and added the EUR/USD pair’s gains.

Daily Technical Levels

Support   Resistance

1.2143      1.2231

1.2090      1.2266

1.2055      1.2320

Pivot point: 1.2178

EUR/USD– Trading Tip

The EUR/USD bullish bias continues to drive an upward movement at 1.2245, and continuing an upward trend is likely to be continued. On the 4 hour timeframe, the EURUSD has entered the overbought zone, and it has completed 23.6% Fibonacci retracement at the 1.2240 level. A bearish breakout of 1.2240 can send the EUR/USD pair towards a 38.2% Fibo level of 1.2214. The odds of buying seems strong over the 1.2214 level today.


GBP/USD – Daily Analysis

 The GBP/USD pair was closed at 1.35833 after placing a high of 1.36244 and a low of 1.34950. GBP/USD pair extended its gains for the third consecutive day on Thursday and peaked since May 2018 due to broad-based U.S. dollar weakness. The British Pound pared some gains on Thursday after the U.K. Prime Minister Boris Johnson said that it was likely that a deal would not be reached until the European Union eased its stance over key sticking issues, including fishing rights.

Johnson poured cold water on the deal’s hopes, saying that it looked very likely that the agreement will not be finalized until the European Union shifts its position substantially. This update came in the right after the positive comments from European Commission President Ursula von der Leyen, who said that the progress in trade negotiations was seen.


Despite the hints of possible progress on a post-Brexit trade deal, PM Johnson has not shied away from his views that the possible outcome for the U.K. to leave the E.U. was without a deal. In this scenario, the U.K. and E.U. will follow the terms and conditions under the World Trade Organization that would not be good for both nations. The European Parliament has given Brexit negotiators until December 20 to strike a deal to allow enough time to ratify a potential agreement before the end of the U.K.’s transition period to leave the E.U.

Furthermore, on Thursday, the Bank of England kept interest rates at the lowest level on record after warning that rapid growth in coronavirus infections will deliver a bigger hit to the U.K. economy than expected in the final months of 2020. The official interest rate was kept unchanged at 0.1% by BoE, while the bank also left the Q.E. bond-buying program unchanged at 895 billion pounds after pumping an additional 150 billion pounds into the economy last month.

The bank acknowledged that against a backdrop of soaring coronavirus infections amid the second wave of the pandemic has forced the government to launch tier-3 restrictions in England and tighter control over Scotland, Wales, and Northern Ireland that has put the economy under pressure. The bank projected that the GDP of the U.K. in the final three months of 2020 would contract by a little over 1%, which means that national output for 2020 will be 11% below 2019, and it will be the biggest recession in 300 years. These dovish comments from the Bank of England removed some of the GBP/USD pair’s daily gain on Thursday.

On the data front, at 17:00 GMT, the Asset Purchase Facility from Great Britain in December remained flat at 895B. 

From the U.S. side, at 18:29 GMT, the Philly Fed Manufacturing Index in December fell to 11.1 against the anticipated 20.1 and weighed on the U.S. dollar and supported the GBP/USD pair. At 18:30 GMT, the Unemployment Claims from last week rose to 885K against the anticipated 817K and weighed on the U.S. dollar, and added further gains in GBP/USD pair. For November, the Building Permits rose to 1.64M against the anticipated 1.55M and supported the U.S. dollar. The Housing Starts in November remained flat as anticipated 1.55M.  The U.S. dollar was weak across the board as the hopes for the second round of stimulus bills raised as the Democrats and Republicans were coming closer to reach a $900 billion proposal that would include $600 to $700 paychecks and unemployment benefits. The rising hopes that U.S. stimulus will reach an agreement soon weighed on the U.S. dollar and added in the gains of GBP/USD.

The U.S. dollar was also weak because of the rising number of coronavirus cases in the U.S. despite the vaccine rollout. According to Johns Hopkins University, the U.S. confirmed 247,403 new coronavirus cases on Wednesday, and the number of Americans’ deaths was recorded as 3656 in a single day. Meanwhile, the risk perceived the latest improvement in risk sentiment also supported British Pound after the hopes of another vaccine approval rose. A vaccine by Moderna that will offer about 94% protection against the coronavirus was set to get emergency authorization as early as this week by US FDA. On Thursday, a panel of 22 members of experts met to discuss the efficacy and potential side effects of Moderna’s vaccine. However, the American public will start receiving vaccine shots possibly after months, and in the meantime, the hospitals across the country will be caring for the coronavirus patients. These rising optimism raised the hopes that global economic recovery will reach soon and supported the risk sentiment that added strength in Sterling and helped GBP/USD pair to continue its upward movement.

Daily Technical Levels

Support   Resistance

1.3442      1.3562

1.3378      1.3618 

1.3322      1.3683

Pivot point: 1.3498

GBP/USD– Trading Tip

The GBP/USD is trading at 1.3550 level, facing an immediate support level of 1.3518 level. This support level is extended by an upward trendline, which can be seen in the 4-hour timeframe. On the higher side, the pair can extend the buying trend until the 1.3588 level, and the continuation of the buying trend can also lead Sterling towards the 1.3625 level. Support holds around the 1.3518 level, and a breakout can lead the pair towards the 1.3495 area. Bullish bias dominates today.


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 103.074 after placing a high of 103.560 and a low of 102.872. The currency pair USD/JPY fell for the third consecutive day on Thursday amid the U.S. dollar’s broad-based weakness. The U.S. dollar fell significantly against the Japanese Yen, and the USD/JPY pair reached 102 level on Thursday as the U.S. dollar index fell below 90 levels for the first time since April 2018. The U.S. Dollar Index that measures the value of the U.S. dollar against the basket of six currencies fell to 89.7 level on Thursday and dragged the USD/JPY pair further on the downside towards its lowest since March.

On Thursday, the Wall Street main indexes rose modestly, with Dow Jones up by 0.39% and the NASDAQ by 0.42%. Meanwhile, the Japanese Yen performed well against its rivals across the board despite the risk appetite and kept the USD/JPY pair under pressure. The hopes for the second round of U.S. stimulus bill from Congress rose and weighed on the U.S. dollar as the Democrats and Republicans reached a consensus over the proposal of $900 billion stimulus aid that will include $600-$700 in the paychecks and unemployment benefits. Furthermore, the rising number of coronavirus cases in the U.S. were also weighing on the local currency as the cases in total reached about 17M in the U.S. Despite the vaccine rollout in the U.S., the rising number of coronavirus causes added pressure on the U.S. dollar and added further downside on the USD/JPY pair.

The USD/JPY pair’s downward momentum was the disappointing U.S. jobless claims on Thursday. On the data front, at 18:29 GMT, the Philly Fed Manufacturing Index in December decreased to 11.1 against the estimated 20.1 and weighed on the U.S. dollar that added pressure over the USD/JPY pair. At 18:30 GMT, the Unemployment Claims from last week increased to 885K against the estimated 817K and weighed on the U.S. dollar and dragged the pair USD/JPY further on the downside. Building Permits for November increased to 1.64M against the estimated 1.55M and supported the U.S. dollar. The Housing Starts in November remained flat as estimated at 1.55M.

Since September, the rising number of unemployment claims to the highest level suggested the effect of increasingly restrictive measures in many states due to increased coronavirus cases and people’s loss of confidence. Meanwhile, in Japan, the main upcoming event was the central bank meeting on Friday. The most likely scenario was a no change in the monetary policy setting and keeping the rates at -10bps and the 10-year JGB yield target at 0.00%. The emergency lending facilities are expected to extend beyond the current run-off date of March 31, 2021. There were no macroeconomic figures to be released from Japan on Thursday, so the pair USD/JPY kept following the U.S. dollar movements that were weak across the board on the day.


Daily Technical Levels

Support   Resistance

103.47      104.02

103.25      104.37

102.91      104.58

Pivot point: 103.81

USD/JPY – Trading Tips

The USD/JPY has reversed the selling bias to trade at the 103.550 level. The safe-haven currency pair is trading beneath an immediate support mark of 103.750, and the formation of candles beneath this level will reinforce the bearish breakout. If this happens, we may have an opportunity to short the USD/JPY pair today. Bearish bias looks firm as the MACD is creating histograms underneath 0, and the 50 periods EMA is operating around 103.800 level, suggesting strong probabilities of selling. On the lower side, the USD/JPY pair may find subsequent support at the 102.900 level. It can be a good idea to take a selling position below 103.750 today. Good luck!

Categories
Forex Market Analysis

Daily F.X. Analysis, December 16 – Top Trade Setups In Forex – U.K.Manufacturing PMI Figures Ahead! 

On the news front, eyes will remain on the series of Manufacturing PMI figures from the Eurozone, U.K., and the U.S. Although it’s a low impact event, it may help determine the market sentiment today.

 

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD pair closed at 1.21522 after placing a high of 1.21687 and a low of 1.21210. Despite the coronavirus related lockdowns, the EUR/USD pair moved higher on Tuesday as the European stock markets traded higher amid the optimism over the ongoing Brexit trade negotiations.

The European Union negotiator Michel Barnier said that securing a trade deal with Britain was still possible. In contrast, European Commission Ursula von der Leyen said that there was some movement over the sticking points.

According to the Times of London, the two sides had made progress on the level playing field, and only the biggest obstacle to a deal has left of differences over fishing rights. However, the hopes increased that some form of a deal could be reached with just days to go before the U.K. leaves the E.U. trading bloc. This optimism kept the single currency Euro higher and supported the upward momentum in EUR/USD pair.

On the data front, at 12:45 GMT, the French Final CPI for November came in line with the expectations of 0.2%. At 15:00 GMT, the Italian Trade Balance for October raised to 7.57B against the forecasted 5.40B and supported Euro and added gains in the EUR/USD pair.

On the U.S. front, at 18:30 GMT, the Empire State Manufacturing Index for December declined to 4.9 against the projected 6.3 and weighed on the U.S. dollar that added further gains in EUR/USD pair. The U.S. Import Prices in November fell to 0.1% against the projected 0.3% and weighed on the U.S. dollar and supported the upward momentum in EUR/USD pair. At 19:15 GMT, the Capacity Utilization Rate from the U.S. for November rose to 73.3% against the projected 73.1% and supported the U.S. dollar. The Industrial Production in November also surged to 0.4%against the projected 0.3% and supported the U.S. dollar and capped further gains in EUR/USD pair.

Meanwhile, the lockdown restrictions increased in Europe, given the region’s rising number of coronavirus cases. On late Monday, the U.K. government imposed tighter restrictions on London amid the increased infection rates. It cited that these may be partly linked to a new variant of the coronavirus. From Wednesday, Germany will also enter a lockdown that will include the closure of non-essential stores. Netherland also announced a new five-week lockdown, while Italy was considering more restrictions over the Christmas holidays.

Throughout the region, these lockdown restrictions added pressure on the single currency Euro and capped further gains in the EUR/USD pair on Tuesday.

Daily Technical Levels

Support   Resistance

1.2126       1.2175

1.2099       1.2197

1.2077       1.2224

Pivot point: 1.2148

EUR/USD– Trading Tip

The precious metal gold continues to trade bullish at 1,857, having crossed over double top resistance level of 1,857 level. On the higher side, the metal opens up further room for buying until the next target level of 1,865 and 1,875 level. On the lower side, the precious metal gold may find support at 1,848, and below this level, the metal may drop until the 1,832 level. Let’s consider staying bullish over 1,848 today. The 50 periods EMA supports a bullish bias, keeping the EUR/USD pair in a little bit of buying mode. Simultaneously, the MACD and RSI are also supporting a buying trend; thus, we should look for a buying trade over the 1.2175 level to target the 1.2265 level today. 


GBP/USD – Daily Analysis

 The GBP/USD pair closed at 1.34635 after placing a high of 1.34688 and a low of 1.32800. The GBP/USD pair was among the best performer on the day amid the speculation regarding the prospect of an imminent Brexit deal.

There were speculations mostly amongst Conservative M.P.s that a Brexit deal was close and might be voted in the House of Commons next Monday and Tuesday. This optimism led the GBP/USD pair higher in the market to post gains for the day.

After posting losses for three consecutive days, the currency pair GBP/USD pair rose by nearly 1% on Tuesday after the speculation that there had been progressing on the issue of a level playing field. The European Union negotiator Michel Barnier said that reaching a trade pact with Britain was still possible. At the same time, European Commission Ursula von der Leyen noted that there was some progress made over the sticking points.

British Pound is highly sensitive to Brexit progress, and any news showing optimism regarding the post-Brexit trade deal with the E.U. will have a great impact on the GBP/USD pair. This was the reason behind the sudden surge in GBP/USD currency pair on Tuesday despite the renewed lockdown restrictions by the U.K. government over London.

The Health Secretary of the UK, Matt Hancock, said on Monday that this week London would return to a strict lockdown as the coronavirus cases have soared in the British capital. Hancock said London would move from England’s Tier 2 – high alert local restrictions to Tier 3 – very high alert on Wednesday noon. 

Under the highest restriction level, all hospitality venues, including pubs, restaurants, and cafes, will close except for takeout and delivery. People will avoid unnecessary traveling and reduce the number of journeys. Residents in London will be restricted from meeting in private gardens or outdoor venues.

Meanwhile, on the data front, at 12:00 GMT, the Average Earnings Index from Great Britain raised to 2.7% against the forecasted 2.2% and supported the British Pound that added gains in the GBP/USD pair. The Claimant Count Change from the U.K. raised to 64.3K against the expected 10.5K and weighed on British Pound. The Unemployment Rate from the U.K. dropped to 4.9% from the expected 5.1% and supported the Sterling that added strength to the GBP/USD pair.

From the U.S. side, at 18:30 GMT, the Empire State Manufacturing Index for December fell to 4.9 against the estimated 6.3 and weighed on the U.S. dollar that added further gains in GBP/USD pair. The U.S. Import Prices in November dropped to 0.1% against the estimated 0.3% and weighed on the U.S. dollar and supported the upward momentum in GBP/USD pair. At 19:15 GMT, the Capacity Utilization Rate from the U.S. for November surged to 73.3% against the estimated 73.1% and supported the U.S. dollar. The Industrial Production in November also rose to 0.4% against the estimated 0.3% and supported the U.S. dollar.

Daily Technical Levels

Support   Resistance

1.3338       1.3528

1.3218       1.3595

1.3147       1.3719

Pivot point: 1.3404

GBP/USD– Trading Tip

The GBP/USD pair is trading at 1.3460 level, facing immediate resistance at 1.3475 and 1.3538 level. While the support stays at 1.3430 and 1.3401 level. The RSI and MACD support the buying trend in the market, while Cable has the potential to stay bullish over 1.3400 today. A choppy session can be expected until the pair violates the 1.3345 – 1.3309 range.


USD/JPY – Daily Analysis

The USD/JPY pair closed at 103.647 after placing a high of 104.150 and a low of 103.604. The USD/JPY pair failed to capitalize on its previous daily gains and dropped on Tuesday over the fears of a new variant of coronavirus and the increased lockdown restrictions over the globe.

The safe-haven appeal in the market returned after the U.K. Health Minister Matt Hancock told parliament that a new variant of the coronavirus associated with faster spread had been identified in southeast England. This led to widespread concern as headlines in the newspaper called this new variant “Super covid” and “mutant covid.”

Matt Hancock added that about 60 different local authorities had recorded coronavirus infections caused by the new variant. He also said that the World Health Organization had been notified, and a detailed study by U.K. scientists has started.

The fear of new and improved disease raised the market’s safe-haven appeal as London went into renewed lockdown restriction of Tier-3 level. Along with London, Germany and Netherland also extended their lockdown restrictions. The rising demand for safe-haven assets added strength to the Japanese Yen that ultimately weighed on the USD/JPY pair.

Meanwhile, on the data front, at 18:30 GMT, the Empire State Manufacturing Index for December declined to 4.9 against the anticipated 6.3. It weighed on the U.S. dollar that added further losses in the USD/JPY pair. The U.S. Import Prices in November fell to 0.1% against the anticipated 0.3% and weighed on the U.S. dollar and added further in the losses of the USD/JPY pair. At 19:15 GMT, the Capacity Utilization Rate from the U.S. for November rose to 73.3% against the anticipated 73.1% and supported the U.S. dollar. The Industrial Production in November also surged to 0.4% against the anticipated 0.3% and supported the U.S. dollar and capped further losses in the USD/JPY pair.

Furthermore, on Tuesday, Dr. Anthony Fauci, the U.S. senior official for infectious diseases, predicted that the U.S. could begin to achieve early stages of herd immunity against the deadly coronavirus by late Spring or Summer. 

Fauci said that to see an impact of the vaccine over the coronavirus spread, almost 50% of people would have to get vaccinated. To achieve herd immunity, 75 to 85% of people would have to get vaccinated. 

Herd immunity occurs when enough people become immune to the disease that the spread of the virus from one person to another person becomes unlikely. Fauci pointed to polio and measles as examples of herd immunity. Despite these positive statements from the top health official from the U.S., the USD/JPY pair failed to reverse its direction upward because of traders’ focus on the new variant of coronavirus.

Daily Technical Levels

Support   Resistance

103.47       104.02

103.25       104.37

102.91       104.58

Pivot Point: 103.81

USD/JPY – Trading Tips

The USD/JPY is trading dramatically bearish, falling below 103.700. This resistance area is extended by a double bottom pattern, which later was violated on the 2-hour timeframe. Below this level, the USD/JPY pair has odds of extending a sell trade until the next support level of 103.211. The 50 EMA and MACD are supporting selling bias. Thus we can expect to sell below 103.700, to target the 103.200 mark. Good luck! 

Categories
Forex Signals

AUD/USD Supported Over 0.7515 Level – Is It Good Time to Buy? 

The AUD/USD pair was closed at 0.75324 after placing a high of 0.75779 and a low of 0.75243. After placing gains for three consecutive days, the AUD/USD pair dropped on Monday despite the market’s risk flows. After rising above the highest level since June 2018, the AUD/USD pair saw heavy technical selling in the market. The pair reached above the 0.75700 level and faced heavy selling pressure as the investors started to take profits from their trades. The profit-taking overshadowed the market’s risk flows, and the pair AUD/USD continued falling on Monday. 

The risk sentiment was improved on Monday due to the latest vaccine rollout in the US and Canada after the UK. The US started giving Pfizer and BioNtech vaccine doses to nurses and health officials on Monday as it provides a 95% efficacy rate against the coronavirus.

The vaccine rolls out raised hopes that the global economic recovery will soon begin as the coronavirus will become less of a threat. This optimism raised the risk sentiment in the market but failed to impress the risk-sensitive Aussie buyers.

The risk sentiment was also supported by the latest hopes that the US coronavirus stimulus bill will be released soon to support the US economy from the coronavirus impact. The US dollar also came under pressure as the coronavirus cases, and the death toll from COVID-19 surpassed 300,000 number. The US dollar weakness could not impress the AUD/USD buyers, and the pair continued its bearish movement on Monday.

Meanwhile, the AUD/USD pair was under pressure on Monday as Biden has said that he will not remove the tariffs on Chinese products by Trump immediately. The President-elect nominated Katherine Tail for the role of US trade representative said on Friday that she was the trade enforcer against China’s unfair trade practices that will be a key priority in the Biden-Harris administration. It was a sign that Donald trump’s trade war will continue, which weighed on the China-Proxy Australian dollar and added losses in the AUD/USD pair on Monday.


Daily Technical Levels

Support Resistance

0.7514 0.7570

0.7492 0.7602

0.7459 0.7625

Pivot point: 0.7547

The AUD/USD is trading sideways at 0.7515, but it’s supported by an upward trendline that can be seen in the 2-hour timeframe. On the higher side, the AUD/USD is forming a double top level at 0.7527, which is now extending resistance. The leading technical indicators such as MACD and RSI support the buying trend, while the 50 periods EMA is also supporting the AUD/USD pair at 0.7515. Let’s consider buying over 0.7515 level to capture quick 40 pips. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, December 11 – Top Trade Setups In Forex on Friday! 

On the news front, eyes will remain on the German Final CPI m/m, which are expected to remain unchanged, and it may not drive any major movement in the market. BOE Gov Bailey is due to hold a press conference about the Financial Stability Report in London. Euro Summit also remains in highlight as the heads of state from the European Union countries are due to discuss the banking union and the capital markets union in Brussels.

 


EUR/USD – Daily Analysis

The EUR/USD closed at 1.21215 after placing a high of 1.21588 and a low of 1.20633. After falling for four consecutive days, the EUR/USD pair rose on Thursday amid the European Central Bank’s latest decision.

On Thursday, the European Central Bank held its interest rates on its main refinancing operations at 0.00%, marginal lending facility at 0.25%, and the deposit facility at -0.50%. ECB said that it would continue to monitor the exchange rate’s developments about their possible implications for the medium-term inflation outlook.

The European Central Bank expanded its massive monetary stimulus program by another 500 billion euros as the second wave of lockdown measures weighed on the euro area’s economic recovery. It also expanded the emergency bond purchases scheme for nine months worth 1.85 trillion euros and aimed to keep firms and governments afloat until the economy was ready to re-open.

Central Bank also announced that it would hold the interest rates at the same level until the inflation outlook comes close to its below 2% target. The additional support to the Eurozone economy from ECB added that the Eurozone economy will now recover quickly. These hopes added strength in the single currency Euro that helped EUR/USD pair to post gains on Thursday. Meanwhile, on the Data front, at 12:45 GMT, the French Industrial Production for October raised to 1.6% against the expected 0.4% and supported the single currency Euro. From the U.S. side, at 18:30 GMT, the CPI for November rose to 0.2% against the estimated 0.1% and supported the U.S. dollar. The Core CPI for November also raised to 0.2% against the expected 0.1% and supported the U.S. dollar. The Unemployment Claims from last week rose to 853K against the forecasted 723K and weighed on the U.S. dollar that added strength in the EUR/USD pair on Thursday.

The U.S. dollar was also weak on Thursday as the Unemployment claims rose from their expected level during last week due to increased restrictive measures in the U.S. and supported the EUR/USD pair’s upward trend. Furthermore, the U.S. dollar came under more pressure after releasing additional stimulus by the European Central Bank. The U.S. lawmakers were also unable to sort out disagreements over aid to state and local governments, holding up a broader spending package. The U.S. dollar weakness added further support to the upward momentum of the EUR/USD pair.

Daily Technical Levels

Support   Resistance

1.2044       1.2133

1.2006       1.2186

1.1954       1.2223

Pivot point: 1.2096

EUR/USD– Trading Tip

The technical side of the EUR/USD continues to remain the same as the pair is trading at 1.2103 level, facing immediate resistance at 1.2160 and 1.2196 level along with a support level of 1.2085. Closing of candles below the 1.2103 level can send the EUR/USD pair further lower until 1.2080 and 1.2040. Euro Summit will remain in highlights, and the choppy session is expected until the release of the event.

 


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.32900 after placing a high of 1.34108 and a low of 1.32453. The GBP/USD pair declined on Thursday as the meeting between PM Boris Johnson and E.U. Commission President Ursula von der Leyen failed to bridge major gaps between them.

PM Boris Johnson offered his ministers to prepare for the strong possibility of a no-deal Brexit. He said that the E.U.’s current offer was unacceptable because the U.K. could not be treated like its twin. He added that the deal offered by the E.U. was not sensible and was unlike any other free trade deal. He said that it was a way of keeping the U.K. locked in the E.U.’s regulatory orbit.

Johnson added a strong possibility that they would have a solution that will be much more like an Australian & Canadian relationship with the E.U. However, after the meeting, the PM Boris Johnson and E.U. Commission President Ursula von der Leyen agreed that a firm decision should be taken about the future of the talks by Sunday. The talks between the E.U.’s top negotiator Michel Barnier and the U.K.’s top negotiator David Frost will resume Brussels. Whereas, Foreign Secretary Dominic Raab said that it was unlikely the negotiations would be extended beyond Sunday.

At 05:30 GMT, the RICS House Price Balance from the U.K. raised 66% against the estimated 64% and supported British Pound. At 12:00 GMT, the Construction Output in October declined to 1.0% against the expectations of 1.2%. The Gross Domestic Product from Great Britain in October remained flat with expectations of 0.4%. The Goods Trade Balance from the U.K. showed a deficit of -12.0B against the forecasted -9.6B and weighed on British Pound and added losses in the GBP/USD pair. The Index of Services for the quarter also dropped to 9.7% against the expected 9.8% and weighed on Sterling and added further losses in GBP/USD pair. The Industrial Production in October surged to 1.3% against the expected 0.3% and supported British Pound. The Manufacturing Production for October also raised to 1.7% against the projected 0.3% and supported British Pound. 

At 18:30 GMT, the CPI for November surged to 0.2% against the anticipated 0.1% and supported the U.S. dollar that added pressure on GBP/USD pair. For November, the Core CPI also rose to 0.2% against the anticipated 0.1% and supported the U.S. dollar and added losses on GBP/USD pair. The Unemployment Claims from last week increased to 853K against the anticipated 723K and weighed on the U.S. dollar.

Moreover, the E.U. outlined contingency measures for a no-deal Brexit that reflected significant uncertainty whether a deal would be in place on January 1, 2021. This also raised the expectations that a Brexit deal might not be reached and weighed on GBP/USD pair on Thursday.

Daily Technical Levels

Support   Resistance

1.3338       1.3466

1.3280       1.3536

1.3209       1.3594

Pivot point: 1.3408

GBP/USD– Trading Tip

The GBP/USD is trading at the 1.3313 level, holding below an immediate resistance level of 1.3322. On the upper side, the GBP/USD pair can lead to a 1.3390 level, and support stays at 1.3269, which is extended by a double bottom level. Selling bias seems dominant, therefore, we should be looking for a sell trade only upon the violation of 1.3265 level. The lagging technical indicators like 50 EMA is suggesting selling bias, thus we should look for selling trades below 1.3400 and upon breakout 1.3265 level too.   

 


USD/JPY – Daily Analysis

The USD/JPY was closed at 104.212 after placing a high of 104.577 and a low of 104.139. The USD/JPY pair rose in the early trading session on Thursday amid the rising risk sentiment in the market after the stimulus measure from ECB and the vaccine optimism. On Thursday, an independent committee of experts recommended the U.S. Food and Drug Administration to approve the use of Pfizer and BioNtech’s coronavirus vaccine for people over the age of 16. It will be up to the FDA to decide whether to follow the recommendation or not. The agency is anticipated to announce its decision within days, and if it decides to approve the vaccine, then the health care workers could begin receiving the shots almost immediately.

The vaccine optimism in the U.S. raised the risk sentiment in the market as the chances for vaccine approval raised the chance for quick economic recovery and weighed on the safe-haven Japanese Yen, which ultimately added gains in the USD/JPY pair. The European Central Bank announced expanding its debt purchases scheme and further stimulus measures that also added in the market’s risk sentiment and supported the upward trend in the USD/JPY pair after weighing on the safe-haven Japanese Yen.

However, the USD/JPY pair failed to hold its gain on Thursday and started to decline as the U.S. Unemployment claims from last week raised to their highest since September 19 level. The rise in Americans’ jobless claim benefits was due to the states’ increased restrictive measures that halted economic activities. The raised unemployment claims weighed on the U.S. dollar and dragged the USD/JPY pair on the downside. 

On the data front, at 04:50 GMT, the BSI Manufacturing Index for the 4th quarter raised to 21.6 from the expectations of 3.5 and supported the Japanese Yen and weighed on the USD/JPY pair. The Producer Price Index from Japan came in line as expected -2.2%.

From the U.S. side, at 18:30 GMT, the CPI for November rose to 0.2% against the projected 0.1% and supported the U.S. dollar. The Core CPI for November also raised to 0.2% against the estimated 0.1% and supported the U.S. dollar. The Unemployment Claims from last week rose to 853K against the forecasted 723K and weighed on the U.S. dollar that made the USD/JPY pair to lose all of its gains on Thursday.

Daily Technical Levels

Support   Resistance

104.04        104.41

103.86        104.60

103.67        104.78

Pivot Point: 104.23

USD/JPY – Trading Tips

The USD/JPY violation of the symmetric triangle pattern at 104.346 faked out as the safe-haven currency pair reversed trade within the same triangle pattern. The current trading range of the USD/JPY pair remains 104.375 – 103.650, and violation of this range can extend the selling trend until the next support area of 103.200 level. Typically, such a triangle pattern can breakout on either side; this, we should be careful before opening any trade. The market is neutral as investors seem to wind up their positions ahead of the December holidays. Good luck

Categories
Forex Signals

USD/CAD Bearish Bias Seems to Halt – Eyes on U.S. NFP Figures! 

The USD/CAD pair was closed at 1.28619 after placing a high of 1.29411 and a low of 1.28519. The USD/CAD pair extended its losses for the 3rd consecutive day on Thursday due to broad-based U.S. dollar weakness and the rising crude oil prices.

The USD/CAD fell to its lowest since October 2018 on Thursday as the U.S. Dollar Index (DXY) reached 90.50 level, its lowest for 31 months. The U.S. dollar weakness could be attributed to the latest progress made in the talks of stimulus relief package in the U.S.

The Top Democrats officials, including President-elect Joe Biden, House Speaker Nancy Pelosi, and the Senate Minority Leader Chuck Schumer, have said that they favored a $908 billion worth bipartisan bill for now as it was the starting step towards the stimulus package. These comments from Democrats raised hopes that a deal might be reached between Republicans and Democrats. Both parties have a shared view that there was a need for a 2020 stimulus package in the economy and that a deal should be reached soon.

This progress raised the hopes and optimism in the market related to the U.S.’s stimulus package and weighed heavily on the U.S. dollar that ultimately added in the losses of the USD/CAD pair. Meanwhile, the WTI crude oil prices increased on Thursday as producers, including Saudi Arabia and Russia, resumed discussion to agree on how much crude to pump in 2021 after earlier talks failed to compromise how to tackle the weak oil demand coronavirus pandemic.

In late Thursday, OPEC+ announced after three days of discussion that they have agreed to increase the production by 500,000 barrels per day beginning in January. This will bring the total production cuts at the start of next year to 7.2 million BPD. On Thursday, the rising crude oil prices added strength in the commodity-linked Loonie that added further pressure on the USD/CAD pair.

On the data front, at 17:30 GMT, the Challenger Job Cuts for the year in November came in as 45.4%against the previous 60.4%. At 18:30 GMT, the Unemployment Claims from last week fell to 712K against the expected 775K and supported the U.S. dollar. At 19:45 GMT, the Final Services PMI for November rose to 58.4 against the forecasted 57.5 and supported the U.S. dollar. At 20:00 GMT, the ISM Services PMI stayed as forecasted 55.9.


Daily Technical Levels

Support Resistance

1.2898 1.2950

1.2877 1.2981

1.2847 1.3002

Pivot point: 1.2929

The USD/CAD traded in a selling mode, falling below the 1.2885 level to test the support area of the 1.2845 level. Bearish crossover of 1.2845 level can extend selling bias until 1.289 level. We opened a selling trade during the European open, but it seems to consolidate sideways ahead of the NFP figures. Here’s a trading plan for now…

Entry Price – Sell 1.28485

Stop Loss – 1.28885

Take Profit – 1.28085

Risk to Reward – 1:1

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

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

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

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

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

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Forex Market Analysis

Daily F.X. Analysis, December 03 – Top Trade Setups In Forex – Services PMI under Spotlight! 

The focus will remain on the range of services PMI numbers from the Eurozone and U.K. on the data front. Most of the data is anticipated to be neutral; nevertheless, the U.S. Unemployment Claims and ISM Services PMI will be the main highlight of the day.

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD closed at 1.21150 after placing a high of 1.21182 and a low of 1.20398. The EUR/USD pair rose to its highest since April 2018 on Wednesday amid rising optimism from the vaccine front and the fiscal stimulus hopes.

On Wednesday, the U.K. regulator approved Pfizer and BioNtech’s vaccine for emergency use to fight against the coronavirus. This news added further support to the already improved risk sentiment in the market and helped the EUR/USD pair to rise as it is a riskier asset.

On the data front, at 12:00 GMT, the German Retail Sales for October raised to 2.6% against the projected 1.3% and supported Euro that added further gains in EUR/USD pair. At 13:00 GMT, the Spanish Unemployment Change dropped to 25.3K against the estimated 54.5K and supported Euro and added further gains in EUR/USD pair. At 14:00 GMT, Italian Monthly Unemployment Rate for October declined to 9.8% against the forecasted 9.9% and supported Euro and helped EUR/USD rise. At 15:00 GMT, the PPI for October raised to0.4% against the forecasted 0.2% and kept the single currency Euro and gave additional support to EUR/USD pair. The Unemployment Rate in Eurozone remained flat at 8.4%.

At 18:15 GMT, the ADP Non-Farm Employment Change for November fell to 307K against the anticipated 433K and weighed on the U.S. dollar and added further in EUR/USD pair. After the release of macroeconomic data on Wednesday, the currency pair EUR/USD raised sharply and surpassed the 1.2100 level as all the data was in favor of it. Meanwhile, the lawmakers in Washington continued their negotiations related to a fiscal stimulus deal to support the U.S. economy. The negotiations weighed on local currency and made the U.S. dollar weak across the board. Furthermore, the optimism about a $908 billion package also boosted the market’s risk sentiment and weighed on the U.S. dollar that added additional gains in EUR/USD pair.

The U.S. dollar was also weak because of the rising number of coronavirus cases in the U.S. On Wednesday, the total number of deaths from coronavirus set a new record in a single day, and hospitalizations also reached an all-time high. On Wednesday, about 100,200 patients of coronavirus were hospitalized in the U.S. The U.S. Dollar Index on Wednesday slumped to its lowest level in more than 30 months at 91.10 and supported the upward momentum of the EUR/USD pair.

Daily Technical Levels

Support   Resistance

1.1971       1.2122

1.1873       1.2175

1.1819       1.2273

Pivot point: 1.2024

EUR/USD– Trading Tip

The bullish bias of the EUR/USD continues to dominate the market as the pair surged further higher until the 1.2117 level. On the higher side, the EUR/USD may find an immediate resistance at 1.2150 and 1.2196 level. Simultaneously, the closing of candles below the 1.2153 level can send the EUR/USD pair further lower until 1.2080. On the 4 hour timeframe, the EUR/USD has formed an upward channel, which is suggesting odds of further buying trend in the pair. The MACD is forming histograms above 0, suggesting odds of an upward trend in the market. Let’s consider the buying trend until the 1.2200 level today. 


GBP/USD – Daily Analysis

The GBP/USD closed at 1.33651 after placing a high of 1.34410 and a low of 1.32875. The British Pound erased gains and slipped to a 3-week lowest level on Wednesday after the E.U.’s chief Brexit negotiator said that progress in talks had stalled and cooled the expectations that a deal was near.

Michel Barnier said that a deal was not guaranteed and signaled that differences over key issues, including access to the U.K. fishing waters and level playing field rules, were still there. A day before this news, reports suggested that post-Brexit trade talks had reached the so-called tunnel. Tunnel refers to a situation where both parties don’t leave until a consensus is reached.

Ahead of the update, there were signs the ongoing impasse was starting to frighten some members, who have called on the E.U. to start preparation for a no-deal scenario. There likely could be another twist to come in Brexit talks in the days ahead with the U.K.’s proposal for a new finance bill. This bill undermines some parts of the original Brexit Withdrawal agreement, and it could dent the little progress in negotiations seen so far.

Whereas, Barnier said that if the U.K. government moved ahead next week with draft clauses in the Finance Bill that were inconsistent with the Withdrawal Agreement, then the talks will come under crisis.

All these negative reports depressed Brexit’s expectations and started to weigh on British Pound that added losses in GBP/USD pair. The time for an end of Brexit transition period on December 31 has come near, and if a deal has not been reached by then, U.K. will have to follow WTO rules and regulations while trading with the E.U.

Meanwhile, on the data front, at 05:01 GMT, the BRC Shop Price Index for the year dropped to -1.8% against the forecasted -1.3% and weighed on British Pound and added pressure on GBP/USD pair. On the U.S. front, at 18:15 GMT, the ADP Non-Farm Employment Change for November dropped to 307K against the anticipated 433K and weighed on the U.S. dollar, and capped further losses in the GBP/USD pair.

Daily Technical Levels

Support   Resistance

1.3340       1.3468

1.3263       1.3519

1.3212       1.3595

Pivot point: 1.3391

GBP/USD– Trading Tip

The GBP/USD is trading sideways in between a fresh trading range of 1.3305 – 1.3445. Breakout of this range can lead the Cable price towards the 1.3517 level. The volatility seems low ahead of the Christmas holidays. However, the European session can trigger a buying trend until the 1.3515 level, while support continues to stay at the 1.3305 level. A bearish breakout of the 1.3305 level can trigger selling until the 1.3212 level. The MACD and RSI are suggesting a bullish bias in the market. Let’s consider taking buying trades over 1.3305 and 1.3447 level today.


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.410 after placing a high of 104.749 and a low of 104.223. The USD/JPY pair raised for the third consecutive day on Wednesday amid the market’s optimism. However, most of USD/JPY’s daily gains were lost during the late trading session as U.S. stimulus raised.

The risk sentiment in the market was improved after the successful vaccine development from famous drug companies. Pfizer and BioNtech even received approval from the U.K. administration for emergency use authorization of their vaccine on Wednesday. Pfizer & BioNtech became the first in the world to get approval for the widespread use of their vaccine. It means that their vaccine can now be used to prevent the coronavirus officially, and it raised the risk sentiment in the market that ultimately added weight on the Japanese Yen due to its safe-haven nature; thus, it supported the upward momentum of the USD/JPY pair.

The Monetary Base for the year dropped to 16.5% against the forecasted 17.2%. At 09:59 GMT, Consumer Confidence raised to 33.7 against the anticipated 33.0 and supported the Japanese Yen that capped additional gains in the USD/JPY pair on Wednesday. At 18:15 GMT, the ADP Non-Farm Employment Change for November fell to 307K against the estimated 433K and weighed on the U.S. dollar that limited the gains of the USD/JPY pair on Wednesday.

The prospects of a U.S. coronavirus relief package weighed on the greenback and forced the currency pair USD/JPY to lose most of its daily gains. As the $1.4trillion spending bill’s support increased, the top U.S. economic officials on Tuesday advised Congress to present more assistance for small businesses to survive during the pandemic.

Meanwhile, Philadelphia Federal Reserve Bank President Patrick Harker said on Wednesday that due to the increased spread of the coronavirus and delayed fiscal help along with the permanent job loss of some workers, the U.S. economic growth has been moderate.

Harker also forecasted moderate growth for the rest of this year and the first quarter of 2021. He also predicted that the economy would stay below pre-pandemic levels. Harker also said that if the vaccine is widely available by next spring and summer, then the growth will pick up in the second half of the next year. Harker added that more financial support was needed to get the economy to that point and to support low-income households.

Harker also said that the Central Bank’s emergency lending programs should be extended beyond next year as they are set to expire on December 31. Harker’s comments came in after Treasury Secretary Steven Mnuchin asked the Fed to return the unused funds. All these comments added pressure on the U.S. dollar as the continuous demand for a second stimulus bill weighed on local currency.

Daily Technical Levels

Support   Resistance

104.13       104.54

103.95       104.77

103.72       104.95

Pivot point: 104.36

USD/JPY – Trading Tips

The USD/JPY is trading with a sideways trading range of 104.600 – 104.200, holding below an immediate resistance level of 104.600. On the lower side, the safe-haven currency pair may find support at the 103.719 level. The pair seems to disrupt the resistance level of 104.600, and if this happens, the USD/JPY may soar until the next resistance area of 105.030 level. The MACD and RSI support the buying trend, but we should only take buying positions over the 104.600 level today. Good luck!

Categories
Forex Market Analysis

Daily F.X. Analysis, December 02 – Top Trade Setups In Forex – Advance NFP in Focus!

On Wednesday, the eyes will remain on the Fed Chair Powell Testifies, ADP Non-Farm Employment Change and Unemployment Rate from the Eurozone. A primary focus will remain on the ADP Non-Farm Employment Change as this will help investors determine the odds of actual NFP data, which is due on Friday.

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD closed at 1.20715 after placing a high of 1.20764 and a low of 1.19243. The EUR/USD surged above 1.2000 level and reached 1.20764 level, the highest level since May 2018 amid the optimism surrounding the coronavirus vaccine and broad-based U.S. dollar weakness.

Many factors were involved in the breakout of the EUR/USD pair on Tuesday above the 1.2000 level, including the latest optimism because of vaccine hopes, monetary stimulus from both sides, and the political certainty for a change. 

Pfizer and BioNtech were the first to report a high efficacy of 95% in a phase-3 coronavirus immunization trial on November 09. After that, many drug companies, including Moderna, AstraZeneca, Novavax, and Oxford University, also followed them. Pfizer and Moderna have already applied for emergency use authorization from the US FDA, and soon after getting the approval, these vaccines will be available for usage. Even Pfizer has sent its first mass shipment of vaccine to Chicago on Monday. All this vaccine optimism pushed the safe-haven U.S. dollar down and raised the risk sentiment in the market that supported the upward momentum of the EUR/USD pair on Tuesday.

On the stimulus front, the European Central Bank and the U.S. Federal Reserve were set to expand their bond-buying schemes. Since the pandemic has started, the stimulus aid from ECB has supported the Eurozone’s economy by allowing governments to spend more. In the United States, the Federal Reserve’s dollar printing triggered a broad risk-on mood that also helped the riskier assets like EUR/USD pair to rise. 

On the Political certainty front, the U.S. elections have declared a final winner- Joe Biden. While outgoing President Donald Trump has been continuously crying foul, his attempts to overturn the elections failed, and investors continued to price the Joe Biden victory and selling the U.S. dollar. Moreover, the nomination of Janet Yellen as Treasury Secretary was also reassuring.

On the E.U. front, the political development in the upcoming Brexit deal has entered a tunnel as an intense final round of talks is in progress, and the results of talks are yet to be declared. All these factors combined and supported the EUR/USD pair’s upward momentum on Tuesday.

On the data front, at 13:15 GMT, the Spanish manufacturing PMI for November declined to 49.8 against the forecasted 50.8 and weighed on Euro. At 13:45 GMT, the Italian Manufacturing PMI also dropped to 51.5 against the projected 52.0 and weighed on the single currency. At 13:50 GMT, the French Final Manufacturing PMI raised to 49.6 from the expected 49.1 and supported Euro. AT 13:55 GMT, the German Final Manufacturing PMI stayed the same at 57.8. The German Unemployment Change came in as -39K against the expected 9K and supported the single currency. At 14:00 GMT, the Final Manufacturing PMI from the Eurozone remained flat with the expected 53.8. At 15:00 GMT, the CPI Flash Estimate for the year dropped to -0.3% against the estimated -0.2% and weighed n Euro. The Core CPI Flash Estimate for the year came in line as expected 0.2%. 

On the U.S. front, at 20:00 GMT, the ISM Manufacturing PMI for November fell to 5.75 against the forecasted 5.9 and weighed on the U.S. dollar and supported the upward momentum of the EUR/USD pair. The Construction Spending for October surged to 1.3% against the estimated 0.8% and supported the U.S. dollar. The ISM Manufacturing Prices for November also surged to 65.4 against the forecasted 65.0 and helped the U.S. dollar. The Wards Total Vehicle Sales from the U.S. declined to 15.6M against the estimated 16.1M and weighed on the U.S. dollar that added further gains in EUR/USD pair.

Given the above manufacturing data, the Eurozone economy’s outlook looks somewhat better than the United States outlook that added extra pressure on the U.S. dollar and helped the EUR/USD pair to place highs above the 1.200 level on Tuesday.

Daily Technical Levels

Support   Resistance

1.1971       1.2122

1.1873       1.2175

1.1819       1.12273

Pivot point: 1.2024

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

The GBP/USD closed at 1.34224 after placing a high of 1.34424 and a low of 1.33149. After placing losses for three consecutive days, the GBP/USD pair rose on Tuesday and recorded gains on the back of broad-based U.S. dollar weakness and increased Brexit hopes. The GBP/USD pair hit the highs at 1.3400 level on Tuesday over the positive Brexit news after the Times Radio’s Chief Political Commentator Tom Newton Dunn tweeted the U.K. and E.U. trade deal talks have entered a mythical tunnel. Though either side formally confirmed or rejected the “tunnel” status of negotiations after his tweet. 

The tunnel refers to a state of intense negotiation that essentially ends up having some agreement between both parties, and before that, neither side leaves. Though it does not guarantee a deal will be made, it shows a strong willingness/commitment from both sides to work as hard as possible to get a compromise. After this tweet by Dunn, the GBP/USD pair started to gain traction and rise in the financial market due to increased demand for British Pound. 

On the other hand, the GBP/USD pair’s gains could also be attributed to the U.S. dollar’s weakness. The greenback was weak across the board after the release of poor macroeconomic data and the rising number of coronavirus cases in the U.S.

The top U.S. health officials announced plans on Tuesday to begin vaccinating Americans against the coronavirus as early as mid-December amid the increasing death from coronavirus. The nationwide deaths hit the highest number for a single day in six months in the U.S. and raised economic recovery fears that led to the U.S. dollar’s weakness and improved GBP/USD pair.

On the data front, at 20:00 GMT, the ISM Manufacturing PMI for November declined to 5.75 against the estimated 5.9 and weighed on the U.S. dollar and supported the bullish momentum of the GBP/USD pair. For October, the Construction Spending rose to 1.3% against the projected 0.8% and helped the U.S. dollar. The ISM Manufacturing Prices for November also raised to 65.4 against the estimated 65.0 and supported the U.S. dollar. The Wards Total Vehicle Sales from the U.S. fell to 15.6M against the anticipated 16.1M and weighed on the U.S. dollar that added further gains in GBP/USD pair.

On Britain front, at 12:00 GMT, the Nationwide HPI for November raised to 0.9% against the forecasted 0.2% and supported the British Pound that added further gains in GBP/USD pair on Tuesday. At 14:30 GMT, the Final Manufacturing PMI also raised to 55.6 against the expected 55.2 and supported the British Pound that added further gains in GBP/USD pair.

Daily Technical Levels

Support   Resistance

1.3316       1.3342

1.3301       1.3353

1.3290       1.3368

Pivot point: 1.3327

GBP/USD– Trading Tip

The GBP/USD is trading sideways, having violated the narrow trading range of 1.3397 – 1.3304. The market is expected to display choppy sessions with a new limited range of 1.3397 to 1.3452 level. The violation of a triple top resistance level of 1.3397 level is now working as a support, and it may trigger a bounce off in the Cable until 1.3452 and 1.3512 level. Let’s keep an eye on the 1.3397 level to stay bullish above this level today. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.305 after placing a high of 104.576 and a low of 104.180. The USD/JPY pair stayed on a bullish track on Tuesday despite the broad-based U.S. dollar weakness due to increased risk flow in the market. The stock markets have been buoyed by the news that the first coronavirus vaccine could be administered by the end of the year. Despite the acceleration of the pandemic in the U.S. and many other parts of the world, the riskier assets gained on the back of improved risk sentiment due to vaccine hopes. The U.S. Dollar Index (DXY) that measures the U.S. dollar value against the six currencies basket fell to 92 levels on Tuesday.

The pair rose above 104.5 level on Tuesday amid the broad-based risk sentiment in the market over the optimism surrounding the vaccine hopes. However, the gains in USD.JPY pair started to fade away in the late trading session after the US ISM Manufacturing PMI release for November. In November, the declining manufacturing activity was the proof of halted manufacturing activity due to the rising number of restrictive measures in many states of America due to escalated second wave of coronavirus.

At 04:30 GMT, the Unemployment Rate from Japan for October remained flat with the expectations of 3.1%. At 04:50 GMT, the Capital Spending for the quarter from Japan came in as -10.6% against the expected -12.0% and supported the Japanese Yen that limited the USD/JPY pair’s gains. AT 05:30 GMT, the Final Manufacturing PMI from Japan also raised to 49.0 against the expected 48.3 and supported the Japanese Yen that capped further gains in the USD/JPY pair.

On the U.S. dollar front, at 20:00 GMT, the ISM Manufacturing PMI for November fell to 5.75 against the projected 5.9 and weighed on the U.S. dollar that capped further gains in the USD/JPY pair. For October, the Construction Spending surged to 1.3% against the estimated 0.8% and supported the U.S. dollar and added gains in the USD/JPY pair. The ISM Manufacturing Prices for November also rose to 65.4 against the expected 65.0 and helped the U.S. dollar that added additional gains in the USD/JPY pair. The Wards Total Vehicle Sales from the U.S. dropped to 15.6M against the expected 16.1M and weighed on the U.S. dollar that capped further gains in the USD/JPY pair.

Meanwhile, the U.S. death rate because of the COVID-19 virus has also increased to an alarming level as it posted the highest number for a single day in six months. The Top U.S. health official announced plans on Tuesday to begin vaccinating Americans against the coronavirus as early as mid-December. This statement also raised the risk sentiment and added weight on the Japanese Yen that supported the USD/JPY pair’s upward momentum on Tuesday.

Furthermore, On Tuesday, Federal Reserve Chairman Jerome Powell said that the United States economy’s outlook was extraordinarily uncertain due to increased numbers of coronavirus cases that have affected the U.S. economy hardly. 

In his testimony to the U.S. Senate Committee on Banking, Housing and Urban Affairs, Powell said that the increasing number of COVID-19 cases in the U.S. and abroad were concerning. He said that until the people were confident about re-engaging the economic activities confidently, full economic recovery was impossible. At the same time, Powell was upbeat over the recent optimistic news on vaccine development worldwide.

Meanwhile, several programs set by the Federal Reserve in March are near to end of the year. In response to this, Powell stated that these programs would help unlock almost $2 trillion funding. After this report, the USD/JPY pair started losing its early daily gains as the greenback became weak across the board due to rising hopes for stimulus measure.

Furthermore, On Tuesday, the outgoing Treasury Secretary Steven Mnuchin also testified before the Senate and urged lawmakers to pass a second stimulus bill quickly. This also added in the U.S. dollar weakness and capped further gains in the USD/JPY pair on Tuesday.

Daily Technical Levels

Support   Resistance

104.03       104.16

103.97       104.23

103.91       104.29

Pivot point: 104.10

USD/JPY – Trading Tips

The USD/JPY is trading with a sideways trading range of 104.600 – 104.200, holding below an immediate resistance level of 104.600. On the lower side, the safe-haven currency pair may find support at the 103.719 level. The pair seems to disrupt the resistance level of 104.600, and if this happens, the USD/JPY may soar until the next resistance area of 105.030 level. The MACD and RSI support the buying trend, but we should only take buying positions over the 104.600 level today. Good luck!

Categories
Forex Signals

EUR/JPY Bullish Engulfing Signals Further Buying – Quick Signal Update!

During Tuesday’s early European trading session, the EUR/JPY currency pair managed to extend its overnight bullish streak and drew some further bids around closer to the 125.00 level mainly due to the market risk-on mood, which tends to undermine the safe-haven Japanese yen and contributes to the currency pair gains. Hence, the market trading sentiment was being supported by the prospects of a COVID-19 vaccine.

Across the pond, the shared currency upticks also played a significant role in underpinning the currency pair. On the contrary, the long-lasting coronavirus woes in the U.S. and Europe keep challenging the upbeat market sentiment, which becomes the key factor that kept the lid on any additional gains in the currency pair.

On the contrary, the intensifying coronavirus woes across the globe and intensifying lockdowns restrictions in Europe and the U.S. keep challenging the upbeat market performance and become the key factor that kept the lid on any additional gains in the currency pair.

In the absence of the key data/events on the day, the market traders will keep their eyes on US ISM Manufacturing PMI for November and original comments from the Fed Chair’s Testimony for fresh impetus. In addition to this, the updates about the U.S. stimulus package will also be key to watch. In the meantime, the risk catalyst like geopolitics and the virus woes, not to forget the Brexit, will not lose their importance.


Daily Support and Resistance
S1 122.99
S2 123.8
S3 124.11
Pivot Point 124.62
R1 124.93
R2 125.44
R3 126.25

The EUR/JPY has violated the resistance level of 124.780, and above this, the pair has the potential to go after the 125.530 level. However, if the EUR/JPY pair fails to stay over 124.750 support, the odds of bearish reversal will also remain solid. The leading indicator, such as MACD is supporting the buying trend. Checkout a trade setup below.

Entry Price – Buy 124.898

Stop Loss – 124.498

Take Profit – 125.298

Risk to Reward – 1:1

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

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

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

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

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

Categories
Forex Market Analysis

Daily F.X. Analysis, November 26 – Top Trade Setups In Forex – Thanksgiving Day! 

The economic calendar is a bit muted amid the Thanksgiving holiday. Most Forex brokers remain open for every holiday except Christmas and New Year’s Day. Stock markets and banks have slightly different holiday schedules. In addition to this, the eyes will remain on ECB Monetary Policy Meeting Accounts during the European session. It’s a detailed record of the ECB Governing Board’s most recent meeting, providing in-depth insights into the economic conditions that influenced their decision on where to set interest rates. 

Economic Events to Watch Today  

  


EUR/USD – Daily Analysis

The EUR/USD pair closed at 1.19136 after placing a high of 1.18959 and a low of 1.18334. EUR/USD pair extended its upward momentum on Wednesday amid the broad-based U.S. dollar weakness and the rising optimism around the market. 

The risk sentiment was triggered by the latest vaccine development that suggested a quick economic recovery and pushed riskier assets like EUR/USD pair on the higher levels. The currency pair EUR/USD rose and placed fresh highs on Wednesday after reaching its highest level since mid-August.

The U.S. dollar was weak on Wednesday after the release of mixed and depressing data from the U.S. The Unemployment claims rose unexpectedly and weighed on the U.S. dollar, and supported the upward momentum in EUR/USD pair.

On the data front, there was no data from the Europe side on Wednesday, while from the U.S., at 18:30 GMT, the Prelim Gross Domestic Product for the third quarter came in line with the anticipations of 33.1%. The Unemployment Claims from last week rose to 778K against the projected 732K and weighed on the U.S. dollar. The Core Durable Goods Orders for October rose to 1.3% against the estimated 0.5% and supported the U.S. dollar. The Durable Goods Orders also rose to 1.3% from the projected 1.0% and helped the U.S. dollar. The Goods Trade Balance from the U.S. for October came in as forecasted -80.3B. The Prelim Wholesale Inventories for October rose to 0.9% against the estimated 0.4% and weighed on the U.S. dollar that added strength to EUR/USD pair.

At 18:36 GMT, the Prelim GDP Price Index for the third quarter also remained as expected at 3.6%. At 20:00 GMT, the Revised UoM Consumer Sentiment for November also came in line with the projections of 76.9. The Core PCE Price Index for October remained flat with the predictions of 0.0%. The New Home Sales for October surged to 999K against the anticipated 972K and supported the U.S. dollar. The Personal Income declined to -0.7% from the projected 0.0% and weighed on the U.S. dollar added in the gains of EUR/USD pair. The Personal Spending raised to 0.5% from the forecasted 0.4% and supported the U.S. dollar. The Revised UoM Inflation Expectations also came in line as expected at 2.8%.

On Wednesday, the European Central Bank released its review on the economy’s financial stability. The central bank warned that European banks would not see profits return to the pre-pandemic level before 2022. According to ECB, the Eurozone leaders have struggled to make sizeable profits over the last decade after the 2008 global financial crisis with more robust regulatory scrutiny and low-interest rates. While the recent coronavirus crisis has worsened bottom lines further, and that will continue to affect the financial sector in the coming months.

In simple words, the banks’ profitability will remain weak, which could hurt their ability to lend money to businesses and individuals that would also reflect the economy’s weak health. These comments from ECB failed to break the upward momentum of the EUR/USD pair on Wednesday.

Daily Technical Levels

Support   Resistance

1.1888     1.1936

1.1861     1.1957

1.1841     1.1984

Pivot point: 1.1909

EUR/USD– Trading Tip

The EUR/USD is trading with a bullish bias at the 1.1936 level, holding below an immediate resistance level of 1.1979. On the higher side, the EUR/USD pair may find resistance at 1.1979, and a bullish breakout of 1.199 level can extend the upward trend until 1.1942. On the 2 hour timeframe, the EUR/USD pair has violated the symmetric triangle pattern that was extending resistance at the 1.19052 level, and now this level is working as a support. Let’s consider taking a buying trade over the 1.1905 level, and above this, the next target stays at 1.1997.


GBP/USD – Daily Analysis

The GBP/USD pair closed at 1.33864 after a high of 1.33935 and a low of 1.33037. GBP/USD pair extended its gains for the 4th consecutive session on Wednesday amid the U.S. dollar weakness and the rising global market confidence due to vaccine progress. Meanwhile, the currency pair GBP/USD also remained under pressure on Wednesday after the Brexit uncertainty returned to the market.

The GBP/USD pair has been trading with an upside bias since the start of this week due to rising optimism in the market regarding the latest vaccine developments. Pfizer and BioNtech first reported its vaccine’s efficacy rate, followed by Moderna and AstraZeneca within two weeks. The back to back vaccine progress and the fact that Pfizer and BioNtech have already filed for emergency use authorization of their vaccine and others being in line for it has further supported the market’s risk sentiment.

The risk perceived GBP/USD pair gained traction and saw a jump in demand on expectations that the U.K. and the E.U. were getting closer to reaching a deal on Brexit. However, on Wednesday, the lack of recent progress raised uncertainty in the market and weighed on British Pound.

The French Foreign Minister Jean-Yves Le Drian recently commented that British proposals in the latest negotiations were insufficient. He also accused the U.K. of slowing talks over secondary subjects and playing with the calendar. He urged that securing a deal over fisheries will not be the adjustment variable in the talks.

Meanwhile, a BBC reporter Katya Adler also tweeted that E.U. sources have said that there were doubts about the E.U. Brexit negotiator Michelle Barnier going to London to negotiate once he leaves quarantine on Friday and that the talks were not going well. These updates were also confirmed by the President of the European Commission, Ursula von der Leyen, who said on Wednesday morning that she could not say if there will be a deal and the next few days would be decisive.

All this Brexit news dented the expectations that the two sides will eventually reach a deal on key sticking points. However, market participants decided not to react to such news for Wednesday and continued following the market’s optimism.

On the data front, at 18:30 GMT, the Prelim Gross Domestic Product for the third quarter remained flat with the expectations of 33.1%. The Unemployment Claims from last week surged to 778K against the anticipated 732K and weighed on the U.S. dollar. 

The Core Durable Goods Orders for October raised to 1.3% against the forecasted 0.5% and supported the U.S. dollar. The Durable Goods Orders increased to 1.3% from the estimated 1.0% and helped the U.S. dollar. The Goods Trade Balance from the U.S. for October remained flat at -80.3B. The Prelim Wholesale Inventories for October raised to 0.9% against the projected 0.4% and weighed on the U.S. dollar that added strength to GBP/USD pair.

At 18:36 GMT, the Prelim GDP Price Index for the third quarter also came in line with the projections of 3.6%. At 20:00 GMT, the Revised UoM Consumer Sentiment for November also remained flat at 76.9. The Core PCE Price Index for October stayed the same at 0.0%. The New Home Sales for October raised to 999K against the estimated 972K and supported the U.S. dollar. The Personal Income fell to -0.7% from the forecasted 0.0% and weighed on the U.S. dollar added in the GBP/USD pair’s gains. The Personal Spending rose to 0.5% from the projected 0.4% and supported the U.S. dollar. Revised UoM Inflation Expectations also remained flat at 2.8%.

Daily Technical Levels

Support   Resistance

1.3325     1.3416

1.3269     1.3451

1.3235     1.3507

Pivot Point: 1.3360

GBP/USD– Trading Tip

The GBP/USD is trading bullish around 1.3396 level, facing resistance at 1.3400 level. The resistance level is extended by the double top pattern at 1.3400 level, and a bullish crossover of 1.3400 level is likely to open further room for buying until 1.3446 level. On the 4 hour timeframe, the GBP/USD pair has formed a bullish channel that supports the pair at the 1.333 area. The RSI and MACD are suggesting a buying trend in sterling. However, I will prefer to open a buying trade over the 1.3396 area today. 


USD/JPY – Daily Analysis

The USD/JPY pair closed at 104.456 after a high of 104.596 and a low of 104.253. The USD/JPY pair stayed relatively low, around 104.5 level for the majority of the day, and remained more down during the American trading hours due to mixed macroeconomic data releases from the U.S.

The U.S. Dollar Index (DXY) edged lower in the late American session, remained at the 91.97 level, and kept the U.S. dollar depressed. On the data front, at 18:30 GMT, the Prelim Gross Domestic Product for the third quarter remained flat at 33.1%. The Unemployment Claims from last week rose to 778K against the expected 732K and weighed on the U.S. dollar. The Core Durable Goods Orders for October rose to 1.3% against the expected 0.5% and supported the U.S. dollar. The Durable Goods Orders surged to 1.3% from the anticipated 1.0% and helped the U.S. dollar. 

The Goods Trade Balance from the U.S. for October remained flat with the expectations of -80.3B. The Prelim Wholesale Inventories for October rose to 0.9% against the estimated 0.4% and weighed on the U.S. dollar.

At 18:36 GMT, the Prelim GDP Price Index for the third quarter remained flat at 3.6%. At 20:00 GMT, the Revised UoM Consumer Sentiment for November stayed at 76.9. The Core PCE Price Index for October came in line with the expectations of 0.0%. The New Home Sales for October surged to 999K against the projected 972K and supported the U.S. dollar. The Personal Income dropped to -0.7% from the expected 0.0% and weighed on the U.S. dollar. The Personal Spending surged to 0.5% from the forecasted 0.4% and supported the U.S. dollar. The Revised UoM Inflation Expectations also came in line with the anticipations of 2.8%.

The rising unemployment claims and declined personal income weighed on the local currency while the durable goods orders and new home sales, along with the personal spending, supported the U.S. dollar on Wednesday.

Meanwhile, from the Japanese side, the year’s SPPI declined to -0.6% from the forecasted -0.5% and weighed on the Japanese Yen. At 09:59 GMT, the BoJ Core CPI for the year raised to 0.0% from the forecasted -0.1% and supported the Japanese Yen that added weight on the USD/JPY pair on Wednesday.

The currency pair USD/JPY remained bullish throughout the day despite the U.S.’s mixed economic data on the back of rising optimism in the market. The global market sentiment remained confident due to the rising number of vaccine candidates reporting progress. The race to file for emergency use authorization of vaccine started with Pfizer and BioNtech has extended to AstraZeneca and Moderna that has helped raised hopes for a pre-pandemic economic environment and supported the risk sentiment.

The rising risk sentiment added weight on the safe-Haven Japanese Yen and supported the USD/JPY pair’s upward momentum on Wednesday. Another factor involved in the USD/JPY pair’s upward movement was the beginning of the transition of the presidency of President-elect Joe Biden.

Daily Technical Levels

Support   Resistance

104.27     104.63

104.09     104.79

103.92     104.98

Pivot point: 104.44

USD/JPY – Trading Tips

The USD/JPY continues to trade in a fresh choppy range of 104.700 – 104.056 level. On the higher side, a bullish breakout of 104.700 resistance can extend the buying trend until the next resistance area of 104.700 and 105.063 level. On the lower side, the support continues to hold around 104.056 and 103.667 level. The MACD suggests an overbought situation of the USD/JPY pair; thus, we should look for selling trade below 104.598 and buying above the same. Good luck! 

Categories
Forex Signals

USD/CAD Choppy Trading in Play – Brace for a Breakout! 

The USD/CAD closed at 1.30921 after placing a high of 1.30967 and a low of 1.30387. The USD/CAD pair remained on the upward momentum on Friday despite the strength in WTI Crude Oil prices and the Canadian Dollar amid the positive optimism regarding the vaccines. The optimism surrounding the vaccine development from Pfizer and Moderna was also followed by Oxford, the Russian Sputnik V, and China’s Sinovac and raised the market’s risk-on sentiment that supported the risk perceived USD/CAD pair on Friday.

On the data front, at 18:30 GMT, the Core Retail Sales from Canada raised to 1.0% against the expectations of 0.0% and supported the Canadian Dollar. For September, the Retail Sales also grew to 1.1% from the forecasted 0.2% and kept the Canadian Dollar. The NHPI for October came in line with the projection of 0.8%. At 18:32 GMT, the Corporate Profits for the quarter from Canada also came in line with the anticipations of 44.9%.

The Canadian Dollar was strong across the board on Friday due to supportive macroeconomic data and the rising Crude oil prices. The WTI crude oil was higher on Friday above the $42.5 level after the increased optimism about the coronavirus vaccines from across the world. The rising crude oil prices also supported the commodity-linked currency Loonie that capped further USD/CAD pair gains.

Meanwhile, the Canadian health officials warned that daily coronavirus infections could reach 60K per day by the end of December from their current level of 4.8K if people continue to increase their number of daily contacts. The Canadian PM Justin Trudeau said that Canada saw a massive spike in cases and that there was a risk that hospitals could get overwhelmed. He also said that it was frustrating that Canadians would have to do more to contain the virus from what they did weeks ago. These virus tensions across the North kept the Canadian Dollar weak and supported the rising USD/CAD prices on Friday. 

On the US dollar front, the Dollar was strong across the board as the US Federal Reserve Chairman refrained from providing any clues about further easing in the upcoming Fed meeting and supported the USD/CAD pair’s upward momentum.


Daily Technical Levels:

Support Resistance

1.3039 1.3114

1.3007 1.3157

1.2964 1.3189

Pivot point: 1.3082

The USD/CAD pair is trading sideways in between the narrow range of 1.3120 – 1.3045 level. Investors seem to wait for a solid reason to trigger a breakout of the choppy range. The idea will be take a sell USD/CAD pair below 1.3045 level until 1.2937. Conversely, the continuation of a bullish trend over 1.3120 can lead the USD/CAD pair towards 1.3245. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, November 20 – Top Trade Setups In Forex – Eyes on Retail Sales!

The broad-based U.S. dollar failed to stop its overnight losses and remain bearish on the day mainly due to the mixed U.S. Stimulus story. Moreover, the doubts over the U.S. economic recovery in the wake of coronavirus resurgence also weigh on the U.S. dollar. On the news front, eyes will remain on U.K.’s and Canada’s core retail sales to determine further market trends. 

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD currency pair managed to stop its previous day losing streak and remain bullish around the 1.1886 level mainly due to the broad-based U.S. dollar selling bias, triggered by the cautious sentiment around the U.S. stimulus story, which ultimately lends support to the currency pair. However, Mnuchin’s call to recollect funds allocated to Federal Reserve, which eventually weighed on the market trading sentiment, failed to provide any support to the greenback as the Republican heavyweight McConnell recently showed readiness to resume the discussions with the Democrats on a new COVID-19 relief package, which ultimately undermined the U.S. dollar. 

That’s very surprising as the U.S. dollar usually draws bids alongside losses in the equities market. On the contrary, the buying interest around the single currency was capped by the intensifying virus fugues in Europe, which eventually becomes the key factor that has been capped further upside in the currency pair. At the moment, the EUR/USD currency pair is currently trading at 1.1888 and consolidating in the range between the 1.1865 – 1.1891.

The equity market has been declining since the day started amid mixed concerns over the U.S. stimulus story. The Mnuchin’s asked the Federal Reserve to return the remaining coronavirus stimulus funds, which could limit the central bank’s capacity to give additional support to businesses at a time when the coronavirus second wave is accelerating. Let me remind you that these funds were meant for global lending to local government, non-profits, businesses. These factors have been weighing on the market trading sentiment, which could be considered as the main factors that cap further downside in the safe-haven U.S. dollar losses.

On the contrary, Republican heavyweight McConnell recently showed a willingness to continue the negotiations with the Democrats on a new COVID-19 relief package. This news is negative for the U.S. dollar, as a stimulus package would have the effect of reducing the U.S. dollar.

As in result, the broad-based U.S. dollar failed to stop its overnight losses and remain bearish on the day mainly due to the mixed U.S. Stimulus story. Moreover, the doubts about the U.S. economic recovery in the wake of coronavirus resurgence also weigh on the U.S. dollar. Thus, the U.S. dollar losses could also be a key factor that kept the currency pair higher. Meantime, the dollar index unchanged at 92.306 (=USD), off Thursday’s low of 92.236, though it is still down 0.3% on the week.

On the bearish side, the intensifying market worries regarding the continuous hike in new coronavirus cases in Europe and the United States keep fueling the doubts over the global economic recovery through imposing back to back lockdown restrictions on economic and social activity, which eventually weighed on the shared currency and becomes the key factor that kept the lid on any additional gains in the currency pair. 

In the absence of significant data/events on the day, the market traders will keep their eyes on the ongoing drama surrounding the U.S. stimulus package. In the meantime, the risk catalyst like geopolitics and the virus woes, not to forget the Brexit, will also be key to watch for a fresh direction. 

Daily Technical Levels

Support   Resistance

1.1836       1.1880

1.1820       1.1908

1.1791       1.1924

Pivot point: 1.1864

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

During Friday’s European trading session, the GBP/USD currency pair managed to gain positive traction for the second straight session and refresh the intra-day high around closer to 1.3300 level mainly due to the broad-based U.S. dollar fresh weakness, backed by the doubts over the next round of the U.S. fiscal stimulus measures, which eventually undermined the U.S. dollar and contributed to the currency pair gains. 

On the contrary, the worsening coronavirus (COVID-19) conditions in the U.S. and Europe raised the fears of global economic recovery, which could be considered one of the key factors that kept the lid on any additional gains in the currency pair. In the meantime, the gains in the currency pair were also capped by negative Brexit news. At a particular time, the GBP/USD currency pair is currently trading at 1.3275 and consolidating in the range between 1.3247 – 1.3288.

According to the latest report, the European Union (E.U.) prepares for no-deal Brexit plans after the discussions’ dragging. The fears of no-deal Brexit were further bolstered after E.U.’s Chief Negotiator Michel Barnier self-isolated after a member of his team contracted the infection.

Despite the fears of no-deal Brexit and the Sino-American skirmish, not to forget the record single-day increase in COVID-19 cases, the currency pair managed to gain positive traction amid a weaker U.S. dollar. At the USD front, the broad-based U.S. dollar failed to gain any positive traction and edged lower on the day as doubts over the U.S. economic recovery remain amid the coronavirus crisis. The losses in the U.S. dollar kept the currency pair higher. Meantime, the dollar index unchanged at 92.306 (=USD), off Thursday’s low of 92.236, though it is still down 0.3% on the week.

In the absence of significant data/events on the day, the market traders will keep their eyes on the ongoing drama surrounding the U.S. stimulus package. In the meantime, the risk catalyst like geopolitics and the virus woes, not to forget the Brexit, will also be key to watch for a fresh direction. 

Daily Technical Levels

Support    Resistance

1.3155       1.3236

1.3118       1.3280

1.3073       1.3317

Pivot point: 1.3199

GBP/USD– Trading Tip

Most technical levels are the same as Sterling didn’t make any significant change in the market. The GBP/USD pair is trading bullish at the 1.3279 level, holding over the 1.3227 support level, which is extended by an upward trendline on a 2-hour timeframe. The Cable is likely to face immediate resistance at the 1.3297 area, which will be confirmed if the candle starts closing below this level. However, the bullish breakout of the 1.3297 level can drive further upside movement until the 1.3370 level today. 


USD/JPY – Daily Analysis

A day before, the USD/JPY pair was closed at 103.795 after placing a high of 104.207 and a low of 103.650. The currency pair USD/JPY remained bearish for the 5th consecutive session on Wednesday and dragged its prices below the 103.700 level. The USD/JPY pair was extending its losses due to the U.S. dollar weakness on Wednesday despite the latest optimism regarding the coronavirus vaccine. On Wednesday, Pfizer announced that its vaccine was 95% effective in its study and planning to seek authorization within days.

This news added to the market’s risk sentiment and supported the equity market by providing a 0.45% gain to Dow Jones and 0.04% to NASDAQ. The latest news from Pfizer and BioNtech failed to impress the market, and the pair USD/JPY continued following the U.S. dollar’s weakness on Wednesday. The currency pair was under pressure as the coronavirus situation was getting worse day by day in the U.S. as the death toll surpassed 250,000 level in the major economy. According to Johns Hopkins University, the coronavirus has cost almost 250,180 American lives so far, and the count was increasing day by day. This raised fears that more restrictions could be imposed in many states, which would slow down the economic recovery. These fears weighed in the local currency U.S. dollar, and hence, USD/JPY remained under pressure for the 5th consecutive session on Wednesday.

Given the rising number of infections in the country, the States like California and Illinois stretched their restrictions to battle the rising number of cases as any financial aid package was not close to being delivered by Congress. The rising number of coronavirus cases in the U.S. has forced U.S. officials to announce that public schools in New York City will close again on Thursday as the city has reached a 3% coronavirus test positivity rate. These fears also kept the U.S. dollar under pressure on Wednesday.

The House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer urged the Senate Majority Leader Mitch McConnell to resume talks related to the coronavirus relief package. However, McConnell was insisting on a targeted package. The U.S. dollar came under further pressure after the hopes for the talks for further stimulus package increased and weighed on the USD/JPY pair.

On the data front, at 02:00 GMT, the TC Long Term Purchases surged to 108.9B from the expected 41.5B and supported the U.S. dollar. At 18:30 GMT, the Building Permits for October came in line with the projections of 1.55M. The Housing Starts rose to 1.53M from the expected 1.45M and supported the U.S. dollar that ultimately capped further losses in the USD/JPY on Wednesday. On the Japanese side, the Trade Balance for October raised to 0.31T against the 0.11T and supported the Japanese Yen that added further pressure on the USD/JPY pair on Wednesday.

Daily Technical Levels

Support    Resistance

103.58       104.16

103.32       104.48

102.99       104.74

Pivot point: 103.90

USD/JPY – Trading Tips

The USD/JPY extends its bearish trend below the 104.430 level, falling from the 104.850 support area. On the lower side, the USD/JPY pair is likely to find support at the 103.800 level, and violation of this level can also extend further selling bias until 103.227. On the higher side, the USD/JPY safe-haven pair may find resistance at 104.400 and may help us capture a selling trades below this level as the MACD and RSI support the selling trend today. Good luck! 

Categories
Forex Signals

Choppy Session Continues in USD/CAD – Brace for a Breakout! 

The USD/CAD closed at 1.30858 after placing a high of 1.31174 and a low of 1.30341. The USD/CAD pair declined on Wednesday amid the broad-based US dollar weakness and the Canadian dollar’s strength on the day. The risk sentiment was improved on Wednesday after Pfizer and BioNtech said that their vaccine was 95% effective in their study. They were going to seek approval from the US for emergency authorization of vaccine in the coming days. This news raised optimism in the market that vaccines will be delivered soon and would help the global economy recover.

The rising risk-sentiment in the market helped risk perceived Canadian dollar gain traction against the US dollar that ultimately added pressure on the USD/CAD pair. Meanwhile, the US dollar was already weak across the board after the chances for a further stimulus package from Congress increased after House Speaker Nancy Pelosi and the Senate Minority Leader Chuck Schumer urged the Senate Majority Leader McConnell to start the talks for fiscal aid.

The US was reporting a rising rate of infection cases that were weighing on its local currency as the virus’s spread was costing record lives. According to Johns Hopkins University, the death toll in the US raised to 250,180, and the fears for economic shutdown to control the virus from being spread increased. The US officials also announced to close the New York schools again from Thursday to fight the pandemic.

The inefficiency of Trump’s administration during the pandemic crisis has cost the United States many American lives. The recent Trump’s refusal to give in his presidency to Joe Biden has also created chaos in the economy has weighed heavily on the US dollar. The US dollar weakness added further to the losses of the USD/CAD pair on Wednesday.

Furthermore, on the data front, at 02:00 GMT, the TC Long Term Purchases rose to 108.9B from the anticipated 41.5B and supported the US dollar. At 18:30 GMT, the Building Permits for October remained flat at 1.55M. The Housing Starts raised to 1.53M from the projected 1.45M and supported the US dollar that ultimately capped further losses in the USD/CAD pair.

From the Canadian side, the Consumer Price Index for October rose to 0.4% against the expected 0.2% and supported the Canadian dollar that weighed on the USD/CAD pair. The Common CPI for the year also surged to 1.6% against the anticipated 1.5% and supported the Canadian dollar that added losses in the USD/CAD pair. The Median and Trimmed CPI for the year came in line with the expectations of 1.9% and 1.8%, respectively.

The positive macroeconomic data and the rising WTI crude oil prices on Wednesday supported the commodity-linked Loonie. The crude oil prices raised above $43.4 per barrel despite the increasing number of crude oil inventories from the US and supported the Loonie that weighed on the USD/CAD pair.


Daily technical Levels

Support Resistance

1.3036 1.3122

1.2991 1.3163

1.2949 1.3208

Pivot Point: 1.3077

The USD/CAD pair is trading over the 1.3060 level, mostly supported by the Retail Sales. A bearish breakout of the 1.3040 level can drive the selling trend until the 1.2935 area. While on the other hand, the resistance stays at the 1.3173 level today. The MACD and RSI support the selling trend; thus, we may consider taking a selling trade only upon the breakout of the 1.3055 level and buying over the 1.3060 level. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, November 19 – Top Trade Setups In Forex – U.S. Jobless Claims in Focus! 

The economic calendar is filled with medium impact economic events such as Unemployment Claims, C.B. Leading Index m/m, and Existing Home Sales from the United States on the news front. Besides, the Current Account from the Eurozone will also remain in the highlights today. The market may show some price action during the U.S. session on the release of U.S. Jobless Claims.

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18539 after placing a high of 1.18908 and a low of 1.18491. The EUR/USD pair dropped on Wednesday after placing gains for four consecutive days. The EUR/USD pair remained on an upbeat track last days amid the market sentiment’s risk-on market sentiment due to the vaccine optimism. The riskier currencies gathered strength against the safe-havens like the USD and posted gains over the last week. However, on Wednesday, the EUR/USD pair started to decline as Europe’s lockdown situation started to raise fears for economic recovery.

However, the second wave of the coronavirus in Europe started to show signs of slowing. The latest numbers showed a stabilization in new cases in Germany, Spain, Italy and a decline in Belgium, France, and the Netherlands. Despite this, the experts have warned that it was too early to get complacent. The lockdowns and tough social restrictions were reintroduced across numerous European countries in October due to the increased spread of the second wave of coronavirus. These restrictions have been placing a threat on European nations’ economic recovery and weighed on Euro currency that has dragged the EUR/USD pair down on Wednesday.

On the data front, at 02:00 GMT, the TC Long Term Purchases from the U.S. raised to 108.9B against the forecasted 41.5B and supported the U.S. dollar that ultimately added losses in the EUR/USD pair. At 18:30 GMT, the Building Permits from October remained flat with the anticipations of 1.55M. The Housing Starts were raised to 1.53M from the projected 1.45M and supported the U.S. dollar that weighed on EUR/USD pair on Wednesday.

From the European side, at 15:00 GMT, the Final CPI for the year came in line with the expectations of -0.3%. The Final CPI for the year also remained flat as expected, 0.2%. European data failed to impact the EUR/USD pair on Wednesday, and the pair continued following the U.S. dollar’s movement.

The losses in the EUR/USD pair were limited after the risk sentiment was improved in the market due to the latest optimism regarding the coronavirus vaccine. Pfizer and BioNtech announced that they would be filing for emergency authorization of their vaccine in the coming days from the U.S. This raised the optimism that vaccines will soon be available in the market, and the chaos will be lifted from the economy, and it will start to recover. The riskier currency Euro gained traction and capped further losses in the EUR/USD pair on Wednesday.

Daily   Technical Levels

Support Resistance

1.1836      1.1880

1.1820      1.1908

1.1791      1.1924

Pivot point: 1.1864

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

The GBP/USD closed at 1.32670 after placing a high of 1.33120 and a low of 1.32410. The pair GBP/USD continued its bullish momentum for the 4th consecutive day on Wednesday and reached near 1.33200 level. The latest rise in the GBP/USD pair was driven by the growing hopes that a Brexit deal could be within reach after the French President Emmanuel Macron was ready to cave in on demands from the U.K. for full sovereignty waters that will likely rein in access for French fishermen.

This news raised hopes for a Brexit deal before the end of the transition period and supported the British Pound that ultimately lifted the GBP/USD pair higher on board. The Irish Minister Micheal Martin also said that a landing zone for an agreement was within sight just a day ahead of the European Union Summit when the E.U. Brexit negotiator Michel Barnier will brief E.U. leaders about the two weeks of talks held with the U.K.

Chances are increased that an agreement will be made as soon as Monday and will be approved within a week, most likely at the next E.U. Summit on December 10. After that, the European Parliament would have to rubberstamp the agreement to ensure a deal was placed before the end of the transition period on Dec.31st.

All these hopes lifted the British Pound as the chances of a deal were clear for the first time, and things were going in favor of the U.K. However, analysts were concerned that inflation was likely to slow in the months ahead. The GBP/USD pair picked up its pace towards an upward direction due to renewed Brexit optimism and reached near 1.3200 level on Wednesday. On the data front, At 12:00 GMT, the Consumer Price Index for the year raised to 0.7% from the expected 0.5% and supported the Sterling. The year’s Core CPI also raised to 1.5% against the anticipated 1.3% and supported British Pound. The RPI from the U.K. also rose to 1.3% from the expected 1.2% and supported British Pound that ultimately added further gains in GBP/USD pair. At 12:02 GMT, the PPI Input for October surged to 0.2% against the expected 0.0% and supported the British Pound. At the same time, the PPI Output in October remained flat with the expectations of 0.0%. The Housing Price Index from the U.K. also surged to 4.7% against the forecasted 2.9% and supported the British Pound.

The U.K.’s positive macroeconomic data supported the British Pound against the U.S. dollar and raised the GBP/USD pair on Wednesday.

While from the U.S. side, at 02:00 GMT, the TC Long Term Purchases rose to 108.9B against the anticipated 41.5B and supported the U.S. dollar. At 18:30 GMT, the Building Permits for October remained flat with the projections of 1.55M. The Housing Starts surged to 1.53M from the anticipated 1.45M and supported the U.S. dollar that ultimately capped further gains in GBP/USD pair on Wednesday.

Meanwhile, the Bank of England’s Chief Economist Andy Haldane said that the economic outlook for 2021 was materially brighter than he had expected just a few weeks ago despite the short-term uncertainty from a renewed coronavirus lockdown in England. He said that Britain’s economy shrank by almost 20% in the second quarter of 2020, more than any other peer economy, and at the end of September, it was still 8.4% smaller than a year before. He struck a somewhat positive note in line with his previous assessments of Britain’s recovery on Wednesday that raised the British Pound on board against the U.S. dollar. This also benefited the GBP/USD pair on Wednesday, and hence, the pair ended its day with a bullish candle.

Daily Technical Levels

Support   Resistance

1.3155      1.3236

1.3118      1.3280

1.3073      1.3317

Pivot point: 1.3199

GBP/USD– Trading Tip

The GBP/USD pair is trading bullish at the 1.3279 level, holding over the 1.3227 support level, which is extended by an upward trendline on a 2-hour timeframe. The Cable is likely to face immediate resistance at the 1.3297 area, which will be confirmed if the candle starts closing below this level. However, the bullish breakout of the 1.3297 level can drive further upside movement until the 1.3370 level today. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 103.795 after placing a high of 104.207 and a low of 103.650. The currency pair USD/JPY remained bearish for the 5th consecutive session on Wednesday and dragged its prices below the 103.700 level. The USD/JPY pair was extending its losses due to the U.S. dollar weakness on Wednesday despite the latest optimism regarding the coronavirus vaccine. On Wednesday, Pfizer announced that its vaccine was 95% effective in its study and planning to seek authorization within days.

This news added to the market’s risk sentiment and supported the equity market by providing a 0.45% gain to Dow Jones and 0.04% to NASDAQ. The latest news from Pfizer and BioNtech failed to impress the market, and the pair USD/JPY continued following the U.S. dollar’s weakness on Wednesday.

The currency pair was under pressure as the coronavirus situation was getting worse day by day in the U.S. as the death toll surpassed 250,000 level in the major economy. According to Johns Hopkins University, the coronavirus has cost almost 250,180 American lives so far, and the count was increasing day by day. This raised fears that more restrictions could be imposed in many states, which would slow down the economic recovery. These fears weighed in the local currency U.S. dollar, and hence, USD/JPY remained under pressure for the 5th consecutive session on Wednesday.

Given the rising number of infections in the country, the States like California and Illinois stretched their restrictions to battle the rising number of cases as any financial aid package was not close to being delivered by Congress. The rising number of coronavirus cases in the U.S. has forced U.S. officials to announce that public schools in New York City will close again on Thursday as the city has reached a 3% coronavirus test positivity rate. These fears also kept the U.S. dollar under pressure on Wednesday.

The House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer urged the Senate Majority Leader Mitch McConnell to resume talks related to the coronavirus relief package. However, McConnell was insisting on a targeted package. The U.S. dollar came under further pressure after the hopes for the talks for further stimulus package increased and weighed on the USD/JPY pair.

On the data front, at 02:00 GMT, the TC Long Term Purchases surged to 108.9B from the expected 41.5B and supported the U.S. dollar. At 18:30 GMT, the Building Permits for October came in line with the projections of 1.55M. The Housing Starts rose to 1.53M from the expected 1.45M and supported the U.S. dollar that ultimately capped further losses in the USD/JPY on Wednesday. On the Japanese side, the Trade Balance for October raised to 0.31T against the 0.11T and supported the Japanese Yen that added further pressure on the USD/JPY pair on Wednesday.

Daily Technical Levels

Support   Resistance

103.58      104.16

103.32      104.48

102.99      104.74

Pivot point: 103.90

USD/JPY – Trading Tips

The USD/JPY extends its bearish trend below the 104.430 level, falling from the 104.850 support area. On the lower side, the USD/JPY pair is likely to find support at the 103.800 level, and violation of this level can also extend further selling bias until 103.227. On the higher side, the USD/JPY safe-haven pair may find resistance at 104.400 and may help us capture a selling trades below this level as the MACD and RSI support the selling trend today. Good luck! 

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Forex Signals

AUD/USD Upward Channel Supports – Choppy Session in Play!

The AUD/USD was closed at 0.72998 after placing a high of 0.73393 and a low of 0.72887. After placing gains for two consecutive days, the AUD/USD pair was declined on Tuesday amid the risk-off market sentiment. On Tuesday, the Assistant Governor of Reserve Bank of Australia, Dr. Kent, said that the Aussie’s recent rise was due to the optimistic news of the coronavirus vaccine rather than about the US Presidential election outcome. He said that any positive news about vaccine development would be a good thing for the global economy, including the Australian economy.

Over the chances of negative interest rates by the Reserve Bank of Australia, Kent said it was extraordinarily unlikely that the bank would go for it. These comments from Kent failed to provide any specific movement in AUD/USD pair. Meanwhile, the minutes from the Reserve Bank of Australia were released on Tuesday, showing that the central bank was ready to provide more policy stimulus if needed after cutting rates to record lows. The bank’s board felt taking interest rates negative was not sensible, and any further action would involve increasing bond purchases.

The minutes revealed that the bank has decided to cut its main cash rate by 15 basis points to just 0.1% and launch a new bond-buying program. The board was ready to do more in need, and the focus over the period ahead will be the government bond purchase program. Moreover, on the data front, from the US side, at 19:00 GMT, the Capacity Utilization Rate raised to 72.8% against the estimated 72.3%. It supported the US dollar added further losses in the AUD/USD pair. The Industrial Production came in line with the anticipations of 1.1% in October. At 20:00 GMT, the Business Inventories for September rose to 0.7% against the expected 0.5% and weighed on the US dollar. The NAHB Housing Market Index from the US surged to 90 from the expected 85 and supported the US dollar that weighed on AUD/USD pair.

Another aspect included in the AUD/USD pair’s downward momentum was the risk-off market sentiment due to the rising coronavirus cases across the globe. The second wave of coronavirus forced many governments to re-impose restrictions that raised economic recovery concerns and increased the appeal for safe-haven that weighed on the AUD/USD pair on Tuesday.


Daily technical Levels
Support Resistance
0.7278 0.7329
0.7257 0.7361
0.7226 0.7381
Pivot point: 0.7309

The AUD/USD pair’s technical side hasn’t changed much as it continues to trade around the 0.7291 level, holding below an immediate resistance area of 0.7330 level. The AUD/USD is likely to remain supported over the 0.7270 level, and it may find resistance around the 0.7330 mark. A bearish breakout of the 0.7272 level can extend the selling trend until the 0.7260 level today; let’s keep an eye on the 0.7290 level as below this selling trend can be seen and vice versa. Good luck!

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Forex Market Analysis

Daily F.X. Analysis, November 18 – Top Trade Setups In Forex – Series of Inflation Reports Ahead! 

On the news front, eyes will remain on the low and medium series impacts economic evens from U.K., Eurozone, and Canada. Its the CPI figures which are coming from all three major economies during European and the U.S. sessions. The U.K. and Eurozone Inflation reports are expected to remain neutral, with no major change expected, and these may have a muted impact on the market. However, the Canadian CPI is expected to perform slightly better, surging by 0.2% vs. -0.1% dip during the previous month. It may support Lonnie pairs today.

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18605 after placing a high of 1.18935 and a low of 1.18423. The EUR/USD pair continued to move in bullish track for the 4th consecutive day on Tuesday amid the downbeat economic data from the U.S. and broad-based U.S. dollar weakness. The improved risk sentiment in the market continued supporting the EUR/USD pair on Tuesday in the early trading session, which pushed the currency pair towards a fresh weekly high at 1.1894. The risk sentiment was supported by the latest optimism from the vaccine candidates of Pfizer and Moderna. After the latest announcement from Moderna that its vaccine was 94.5% effective in last stage trials, the risk sentiment picked its pace and favored the riskier assets like EUR/USD pair.

However, the currency pair could not remain on the top for long and started losing some of its daily gains on Tuesday amid the risk-off market environment in the second half of the day. The U.S. dollar gained traction in the second half and weighed on the currency pair EUR/USD after the chances for a further stimulus package from Congress declined.

The U.S. Dollar Index was down to an 8-day lowest level of 92.26 in the first half of the day because of the rising number of coronavirus cases and lockdown restrictions in the economy. The increased number of coronavirus cases from the U.S. forced governments to impose restrictive measures to control the spread of the virus, and the chances for quick economic recovery faded that ultimately weighed on the U.S. dollar and helped EUR/USD pair to reach a new weekly high level.

However, the U.S. dollar lost its momentum after the release of its macroeconomic data on Tuesday. At 18:30 GMT, the Core Retail Sales for October dropped to 0.2% from the estimated 0.6% and weighed on the U.S. dollar. In October from the U.S., the Retail Sales also dropped to 0.3% from the expected 0.5% and weighed on the U.S. dollar. The Import Prices in the U.S. for October were declined to -0.1% from the estimated 0.2%and weighed on the U.S. dollar that helped EUR/USD pair to post gains.

At 19:00 GMT, the Capacity Utilization Rate from the U.S. raised to 72.8% against the forecasted 72.3% and supported the U.S. dollar that capped further gains in EUR/USD pair. The Industrial Production remained flat with the anticipations of 1.1% in October. At 20:00 GMT, the Business Inventories for September surged to 0.7% against the projected 0.5% and weighed on the U.S. dollar. The NAHB Housing Market Index from the U.S. surged to 90 from the estimated 85 and supported the U.S. dollar that eventually weighed on the EUR/USD pair and capped further gains.

From the European side, at 14:02 GMT, the Italian Trade Balance raised to 5.85B against the forecasted 4.30B. It supported the single currency Euro that ultimately added gains in the EUR/USD pair.

Furthermore, the European Central Bank President, Christine Lagarde, sounded pessimistic on Tuesday concerning the economic outlook and said that there was very negative news on the second wave of coronavirus in the economy before vaccine news. She expected a massive effect of the second wave of COVID-19 on the European economy into 2021. These comments from Lagarde also kept the pair EUR/USD under pressure on Tuesday.

Daily Technical Levels

Support   Resistance

1.1837      1.1890

1.1814      1.1918

1.1785      1.1942

Pivot Point: 1.1866

EUR/USD– Trading Tip

The EUR/USD is trading with a bullish bias, holding mostly above the upward trendline support level of 1.1850. Closing of candles above the 1.1869 level is likely to drive bullish movement in the EUR/USD pair until the 1.1885 level. The bullish bias remains dominants today as the MACD and 50 periods EMA support a bullish trend. We are already holding a buying trade from yesterday; therefore, you are advised to follow our forex signals page for more updates on the EUR/USD pair. 


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.32483 after a high of 1.32724 and a low of 1.31863. The GBP/USD pair raised and continued its bullish track for 3rd consecutive day on Tuesday amid the latest Brexit hopes.

Due to the increased number of COVID-19 cases from across the globe, and the restrictive measures by countries to curb the virus’s spread, the demand for safe-haven currencies increased. In contrast, the riskier currencies like the British Pound remained under pressure.

The Sterling remained supportive in this risk-off mode due to the latest comments from the U.K. chief negotiator, David Frost, that boosted the Brexit deal’s confidence. According to a news report by the U.K. newspaper, The Sun, the previous concerns about the differences in key issues vanished after Britain’s chief negotiator David Frost commented to Boris Johnson that he expects a trade deal signed early next week.

After these comments from David Frost, the GBP/USD pair rallied and started moving upward for the 3rd consecutive day.

Meanwhile, the risk sentiment buoyed by the latest optimism regarding the vaccine development from Moderna also supported the British Pound’s bullish momentum and added further to the gains of the GBP/USD pair on Tuesday. Furthermore, the U.S. dollar weakness also played an important role in pushing the currency pair GBP/USD higher on Tuesday with poor macroeconomic figures. At 18:30 GMT, the Core Retail Sales for October declined to 0.2% from the expected 0.6% and weighed on the U.S. dollar. In October from the U.S., the Retail Sales also fell to 0.3% from the anticipated 0.5% and weighed on the U.S. dollar. The Import Prices in the U.S. for October fell to -0.1% against the projected 0.2%and weighed on the U.S. dollar that added further gains in the GBP/USD pair on Tuesday.

At 19:00 GMT, the Capacity Utilization Rate from the U.S. surged to 72.8% against the anticipated 72.3% and supported the U.S. dollar that capped further gains in GBP/USD pair. The Industrial Production came in line with the projections of 1.1% in October. At 20:00 GMT, the Business Inventories for September increased to 0.7% against the estimated 0.5% and weighed on the U.S. dollar, which added strength to the GBP/USD pair. The NAHB Housing Market Index from the U.S. rose to 90 from the projected 85 and supported the U.S. dollar.

Meanwhile, the governor of Bank of England, Andrew Bailey, said that the development of seemingly effective coronavirus vaccines was a bigger step forward for the economy that could lower uncertainty and get firms to reinvest. He also said that the business investment had been unusually weak since the financial crisis and weighting on productivity. Bailey also said that the changes due to coronavirus would more likely be within the services sector as it can be seen with a focus on digital services over the face to face work taking hold. Moreover, the Bank of England Deputy Governor Dave Ramsden said that positive news about the coronavirus vaccine could help reduce the risks facing Britain’s economy. Still, the central bank was unlikely to revise up its forecasts as a result.

Daily Technical Levels

Support   Resistance

1.3155      1.3236

1.3118      1.3280

1.3073      1.3317

Pivot point: 1.3199

GBP/USD– Trading Tip

The GBP/USD pair is trading bullish at the 1.3279 level, holding over the 1.3227 support level, which is extended by an upward trendline on a 2-hour timeframe. The Cable is likely to face immediate resistance at the 1.3297 area, which will be confirmed if the candle starts closing below this level. However, the bullish breakout of the 1.3297 level can drive further upside movement until the 1.3370 level today. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.184 after placing a high of 104.598 and a low of 104.069. The pair USD/JPY continued its bearish trend for the 4th consecutive day on Tuesday amid broad-based U.S. dollar weakness and Japanese yen strength due to safe-haven appeal.

On Tuesday, the USD/JPY pair fell below 104.1 level after the safe-haven demand rose due to the increasing number of coronavirus cases and the restrictions from all over the world. Many countries started imposing restrictive measures to control the spread of coronavirus that raised concerns over the global economy’s recovery that lifted the safe-haven appeal. The rising safe-haven demand supported the safe-haven Japanese Yen and weighed on the USD/JPY pair on Tuesday.

The safe-haven demand deteriorated a little after the latest optimism regarding the vaccine development from Moderna that gave an efficacy rate of 94.5%. However, there was still a long way to go before the vaccine can be delivered to everyone. According to Federal Reserve Vice Chairman Richard Clarida, the chances for the U.S. economic recovery have been improved due to candidates’ successful test from both Moderna and Pfizer Inc.

On the U.S. front, the U.S. dollar was weak due to the poor macroeconomic data on Tuesday. At 18:30 GMT, the Core Retail Sales for October fell to 0.2% from the anticipated 0.6% and weighed on the U.S. dollar that added pressure on the USD/JPY pair. In October from the U.S., the Retail Sales also declined to 0.3% from the forecasted 0.5% and weighed on the U.S. dollar that weighed on USD/JPY pair. The Import Prices in the U.S. for October were declined to -0.1% from the estimated 0.2%and weighed on the U.S. dollar added pressure on the USD/JPY pair.

At 19:00 GMT, the Capacity Utilization Rate from the U.S. surged to 72.8% against the estimated 72.3% and supported the U.S. dollar that capped further losses in the USD/JPY pair. The Industrial Production came in line with the anticipations of 1.1% in October. At 20:00 GMT, the Business Inventories for September rose to 0.7% against the projected 0.5% and weighed on the U.S. dollar that added pressure on the USD/JPY pair. The NAHB Housing Market Index from the U.S. surged to 90 from the expected 85 and supported the U.S. dollar that eventually capped further losses in the USD/JPY pair.

Moreover, the Federal Reserve Chairman, Jerome Powell, said on Tuesday that as the coronavirus cases were increasing to an alarming rate, it was the time when there was a bigger need for further coronavirus relief from Congress. Powell also noted that the recent announcements from Pfizer and Moderna were certainly good news in the medium term; however, major challenges and uncertainties remain in the near term.

Powell also said that Congress should deliver direct financial support targeted to specific groups instead of using the Federal Reserve’s lending tools. Powell’s comments also weighed on the USD/JPY pair as the need for further support from the Fed and Congress weighed on the U.S. dollar.

Daily Technical Levels

Support   Resistance

103.95      104.51

103.73      104.85

103.39      105.08

Pivot point: 104.29

USD/JPY – Trading Tips

The USD/JPY extends its bearish trend below the 104.430 level, falling from the 104.850 support area. On the lower side, the USD/JPY pair is likely to find support at the 103.800 level, and violation of this level can also extend further selling bias until 103.227. On the higher side, the USD/JPY safe-haven pair may find resistance at 104.400 and may help us capture a selling trades below this level as the MACD and RSI support the selling trend today. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, November 17 – Top Trade Setups In Forex – Retail Sales in Focus! 

TheThe eyes will remain on the retail sales, Capacity Utilization Rate, and Industrial Production from the United States on the news side on the news side. Retail sales are expected to drop, and they may place bearish pressure on the U.S. dollar. At the same time, the Capacity Utilization Rate and Industrial Production are expected to perform better.

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18537 after placing a high of 1.18686 and a low of 1.18139. EUR/USD pair remained on positive foot for the 3rd consecutive day and posted gains on Monday. In the early trading session, risk sentiment started to dominate financial markets after Moderna announced that its COVID vaccine candidate showed 94.5% effectiveness in the latest trials. However, the single currency Euro found it hard to take advantage of the improved market mood since the European Central Bank made it clear that they will act in the upcoming December meeting.

While speaking at an event on Monday, the European Central Bank and policymaker Pablo Hernandez de Cos said that foreign exchange moves between the USD and the EUR had reached a concerning phase. De Cos further said that the monetary aid should be increased to avoid market destruction, given the worsening outlook for economic activity and inflation.

These comments from ECB policymaker, along with the hopes for further easing from ECB next month, exerted high pressure on the single currency that capped further gains in EUR/USD pair on Monday. However, the currency pair remained positive for the day, even though the European economy was hit hard by the coronavirus pandemic.

According to Johns Hopkins University, more than 54 million people had been infected by COVID-19 globally. In Europe, governments scrambled amid an alarming rise in numbers as France’s health authorities reported 9406 new cases on Monday. Germany postponed its decision on further lockdown measures until next week.

The German Chancellor Angela Merkel said that she wanted to impose further restrictions immediately, but she did not have a majority, so the decision was postponed until November 25. The tightening of lockdown measures was something nobody wanted, and that helped the single currency Euro and supported it. Meanwhile, Sweden placed a nationwide limit of eight people for all gatherings to slow down coronavirus spread. The limit will take effect from November 24 and will last for four weeks.

Despite all these tensions regarding the coronavirus pandemic, the single currency Euro struggled to hold near its best levels against its rival, the U.S. dollar, on Monday. The higher market sentiment also supported Euro amid the coronavirus vaccine news.

On the data front, the Empire State Manufacturing Index for November declined to 6.3 against the forecasted 13.8 and weighed on the U.S. dollar that added gains in EUR/USD pair on Monday. Other than macroeconomic data, the U.S. dollar was already weak in the market due to the rising number of coronavirus cases in the U.S. The weak U.S. dollar added further to the upward movement of the EUR/USD pair.

Daily   Technical Levels

Support Resistance

1.1821      1.1877

1.1789      1.1901

1.1765      1.1932

Pivot point: 1.1845

EUR/USD– Trading Tip

The EUR/USD is trading sideways, holding mostly below the double top resistance level of 1.1860 level. Still, recently it has formed a Doji pattern followed by bullish candles, suggesting that the buyers are exhausted, and sellers may enter into the market soon. Therefore, we can expect the EUR/USD price to trade bearish until the 1.1838 level, the support level extended by an upward trendline on the hourly timeframe. Bullish crossover of 1.1865 level can also trigger buying until 1.1910.


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.31999 after placing a high of 1.32422 and a low of 1.31654. The British Pound was high on Monday as the Brexit talks were resumed between the E.U. and the U.K.

There were increasing signs that little progress could be made in this week’s trade talks. The Brexit optimism with the resumed trade talks drove the British Pound higher on Monday that ultimately pushed the GBP/USD pair on the upside.

However, the pair failed to remain there for long as some investors started giving warning that a deal between the E.U. and the U.K. was unlikely this week in the wake of turmoil in the U.K. government. The two of Prime Minister Boris Johnson’s pro-Brexit advisors, Cummings and Cain, were ousted last week. Moreover, the prospects of failure to reach a deal were fading away with the hopes that if an agreement would not be reached, the deadline could stretch into the final weeks before the end of the transition period on December 31.

The negotiations are potentially stretching into December as the deadline of November 19 was close, and the differences in both sides were larger. Ireland’s foreign minister initially warned that a deal f this size is difficult to reach within a week or ten days, although the talks could continue for a further two weeks. The Brexit deal has left to solve 3 key sticking points, including the level playing field, governance, and fisheries. The control over fisheries has been highlighted as one of the main hindrances, as French President Emmanuel Macron has been reluctant to give Britain’s demand for full sovereignty over access to its waters amid concerns French fishers could lose out.

However, the GBP/USD pair posted gains as the UK PM Boris Johnson’s office said in a statement that they were confident that the U.K. would prosper if they fail to reach a trade deal with the E.U. Apart from Brexit, the GBP/USD pair’s gains were lost a bit after the UK PM Johnson self-isolated himself after having close contact with a coronavirus case despite without symptoms and being well. Johnson has already contracted coronavirus case back in April.

The number of coronavirus cases in the U.K. stayed above 20,000 per day despite the ongoing restrictive measures. Meanwhile, a medical adviser in the U.K. said that the government would have to consider strengthening the three-tier system of restrictions used to control coronavirus spread when the full lockdown in England ends. These tensions kept the GBP/USD pair under pressure on Monday and kept the gains limited.

Meanwhile, a U.S. drugmaker Moderna also announced that its vaccine was proven 94.5% effective in preventing the coronavirus that raised risk sentiment in the market and supported the risk perceived British Pound and added in the gains of GBP/USD pair on Monday. Furthermore, Britain reported that it had secured about five million doses of an experimental coronavirus vaccine developed by Moderna after reporting positive trial results. The health minister Matt Hancock from the U.K. said that the earliest doses are expected for delivery in Spring.

On the data front, the Rightmove HPI from Great Britain was released on Monday at 05:01 GMT, which came in as -0.5% in November against October’s 1.1%. From the U.S. side, the Empire State Manufacturing Index was declined to 6.3 against the forecasted 13.8 and weighed on the U.S. dollar and added strength to GBP/USD pair on Monday.

Daily   Technical Levels

Support Resistance

1.3155      1.3236

1.3118      1.3280

1.3073      1.3317

Pivot point: 1.3199

GBP/USD– Trading Tip

The GBP/USD pair is trading at 1.3208 level, holding over 1.3189 level, which is extended by an upward trendline on a 2-hour timeframe. The Cable has recently crossed over the resistance level of the 1.3185 resistance level as the candle’s closing above this level may drive further upward movement in the market. The MACD and RSI support buying trend, and considering the trendline support and oversold indicators, it is worth giving a buy shot to GBP/USD pair. Let’s consider buying over 1.3160 level today. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.565 after placing a high of 105.135 and a low of 104.361. The pair followed its previous day’s bearish trend and dropped for 3rd consecutive day on Monday. The USD/JPY pair surged to its previous daily high level on Monday in early trading hours after the news from another drug maker came in about their vaccine’s efficiency. The Moderna reported that its vaccine’s last stage clinical trials were 94.5% effective. After this news, Moderna became the second company to announce its results from last stage clinical trials.

This news raised the risk sentiment in the market and weighed on the safe-haven Japanese Yen that kept the USD/JPY pair higher at the beginning of the Asian session. However, the gains started to fade as the market participant realized the difficulty of vaccine availability and its usage. The vaccine requires -70C temperature to be stored to be transported, that is not an easy task. Furthermore, there was also a lack of information regarding the time duration for the immunity induced through the vaccine. This can only be ascertained after the vaccine becomes available to the general public for usage.

These uncertainties raised the market’s safe-haven status and supported the Japanese Yen that ultimately weighed on the USD/JPY pair and forced it to lose some of its earlier daily gains. Meanwhile, on the U.S. front, the U.S. dollar was also weak on the day as the rising number of coronavirus cases raised fears for further restrictions and raised the hopes for further stimulus aid from the government.

The global cases of coronavirus reached 54 million, out of which 11 million were reported from the United States, according to the Johns Hopkins University. The rising number of coronavirus in the United States raised hopes that the Fed will announce further easing or a larger monetary aid to support the economy after the victory of Joe Biden in the U.S. presidential election this month.

Biden always favors a larger stimulus package to provide strength to the economy through the coronavirus crisis. With him becoming the U.S. 46th President, the chances for a massive stimulus bill for the U.S. economy have increased, which started to weigh on the U.S. dollar and ultimately dragged the USD/JPY pair’s prices on the downside.

On the data front, the Prelim GDP Price Index from Japan was released at 04:50 GMT that raised to 1.1% in the 3rd quarter against the expected 1.0% and supported the Japanese Yen that ultimately added further losses in the USD.JPY pair on Monday. The Prelim GDP for the 3rd Quarter from Japan also raised to 5.0% against the projected 4.4% and supported the Japanese Yen that dragged the USD.JPY pair on the downside. On the U.S. front, the Empire State Manufacturing Index in November dropped to 6.3 from the projected 13.8 and weighed on the U.S. dollar that dragged the USD/JPY pair further on the downside.

Daily   Technical Levels

Support Resistance

104.24      105.02

103.91      105.47

103.46      105.81

Pivot point: 104.69

USD/JPY – Trading Tips

The USD/JPY is with a bearish bias at the 104.400 level, falling from the 104.850 support area. On the lower side, the USD/JPY pair is likely to find support at the 104.141 level, and violation of this level can also extend further selling boas until 103.500. On the higher side, the USD/JPY safe-haven pair may find resistance at 104.845 and may help us capture a selling trades below this level as the MACD and RSI support the selling trend today. Good luck! 

Categories
Forex Signals

AUD/USD Maintain Bullish Streak Despite Risk-off Sentiment – Trade Plan!  

Today in the Asian trading session, the AUD/USD currency pair erased some of its earlier gains but still trading on the bullish track and taking rounds just closer to the 0.7250 level, mainly due to the broad-based U.S. dollar weakness. Hence, the broad-based U.S. dollar was being pressured by the doubts persist over the global economic recovery from COVID-19. This, in turn, undermined the greenback and contributed to the currency pair gains. 

On the other hand, the optimism over the coronavirus (COVID-19) vaccine/treatment also lends some minor support to the currency pair by underpinning the perceived risk currency Australian dollar. On the contrary, the intensified clashes between the US-China over the Hong Kong crackdown could be regarded as one of the important factors that might cap further upside momentum for the AUD/USD pair. The AUD/USD pair is currently trading at 0.7237 and consolidating in the range between 0.7228 – 0.7242.

The intensifying market worries regarding the continuous surge in new coronavirus cases in Europe and the United States keep fueling the doubts over the global economic recovery through imposing new lockdown restrictions on economic and social activity, which eventually weighed on the market trading sentiment. As per the recent report, the U.S. coronavirus cases reached a new daily record high, with 140,543 reported. Almost 10.4 million peoples in the U.S. have been infected by the Covid-19 so far. While almost 242,000 have died from this, according to the Johns Hopkins University report. As in result, New York has announced a 10 p.m. curfew on bars, gyms, and restaurants to curb the spread. Afterward, Chicago also followed the footsteps of New York and restricted activities.

In addition to the U.S., Europe also imposed lockdown again last week, threatening the oil outlook and undermining oil prices. It is worth recalling that Sweden declared a partial lockdown shutting down bars and restaurants for the 1st-time since the virus started. Thus, the back to back lockdowns restrictions keep harming the crude oil demand.

Besides the virus woes, the reason for the downbeat market sentiment could also be associated with the long-lasting US-China tussle, which fueled further after the U.S. warned China over the Hong Kong crackdown during the previous day. Apart from this, the Trump administration shows a willingness to limit investments in Chinese companies, fueling the already intensified tussle. 

Despite the risk-off market sentiment, the broad-based U.S. dollar failed to extend its previous day gains. It slipped lower mainly due to the heavy optimism over the potential vaccine for the highly infectious coronavirus disease. Apart from this, coronavirus’s resurgence keeps fueling the fears that the U.S. economic recovery could be halt, which also keeps the USD under pressure. However, the U.S. dollar losses could be considered the major factor that pushes the currency pair higher. Meanwhile, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies dropped to 92.957.

In the absence of the major data/events on the day, the market traders will keep their eyes on the continuous drama surrounding the U.S. stimulus package. In the meantime, the risk catalyst like geopolitics and the virus woes, not to forget the Brexit, will also be key to watch for a fresh direction. 


Daily Support and Resistance

S1 0.7128

S2 0.7186

S3 0.7208

Pivot Point 0.7245

R1 0.7267

R2 0.7304

R3 0.7363

The AUDUSD traded with a bullish bias, but it recently has violated the upward channel at the 0.7245 level. The Aussie has now entered the new region, and it has formed a downward channel on the smaller timeframe now, which is likely to extend resistance at 0.7245 level along with support at 0.7200. A bearish breakout of 0.7200 level can open further room for buying until 0.7122 level. The MACD is also in support of selling; therefore, we should look for selling trades below the 0.7245 level today. Goold luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, November 12 – Top Trade Setups In Forex – Spotlight on ECB, BOE & FED! 

On the news side, the eyes will remain on the U.K. Prelim GDP q/q, which is expected to have improved from -19.8% to 15.8% previous month, and it may support the Sterling today. Later in the day, the speeches from the ECB President Lagarde, BOE Gov Bailey, and Fed Chair Powell will remain under the spotlight. All three officials are due to participate in a panel discussion about monetary policy at the ECB Forum on Central Banking via satellite. Lastly, the U.S. CPI figures can also trigger some price action during the U.S. session today; let’s keep an eye on it. 

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD closed at 1.17786 after placing a high of 1.18325 and a low of 1.17453. The Euro dropped on Wednesday against the U.S. dollar as the European Central Bank (ECB) policymakers continued signaling further easing, though they downplayed the prospect of further interest rate cuts.

At the ECB forum on central banking in Frankfurt, the ECB President Christine Lagarde said that the coronavirus crisis had produced a highly unusual recession, and recovery is likely to be uneven. She also warned against excessive optimism over the short-term impact on the economy from a vaccine.

Lagarde continued that as the latest news on vaccine looked encouraging, the chances were still there. The economy could face frequent cycles of accelerating viral spread and tightening restrictions until widespread immunity was achieved. On Monday, the U.S. drugmaker Pfizer said that its vaccine’s last stage trials had shown a high level of success in preventing reinfection. Lagarde signaled that the central bank would almost certainly loose monetary policy in the next meeting as the Eurozone economy risks falling back towards recession. She told lawmakers that ECB was ready to take further easing actions. These comments from ECB President weighed on the single currency Euro and dragged the pair EUR/USD on the downside on Wednesday.

Lagarde said that the ECB would keep its interest rates at 0.0%, and it has an asset purchase program in place worth 1.35 trillion euros. She said that bond-buying and pumping extra cash into the financial system were the best ways for the central bank to support the economy.

According to Lagarde, while all the other options were on the table, the PEPP and TLTRO’s have proven their effectiveness in the current environment. Therefore, they will likely remain the main tools for adjusting monetary policy.

According to the latest forecast, the Eurozone GDP in the fourth quarter is likely to decline by roughly 2% as the renewed lockdowns have affected the economic activities. All these updates kept the single currency Euro under pressure and, ultimately, the EUR/USD pair on the downside.

On the U.S. front, the U.S. dollar was high onboard due to the rising hopes of a quick economic rebound and less need for stimulus measures from the FED after the latest optimism from the vaccine front. 

The U.S. Dollar Index rose by about 0.3% on Wednesday and supported the U.S. dollar’s upward trend that ultimately added pressure on the EUR/USD pair. Meanwhile, there was a Bank Holiday in the U.S. and France that kept the macroeconomic data out of the table and left the EUR/USD pair on the mercy of market mood and Lagarde’s speech.

Daily Technical Levels

Support   Resistance

1.1738      1.1827

1.1697      1.1875

1.1648      1.1917

Pivot point: 1.1786

EUR/USD– Trading Tip

The EUR/USD is trading with a bearish bias at the 1.1780 level, having violated the double bottom support level at 1.1800. The same support level was also extended by an upward trendline pattern on the hourly timeframe. At the moment, the EUR/USD has formed a downward channel, which extends resistance at the 1.17800 level. On the lower side, the support holds around 1.1743 level. The MACD and EMA are also turning bearish; therefore, we may see selling below the 1.17800 mark today.


GBP/USD – Daily Analysis

The GBP/USD closed at 1.32237 after placing a high of 1.33133 and a low of 1.31912. The GBP/USD pair dropped on Wednesday after placing gains for four consecutive days on the back of rising concerns over the Brexit deal and the broad-based U.S. dollar strength.

On the Brexit front, the U.K. and E.U. are still far apart on fisheries and the flow of goods between Ireland and Northern Ireland. However, hopes were still high that talks between both sides were moving positively as there had been no public finger-pointing by both parties in the preceding few weeks. Despite this, it cannot be said that a deal will surely reach as when it comes to Brexit, there is nothing sure.

Another unofficial deadline for reaching a deal has been set by both sides: the European Summit on November 19. If a settlement is not reached by then, the chances are high that the U.K. will leave the E.U. on December 31 without a trade deal and will bound to follow WTO rules. As the new deadline was reaching closer, these latest concerns raised the fears of no-deal Brexit and weighed on the British Pound that ultimately dragged GBP/USD pair on the downside.

Furthermore, on the U.S. front, the greenback was strong across the board as the Fed’s need for further stimulus dropped after releasing the latest vaccine news. The U.S. Dollar Index rose by about 0.3% and weighed on GBP/USD pair. Moreover, traders’ eyes will be upon the release of the third quarter GDP from Great Britain. Investors believe that the economy will post a strong rebound in Q3 as the coronavirus pandemic caused a sharp decline in GDP in Q2 when it fell by 19.8%. The third-quarter GDP is expected to stand at 15.3%, and any figure within the expectations will prove bullish for GBP. U.K. will also release monthly GDP for September that is projected to decline by 1.5% down from August’s 2.1%.

Meanwhile, the GBP/USD pair’s losses remained limited as the risk sentiment in the market continued supporting the risk perceived GBP. The risk sentiment was supported by the latest optimism about the vaccine development from Pfizer and BioNtech on Monday. However, the British Pound was also under pressure due to the victory of Joe Biden in the U.S. election last week. Biden has said that he will not make a trade deal with the U.K. after its transition period ends if it failed to reach a deal with the E.U. Now the pressure has been increased in the U.K. for securing a trade deal with the E.U., which has also exerted pressure on local currency British Pound that has been weighing on GBP/USD pair since Biden’s victory.

Daily Technical Levels

Support   Resistance

1.2997      1.3222

1.2851      1.3301

1.2771      1.3448

Pivot point: 1.3076

GBP/USD– Trading Tip

On Thursday, the GBP/USD is consolidating with a neutral bias at 1.3210 level ahead of the UK GDP figures later today. The GBP/USD is holding over the resistance becomes a support level of 1.3159. At the moment, the Cable may find immediate support at the 1.3208 level, and below this, Sterling can dip until the 1.3140 level. As you can see on the hourly timeframe, the Cable is stuck in a very narrow range, and there is likely to be an excellent trade opportunity in the market upon breakout. Let’s consider selling below the 1.3190 level and buying above the same area today. 


USD/JPY – Daily Analysis

During Thursday’s Asian trading session, the USD/JPY currency pair failed to extend its early-day recovery streak and edged lower around below the 105.30 level. Selling bias could be associated with the risk-off market sentiment, which underpins the safe-haven Japanese yen and contributes to the currency pair losses. Therefore, the market trading sentiment was being pressured by the increasing market concerns about the possible economic fallout from the second wave of continuous. 

Across the pond, the broad-based U.S. dollar selling bias, triggered by the optimism over a potential vaccine for the highly infectious coronavirus pandemic, could also be considered as one of the key factors that dragged the currency pair lower. In the meantime, the U.S. dollar losses were further bolstered by the renewed hopes for substantial U.S. fiscal stimulus measures. On the contrary, the optimism over a potential vaccine and the progress surrounding the Brexit talks keep challenging market risk-off mood and become the key factor that helps the currency pair limit its deeper losses. On the flip side, the currency pair mostly ignores the second-tier data from Japan. At this particular time, the USD/JPY currency pair is currently trading at 105.31 and trading in the range between 105.22 – 105.47.

The market trading sentiment failed to extend its previous day’s positive performance. It started to flash red on the day as the resurgence of (COVID-19) cases still not dispensing any sign of slowing down in the U.S. and Europe, which keep fueling the worries over the global economic recovery. As per the latest report, the U.S. keeps reporting record cases daily, more than 100K per day. Even all U.S. states representing a worse status report of the COVID-19, which was backed by the record hospitalizations and daily cases. As in result, New York has declared a 10 p.m. curfew on bars, gyms, and restaurants to curb the virus spread. It is also worth mentioning that the COVID-19 hospitalizations in the U.S. exceeded 60,000. 

In addition to the U.S., Europe also imposed lockdown again last week, threatening to weaken the economic recovery. As per the latest report, Sweden declared a partial lockdown is shutting down bars and restaurants for the 1st-time since the virus started. Thus, the back to back lockdowns restrictions will have an instant negative effect on global economic recovery.

Moreover, the market risk-off sentiment was further bolstered by the reports suggesting that the Dragon Nation takes one more trade-negative measure for Aussie. As per the latest report, the Dragon Nation extended its anti-Aussie bias while suspending the Victorian timber logs. The dragon nation has already lifted bars for Australian wine, iron ore, and barley after the Pacific inquiry alleging the Asian leader’s negligence caused the coronavirus (COVID-19) outbreak. Apart from this, the bearish market sentiment could also be associated with the long-lasting US-China tussle, which continuously picks the pace. As per the latest report, the U.S. National Security Adviser Robert Charles O’Brien recently threatened the Dragon Nation over its responsibility to trigger Hong Kong freedom violations.

Daily Technical Levels

Support   Resistance

103.82      106.29

102.27     107.21

101.35     108.75

Pivot point: 104.74

USD/JPY – Trading Tips

The USD/JPY is trading sideways, maintaining a narrow range of 105.63 – 104.835 ever since it has violated the descending trendline at 104.950 area. The USD/JPY pair is trading choppy as investors seem to brace for the U.S. inflation figures later today. The USD/JPY pair needs to violate the 104.900 level to continue trading bearish, and below this, we may see the USD/JPY pair falling until the 104.220 level, and a further breakout can lead it towards 102.400. However, we may see buying over 104.950 levels today until 105.600. Good luck! 

Categories
Forex Signals

USD/CAD Heading North – Is It a Good time to go long?

Today in the early Asian trading session, the USD/CAD currency pair successfully extended its previous day recovery streak and remained bullish around above the mid-1.3000 level. However, the bullish sentiment around the currency pair could be attributed to the modest downticks in the crude oil prices, which ultimately undermined the demand for the commodity-linked currency the loonie, and contributed to the currency pair gains. On the contrary, the broad-based U.S. dollar weakness, triggered by the multiple factors, has become one of the major factors that kept the lid on any further gains in the currency pair. Currently, the USD/CAD currency pair is currently trading at 1.3067 and consolidating in the range between 1.3054 – 1.3073.

Despite the renewed optimism about a potential treatment/vaccine for the highly infectious virus, the market trading sentiment has ben flashing mixed signals as the coronavirus woes overshadowed vaccine hopes. However, the increasing market worries over the potential economic fallout from the constant rise in new COVID-19 cases keep weighing on the market trading sentiment. As per the latest report, the country keeps reporting record cases daily, more than 100K per day. Essentially all American states are getting a worse status report of the COVID-19, strengthened by record hospitalizations and daily cases rising past-100,000 in the last few days. As in result, New York has declared a 10 p.m. curfew on bars, gyms, and restaurants to curb the spread. It is also worth mentioning that the COVID-19 hospitalizations in the U.S. exceeded 60,000.

On the bullish side of the story, the prevalent optimism over the potential vaccine for the highly infectious coronavirus disease helps the market trading sentiment limit its deeper losses. The leading vaccine producers like Pfizer and Moderna still show progress over the vaccine for the deadly virus. This was witnessed after the U.S. infectious disease expert Dr. Anthony Fauci said that Moderna could begin analyzing vaccine data within days. However, the market trading mood mostly ignored the U.S. official’s another push to keep vaccine optimism high amid surging virus cases and hospitalizations in the U.S.

Despite the risk-off market sentiment, the broad-based U.S. dollar failed to extend its overnight gains. It edged lower on the day, mainly due to the heavy optimism over the potential vaccine for the highly infectious coronavirus disease. Apart from this, coronavirus’s resurgence keeps fueling the fears that the U.S. economic recovery could be halt, which also keeps the greenback under pressure. However, the U.S. dollar losses could be considered the major factor that pushes the currency pair down. Meanwhile, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies dropped to 92.922.

At the crude oil front, the WTI crude oil prices failed to extend its overnight winning streak and remained under some selling pressure on the day. However, the fresh declines in crude oil could be attributed to reports suggesting the next wave of lockdowns throughout the world, which is threatening the crude oil demand once again. Apart from this, the reason for the modest losses in crude oil prices could also be associated with the latest reports suggesting that OPEC’s oil output in October rose by 320,000 BPD in the wake of recovery in Libya’s production. Thus, the pullback in oil prices undermined demand for the commodity-linked currency – the loonie and remained supportive of the USD/CAD pair’s ongoing recovery momentum.

Moving ahead, the market traders will keep their eyes on the U.S. economic calendar, which highlights the latest data concerning U.S. inflation and jobless claims. In the meantime, the Brexit trade talks’ updates could not lose their importance on the day.


Daily Support and Resistance
S1 1.2951
S2 1.3003
S3 1.3032
Pivot Point 1.3055
R1 1.3084
R2 1.3107
R3 1.3158

The USD/CAD is trading with bullish sentiment at 1.3094, facing immediate resistance at 1.3100. Crossing above this level may drive further upward movement until 1.3177 level. On the downside, the USD/CAD may find support at 1.3025, and below this, the next support level stays at 1.2975 level. The MACD is in support of buying; thus, we may look for a buying trade over the 1.3105 level today. Good luck!

Categories
Forex Signals

EUR/JPY Violates Symmetric Triangle Pattern


Entry Price – Buy 124.623
Stop Loss – 124.223
Take Profit – 125.023
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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Categories
Forex Market Analysis

Daily F.X. Analysis, November 11 – Top Trade Setups In Forex – Bank Holidays! 

On the news front, the economic calendar is mostly empty on the back of the Bank holiday in Europe and the United States. French banks will be closed in observance of Armistice Day, while Canadian banks will be closed in observance of Remembrance Day. The U.S. banks will also remain closed amid the Veterans Day holiday in the bank. We may experience thin trading volume and volatility in the market. 

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18133 after placing a high of 1.19198 and a low of 1.17951. The EUR/USD pair rose to its highest since September 02 on Monday but failed to keep its gains and fell to post losses for the day as the U.S. dollar rallied in the American session as risk appetite took over. Pfizer and BioNtech announced that their coronavirus vaccine was more than 90% effective in preventing the coronavirus. The news about the vaccine optimism raised the risk sentiment further and pushed the pair to its highest in 9 weeks in earlier sessions on Monday.

Pfizer and BioNtech said they would seek the approval authorization for emergency-use from the U.S. later this month. The market’s optimism raised and supported the EUR/USD pair’s an upward movement in earlier trading hours.

A vaccine will likely mean the end of lockdowns and restrictions and hence, a sharp economic comeback. However, it will take up to the second half of next year for the vaccine or vaccines to reach enough people to grant a more regular return to activities. Nevertheless, optimism will prevail. However, the EUR/USD pair failed to keep its gains for the day and started declining on Monday on the back of Joe Biden’s victory in the U.S. presidential election. The political gridlock in the U.S. Senate could stall the prospect of any fresh package of U.S. fiscal stimulus package that failed to keep the U.S. dollar under pressure and weighed on the EUR/USD pair.

The European Central Bank (ECB) President Christine Lagarde refrained from touching upon monetary policy in her scheduled speech at the Green Horizon Summit on Monday. She only talked about climate risks and said that the economic challenges of climate transition were phenomenal. The main driver of the EUR/USD pair remained the strength of the U.S. dollar triggered by the faded hopes of additional stimulus measures as the vaccine news raised optimism about the economic recovery.

European banks will be closed in observance of Armistice Day; therefore, thin trading volume and volatility can be expected today. 

Daily Technical Levels

Support   Resistance

1.1766      1.1891

1.1717      1.1969

1.1640      1.2017

Pivot point: 1.1843

EUR/USD– Trading Tip

On Wednesday, the EUR/USD is trading bullish at the 1.1833 level amid a stronger U.S. dollar. The pair may now head higher until an immediate resistance level of 1.1883. On the 4 hour timeframe, the EUR/USD has formed an upward channel supporting the pair at the 1.18016 level. On the higher side, a bullish crossover of 1.1883 level can extend the buying trend until the 1.1945 area. The MACD entered the oversold zone and now suggesting odds of bullish trend continuation; therefore, we should look for a buying trade over the 1.1801 level.  


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.31634 after a high of 1.32081 and a low of 1.31183. Despite higher market sentiment and weaker safe-haven demand on Monday, the British Pound to U.S. dollar exchange rate has been under pressure. The Sterling remained weak despite the increased market sentiment from the news of coronavirus vaccine efficiency. Pfizer and the BioNtech announced that their vaccine had been proved more than 90% efficient in preventing the coronavirus on Monday. Both companies also said they would be taking approval from the U.S. for the vaccine’s emergency-use later this month. After this news, risk appetite increased in the market, and global equities raised; however, the risk perceived GBP/USD pair remained under pressure as British Pound was weak due to Biden victory in the U.S. elections.

Joe Biden’s victory decreased the hopes for the U.K. & U.S. post-Brexit trade deal as Joe Biden has already said that if U.K. fails to reach a deal with the E.U., then the US-UK deal will also be jeopardized. As there was no news regarding the progress made in the U.K. & E.U. talks, the British Pound came under fresh pressure after Joe Biden became the U.S.

The governor of the Bank of England, Andrew Bailey, explained that what the BoE was doing to ensure the financial system plays its part in tackling climate change. He warned that climate change was a bigger risk than coronavirus. Furthermore, the chief economist from the Bank of England, Andy Haldane, said that a breakthrough in developing a coronavirus vaccine could deliver a vital boost of confidence to consumers and businesses. He added that the economy might have reached a decisive moment after the pharmaceutical company Pfizer announced that its coronavirus vaccine candidate was 90% effective.

He also said that the vaccine could be a game-changer for the economy. He cautioned that it would take several months for the vaccine to be rolled out but would have an immediate effect on consumer and business confidence. He added that the economic cycle would start again as it would unlock the business investments, and the economy will start recovering. The GBP/USD pair remained a little bullish due to high pressure on British Pound on Tuesday.

Daily Technical Levels

Support   Resistance

1.2997      1.3222

1.2851      1.3301

1.2771      1.3448

Pivot point: 1.3076

GBP/USD– Trading Tip

The GBP/USD is trading with a strong bullish bias due to a stronger Sterling 1.3191 area. The pair has violated the intraday resistance level at 1.3159, which is now working as a support for Sterling. On the higher side, the continuation of an upward trend can lead to the GBP/USD pair until the 1.3226 area. The cable had violated the descending triangle pattern, and ever since, it’s trading with a bullish bias. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.388 after placing a high of 105.645 and a low of 103.187. The USD/JPY pair surged past the 105.6 level on Monday after the risk-on market sentiment raised and weighed on the Japanese Yen. The safe-haven Japanese Yen came under fresh pressure after the Pfizer and its German partner BioNtech announced that their vaccine candidate was proved more than 90% efficient in its last-stage trials. Both companies announced that they would seek U.S. approval for the emergency-use of vaccine later this month.

The pair USD/JPY witnessed a sharp rise in its prices of almost 3-4% on Monday after the vaccine optimism raised the risk appetite in the market that weighed heavily on the safe-haven Japanese Yen. This ultimately pushed the USD/JPY pair to the highest level since October 20.

The gains in USD/JPY pair were also supported by the victory of Democratic Joe Biden in U.S. elections. Biden was expected to deliver a massive stimulus package that had been weighing on the U.S. dollar. Still, after the news of vaccine development and its efficiency, the need for the massive stimulus package dropped and raised the U.S. dollar onboard. 

The Bank of Japan released the Summary of opinions that stated that one member said that the bank needs to ensure its purchases of exchange-traded funds are sustainable. Other members said that BOJ must be ready to ramp up stimulus to cushion the economic blow from the coronavirus pandemic. The Cleveland Federal Reserve Bank President Loretta Mester said that the emergency lending programs the Fed set up during the coronavirus pandemic had reduced distress in financial markets. She also said that there was still a need for lending programs. 

Mester also noted that Fed Chair Jerome Powell would be working with the Treasury Department to determine if the programs should be extended beyond the end of the year. She also stated that the Fed was not out of ammunition to stimulate the economy. The Fed could provide more accommodation by adjusting its asset purchase program and using other tools. She said that the economy recovered more strongly than expected, but gains have not been evenly spread. Mester said that economic growth would be more slowly despite the optimistic news about the vaccine. These comments kept the markets under pressure and capped further gains in the USD/JPY pair.

Daily Technical Levels

Support   Resistance

103.82      106.29

102.27      107.21

101.35      108.75

Pivot point: 104.74

USD/JPY – Trading Tips

The USD/JPY has violated the descending trendline at 104.950 area, and on the lower side, it’s testing the support area of 104.840 level. The USD/JPY pair has recently entered the overbought zone, and now investors may experience a bearish correction in the market. The USD/JPY pair needs to violate the 104.900 level. Below this, we may see the USD/JPY pair falling until the 104.220 level, and a further breakout can lead it towards 102.400, which seems a bit hard. However, we may see buying over 104.950 levels today until 105.600. Good luck! 

Categories
Forex Signals

Choppy Session in USD/CAD Continues – Traders Braces for a Breakout Setup!

During Wednesday’s early Asian trading session, the USD/CAD currency pair failed to stop its overnight losses and remain depressed around the 1.3030 level, mainly due to the broad-based U.S. dollar weakness. The prevalent downtrend in the U.S. dollar was mainly tied to the confidence over a potential vaccine for the extremely contagious coronavirus disease, which struggling to keep market trading sentiment positive. Moreover, President-elect Joe Biden faces difficulties from Donald Trump, which also weighs on the already weaker U.S. dollar. The reason for the declines in the currency pair could also be attributed to the fresh upward movement in the crude oil prices, which tend to underpin the commodity-linked currency the Loonie and contributes to the currency pair’s losses. However, the crude oil prices were being supported by fresh released upbeat American Petroleum Institute (API) data. As of writing, the USD/CAD currency pair is currently trading at 1.3028 and consolidating in the range between 1.3024 – 1.3037.

As we already mentioned, the market trading sentiment represented negative performance on the day as the sluggish appearance of Asia-Pacific stocks and declines of the U.S. 10-year Treasury yields tend to highlight the risk-off mood. However, the reason behind the risk-off market bias could be attributed to a combination of factors. Be it the worrisome headlines concerning the Sino-US tussle or the resurgence of the coronavirus. The market trading sentiment has been flashing red since the day started, which ultimately keeps the safe-haven assets supportive on the day. 

At the US-China front, the tensions between the United States and China still do not show any sign of slowing down as the U.S. imposed fresh sanctions on 4-Chinese diplomats over the Hong Kong Security Bill crackdown initially overshadowed the optimism over a potential vaccine and weighed on the market sentiment. Elsewhere, the declines in the equity market were further bolstered after U.S. President Donald Trump’s push to block election results to confuse optimists. 

Despite the risk-off mood, the broad-based U.S. dollar remained depressed. The investors continue to sell U.S. dollars on the back of optimism over a potential vaccine for the highly contagious coronavirus disease. Moreover, the losses in the U.S. dollar could also be associated with political uncertainty in the U.S. Thus, the losses in the U.S. dollar kept the currency pair lower. Meantime, the U.S. Dollar Index, which tracks the greenback against a bucket of other currencies, was down at 92.707.

At the crude oil front, WTI crude oil prices remained well bid around above $41 on the day, backed by the COVID vaccine hopes and the victory of Joe Biden, which boosted the market trading sentiment and demand sentiment the crude oil. Apart from this, China has played a significant role in underpinning global oil demand recovery. They showed that the inventories had declined considerably in recent weeks, indicating the domestic economic recovery. Moreover, the crude oil prices upticks were further boosted after the American Petroleum Institute (API) reported the major draw in crude oil inventories of 5.147 million barrels for the week ending November 6. Thus, the crude oil prices’ upticks underpinned the commodity-linked currency the Loonie and exerted some downside pressure on the currency pair. 


Daily Support and Resistance

S1 1.289

S2 1.2957

S3 1.2995

Pivot Point 1.3023

R1 1.3061

R2 1.3089

R3 1.3156

The USD/CAD pair is consolidating around the 1.3020 area, testing the resistance level of the 1.3033 mark. On the higher side, the bullish breakout of the 1.3033 level can stretch the buying trend until the next resistance level of 1.3098. While on the lower side, the immediate support stays at 1.3000, and below this, the next support is likely to be found around 1.2935 level. Overall, the USD/CAD isn’t moving a lot as traders are enjoying bank holidays in Canada and the U.S. amid Remembrance and Veterans Day. We may have a thin trading volume and volatility in the market today. Good luck!

Categories
Forex Signals

AUD/USD Stops Previous Day Losing Streak Amid Downbeat China CPI, PPI

The AUD/USD failed to extend its overnight bullish bias and remains on the backfoot after returning from the 8-week high the previous day. However, the reason could be traced to China’s weaker than expected inflation data for October, which initially undermined the Australian dollar and contributed to the currency pair losses. Besides this, the reason for the bearish sentiment around the currency pair could also be associated with the U.K. government’s defeat to convince the House of Lords over the necessity to have the rights to edit the Brexit deal by the Tory members. 

On the contrary, the hopes of the latest optimism over a potential vaccine for the highly infectious coronavirus disease having earlier boosted the market trading sentiment, which could be regarded as one of the key determinants that help the currency pair to limit its deeper losses. Besides this, the losses in the currency pair were also capped by the fresh optimism of the Australian Prime Minister (PM) Scott Morrison over the Australian economy. Meanwhile, the broad-based U.S. dollar weakness, buoyed by the market mixed mood, could also be considered as a major factor that might cap the further downside momentum for the currency pair.

As we already mentioned that the reason for the currency pair bearish bias could be traced to China’s weaker than expected inflation data for October, which initially undermined the Australian dollar and contributed to the currency pair losses. At the data front, China’s headline CPI decreased below 0.8% against forecast to 0.5% YoY, marking the first below 1.0% print since March 2017, whereas PPI reprints -2.1% figures while defying -2.0% market consensus.

Despite the optimism over a potential treatment/vaccine for the highly infectious virus, the market risk sentiment failed to extend its previous day positive performance and remains depressive during the early Asian session on the day amid a combination of factors. Be it the worrisome headlines concerning Brexit or the tension between the US-China, not to forget the coronavirus issues in the U.S., the market trading sentiment has been flashing red since the Asian session started, which ultimately keeps the perceived riskier Australian dollar under pressure. As per the latest report, the U.S. sanctions four Chinese diplomats over the Hong Kong crackdown. 

Meanwhile, the reason for the losses in the equity market could also be associated with the U.S. dislikes concerning the European tariffs on goods worth $4 billion, as earlier expressed by the U.S. Trade Representative (USTR) Robert Lighthizer. Furthermore, the British House of Lords rejected the Tory government’s proposal to override the Brexit treaty, which also weighed on the market trading sentiment and contributed to the currency pair losses. 

Across the pond, the prevalent worries over the resurgence of the coronavirus pandemic remain on the card as they could ruin the global economic recovery, which keeps the market trading sentiment under pressure and weakened the perceived riskier Australian dollar. The coronavirus COVID-19 cases continue to climb in Europe, U.K., and the U.S. As per the latest report, the coronavirus (COVID-19) cases crossed over 10 million figures in the U.S. as well as 30 million marks from Europe.

Despite the mixed market sentiment, the broad-based U.S. dollar failed to extend its overnight gains and edged lower on the day mostly due to the heavy optimism over the potential vaccine for the highly infectious coronavirus disease. 

On the bullish side, the pharmaceutical giant Pfizer announced Monday that early analysis of its coronavirus vaccine trial suggested the vaccine was robustly effective in preventing COVID-19, which earlier boosted the market trading sentiment and was seen as one of the key factors that capped further downside momentum for the currency pair. However, the coronavirus vaccine hopes got an additional boost after the U.S. Health Official Dr Anthony Fauci said that the vaccine is around the corner while terming Moderna’s vaccine similar to Pfizer’s during an interview with CNN.

At home, Australian Prime Minister (PM) Scott Morrison recently said that the confidence in the economy is recovering, as the country is re-opening from its coronavirus imposed the second lockdown, which ultimately helped the currency pair to limits its deeper losses. In the meantime, the October month data from National Australia Bank (NAB) recorded better than previous predictions but were mostly ignored.

The traders will keep their eyes on U.S. economic calendars, which will highlight the release of the NFIB Small Business Index along with JOLTS Job Openings. Apart from this, the traders will also closely watch the FOMC Member Kaplan and FOMC Member Quarles speeches. In the meantime, the updates surrounding the Brexit trade talks could not lose their importance on the day.


The AUDUSD is consolidating with bullish sentiment at the 0.7283 area, having crossed over an immediate resistance level of 0.7247 level. For the moment, this AUD/USD is working as a support for the AUD/USD pair. On the higher side, resistance stays at 0.7341 and 0.7411 level today. Bullish bias seems strong; let’s consider taking bullish trades today, especially 0.7220. Good luck! 

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Forex Market Analysis

Daily F.X. Analysis, November 10 – Top Trade Setups In Forex – Risk on Market Sentiment! 

On the news front, the eyes will remain on the European German ZEW Economic Sentiment data and the Industrial Production figures from France and Italy. All of the figures are expected to have dropped, which may put bearish pressure on the single currency Euro. Besides this, the eyes will stay on the labor market figures from the United Kindom. 

Economic Events to Watch Today  

 


 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18133 after placing a high of 1.19198 and a low of 1.17951. The EUR/USD pair rose to its highest since September 02 on Monday but failed to keep its gains and fell to post losses for the day as the U.S. dollar rallied in the American session as risk appetite took over.

Pfizer and BioNtech announced that their coronavirus vaccine was more than 90% effective in preventing the coronavirus. The news about the vaccine optimism raised the risk sentiment further and pushed the pair to its highest in 9 weeks in earlier sessions on Monday.

Pfizer and BioNtech said they would seek the approval authorization for emergency-use from the U.S. later this month. The optimism around the market raised and supported the EUR/USD pair’s upward movement in earlier trading hours.

A vaccine will likely mean the end of lockdowns and restrictions and hence, a sharp economic comeback. However, it will take up to the second half of next year for the vaccine or vaccines to reach enough people to grant a more normal return to activities. Nevertheless, optimism will prevail.

However, the EUR/USD pair failed to keep its gains for the day and started declining on Monday on the back of Joe Biden’s victory in the U.S. presidential election. The political gridlock in the U.S. Senate could stall the prospect of any fresh package of U.S. fiscal stimulus package that failed to keep the U.S. dollar under pressure and weighed on the EUR/USD pair.

On the data front, at 12:00 GMT, the German Trade Balance for September raised to 17.8B against the expected 17.2B and supported Euro that pushed the EUR/USD pair higher on Monday. AT 14:30 GMT, the Sentix Investor Confidence for October came in as -10.0 against the forecasted -15.0 and supported Euro.

Moreover, the European Central Bank (ECB) President Christine Lagarde refrained from touching upon monetary policy in her scheduled speech at the Green Horizon Summit on Monday. She only talked about climate risks and said that the economic challenges of climate transition were phenomenal. The main driver of the EUR/USD pair remained the strength of the U.S. dollar triggered by the faded hopes of additional stimulus measures as the vaccine news raised optimism about the economic recovery.

Daily Technical Levels

Support   Resistance

1.1766      1.1891

1.1717      1.1969

1.1640      1.2017

Pivot point: 1.1843

EUR/USD– Trading Tip

The EUR/USD is trading bullish at the 1.1833 level amid a stronger U.S. dollar. The pair may now head higher until an immediate resistance level of 1.1883. On the 4 hour timeframe, the EUR/USD has formed an upward channel supporting the pair at the 1.18016 level. On the higher side, a bullish crossover of 1.1883 level can extend the buying trend until the 1.1945 area. The MACD entered the oversold zone and now suggesting odds of bullish trend continuation; therefore, we should look for a buying trade over the 1.1801 level.  


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.31634 after a high of 1.32081 and a low of 1.31183. Despite higher market sentiment and weaker safe-haven demand on Monday, the British Pound to U.S. dollar exchange rate has been under pressure. The Sterling remained weak despite the increased market sentiment from the news of coronavirus vaccine efficiency.

Pfizer and the BioNtech announced that their vaccine had been proved more than 90% efficient in preventing the coronavirus on Monday. Both companies also said they would be taking approval from the U.S. for the vaccine’s emergency-use later this month. After this news, risk appetite increased in the market, and global equities raised; however, the risk perceived GBP/USD pair remained under pressure on Monday as British Pound was weak due to Biden victory in the U.S. elections.

Joe Biden’s victory decreased the hopes for the U.K. & U.S. post-Brexit trade deal as Joe Biden has already said that if U.K. fails to reach a deal with the E.U., then the US-UK deal will also be jeopardized. As there was no news regarding the progress made in the U.K. & E.U. talks, the British Pound came under fresh pressure after Joe Biden became the U.S.

Meanwhile, on Monday, the governor of Bank of England, Andrew Bailey, explained that what the BoE was doing to ensure the financial system plays its part in tackling climate change. He warned that climate change was a bigger risk than coronavirus. Furthermore, the chief economist from the Bank of England, Andy Haldane, said that a breakthrough in developing a coronavirus vaccine could deliver a vital boost of confidence to consumers and businesses. He added that the economy might have reached a decisive moment after the pharmaceutical company Pfizer announced that its coronavirus vaccine candidate was 90% effective.

He also said that the vaccine could be a game-changer for the economy. He cautioned that it would take several months for the vaccine to be rolled out but would have an immediate effect on consumer and business confidence. He added that the economic cycle would start again as it would unlock the business investments, and the economy will start recovering. The GBP/USD pair remained a little bullish due to high pressure on British Pound on Monday.

Daily Technical Levels

Support   Resistance

1.2997      1.3222

1.2851      1.3301

1.2771      1.3448

Pivot point: 1.3076

GBP/USD– Trading Tip

The GBP/USD is trading with a strong bullish bias due to a stronger Sterling 1.3191 area. The pair has violated the intraday resistance level at 1.3159, which is now working as a support for Sterling. On the higher side, the continuation of an upward trend can lead to the GBP/USD pair until the 1.3226 area. The cable had violated the descending triangle pattern, and ever since, it’s trading with a bullish bias. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.388 after placing a high of 105.645 and a low of 103.187. The USD/JPY pair surged past the 105.6 level on Monday after the risk-on market sentiment raised and weighed on the Japanese Yen. The safe-haven Japanese Yen came under fresh pressure after the Pfizer and its German partner BioNtech announced that their vaccine candidate was proved more than 90% efficient in its last-stage trials. Both companies announced that they would seek U.S. approval for the emergency-use of vaccine later this month.

The pair USD/JPY witnessed a sharp rise in its prices of almost 3-4% on Monday after the vaccine optimism raised the risk appetite in the market that weighed heavily on the safe-haven Japanese Yen. This ultimately pushed the USD/JPY pair to the highest level since October 20.

The gains in USD/JPY pair were also supported by the victory of Democratic Joe Biden in U.S. elections. Biden was expected to deliver a massive stimulus package that had been weighing on the U.S. dollar. Still, after the news of vaccine development and its efficiency, the need for the massive stimulus package dropped and raised the U.S. dollar onboard. The rising U.S. dollar also helped the USD/JPY pair to post massive gains on Monday.

Meanwhile, on Monday, the Bank of Japan released the Summary of opinions that stated that one member said that the bank needs to ensure its purchases of exchange-traded funds are sustainable. Other members said that BOJ must be ready to ramp up stimulus to cushion the economic blow from the coronavirus pandemic.

On Monday, the Cleveland Federal Reserve Bank President Loretta Mester said that the emergency lending programs the Fed set up during the coronavirus pandemic had reduced distress in financial markets. She also said that there was still a need for lending programs. Mester also said that Fed Chair Jerome Powell would be working with the Treasury Department to determine if the programs should be extended beyond the end of the year. She also stated that the Fed was not out of ammunition to stimulate the economy and that the Fed could provide more accommodation by adjusting its asset purchase program and using other tools.

She said that the economy recovered more strongly than expected, but gains have not been evenly spread. Mester said that economic growth would be more slowly despite the optimistic news about the vaccine on Monday. These comments kept the markets under pressure and capped further gains in the USD/JPY pair.

Daily Technical Levels

Support   Resistance

103.82      106.29

102.27      107.21

101.35      108.75

Pivot point: 104.74

USD/JPY – Trading Tips

The USD/JPY has violated the descending trendline at 104.950 area, and on the lower side, it’s testing the support area of 104.840 level. The USD/JPY pair has recently entered the overbought zone, and now investors may experience a bearish correction in the market. To see a bearish retracement, the USD/JPY pair needs to violate the 104.900 level. Below this, we may see the USD/JPY pair falling until the 104.220 level, and a further breakout can lead it towards 102.400, which seems a bit hard. However, we may see buying over 104.950 levels today until 105.600. Good luck! 

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Forex Signals

AUD/USD Succeeded to Stop Its Overnight Losses – Combination Of Factors in Play! 

During Monday’s early Asian trading session, the AUD/USD currency pair succeeded to stop its overnight losing streak and caught some sharp bids around above mid-0.7200 level mainly due to the risk-on market sentiment, which tend to support the observed risk currency Australian dollar and offers to the currency pair gains. Therefore, Democratic candidate Joe Biden’s victory in the U.S. presidential elections was supported by the market trading bias. Aside from this, the market trading sentiment was further supported by Brexit’s confidence, which boosted the currency pair. Across the pond, the broad-based U.S. dollar selling bias, triggered by the marker risk-on sentiment, also played its major role in supporting the currency pair. 

Moreover, the U.S. dollar losses were further bolstered by the intensifying doubts over the U.S. economic recovery as U.S. total coronavirus cases surpass 10 million. On the contrary, the long-lasting coronavirus woes in the U.S. and Europe and Trump’s challenges to the election results keep challenging the upbeat market sentiment, which becomes the key factor that kept the lid on any additional gains in the currency pair. The AUD/USD is trading at 0.7269 and consolidating in the range between 0.7268 – 0.7290.

Despite the doubts over the global economic recovery from intensifying coronavirus (COVID-19) woes in the U.S. and Europe, the market trading sentiment ticked up to the 4-week high at the start of the week’s trading and remained supportive by the Democratic candidate Joe Biden’s victory in the U.S. presidential elections. Despite many lawsuits filed by the Trump administration against the result of the presidential election, the market traders still believe that the Republican member will not keep the White House leadership. Although, the optimism surrounding the Bidden victory was further bolstered after the JPMorgan Chief Executive Jamie Dimon said that “We must respect the results of the U.S. presidential election and, as we have with every election, honor the decision of the voters and support a peaceful transition of power.” However, this helped the market’s risk sentiment and undermined the U.S. dollar’s safe-haven demand.

Across the ocean, bullish sentiment around the equity market was further bolstered by the optimism concerning Brexit, which was recently triggered after the European Union’s (E.U.) Brexit negotiator Michel Barnier recently said that he is pleased to be back in London for Brexit talks.

On the contrary, the intensifying coronavirus woes in the U.S. and Europe and intensifying lockdowns restrictions in Europe keep challenging the upbeat market sentiment and become the key factor that kept the lid on any additional gains in the currency pair. As per the latest report, the coronavirus cases (COVID-19) have exceeded 50 million globally over the weekend. At the same time, the number of infections in Europe was registered approximately 300K in one day. At the U.S. front, the U.S. reported a record rise in coronavirus cases for a 4th-consecutive day with at least 131,420 new infections, bringing the country’s total count to around 9.91 million. Simultaneously, the number of deaths in the U.S. was more than 1,000 for a 5th-consecutive day. It is also worth mentioning that 242,230 people have died from the infection in the U.S., and 6,391,208 have recovered so far. Considering the current coronavirus condition in Europe, the major Europeans like Germany and France have imposed severe restrictions to try controlling the spread. 


Moving ahead, the market traders will keep their eyes on the U.S. economic calendar, which highlights updates on inflation and consumer confidence along with Thursday’s report on initial jobless claims. In the meantime, the Brexit trade talks’ updates could not lose their importance on the day.

The AUD/USD consolidates with bullish sentiment at the 0.7294 area, facing a solid resistance at the 0.7294 level extended by a triple top pattern. On the higher side, the upward breakout can drive the buying drift to the 0.7346 mark. Alongside this, the support extends to operate at the 0.7220 mark today. The MACD trades with a mixed bias; nevertheless, it can adapt bullish if AUD/USD runs to crossover 0.7295 mark. Good luck!

Categories
Forex Market Analysis

Daily F.X. Analysis, November 09 – Top Trade Setups In Forex – BOE Gov Bailey Speaks! 

On the news front, the investor’s focus is likely to stay on the German Trade Balance, and the ECB President Lagarde Speaks ahead of the BOE Gov Bailey Speech during the European session today. German Trade Balance is forecasted to improve from 15.7B to 17.2B, and it may help support the Euro as a single currency, while the ECB President Lagarde and BOE Bailey is scheduled to speak at Green Horizon Summit via satellite.

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18746 after placing a high of 1.18907 and a low of 1.17952. The EUR/USD pair was rose to its highest level since September 15 on Friday. The EUR/USD pair has been holding onto gains as the markets were following the U.S. elections. The lead of Democratic Joe Biden in U.S. elections kept the U.S. dollar under pressure and supported the EUR/USD pair’s bullish momentum.

The safe-haven dollar remained on the back foot throughout the week and pushed the riskier EUR/USD pair to its multi week’s highest level. The greenback was also weak due to the dovish decision by Federal Reserve this week. The Federal Reserve Chairman, Jerome Powell, said that the pace of the recovery was moderated and that fed has discussed the bond-buying scheme. He also showed his concerns about the resurgence of coronavirus in the U.S. and all over the globe and urged lawmakers to act.

On the data front, at 12:00 GMT, the German Industrial Production for September declined to 1.6% from the forecasted 2.6% and weighed on Euro. At 12:45 GMT, the French Prelim Private Payrolls for the quarter raised to 1.8% from the forecasted 0.2% and supported Euro that added in the gains of EUR/USD pair. The French Trade Balance for September came in as -5.7B against the expected -6.9B and supported Euro. At 14:00 GMT, the Italian Retail Sales for September came in as -0.8%against the expected -1.5% and supported Euro and pushed EUR/USD pair higher.

At 18:30 GMT, Average Hourly Earnings from the U.S. for October dropped to 0.1% from the projected 0.2% and weighed on the U.S. dollar and supported the upward trend of the EUR/USD pair. The Non-Farm Employment Change for October elevated to 638K against the predictable 595K and supported the U.S. dollar. In October, the Unemployment Rate from the U.S. dropped to 6.9%from the projected 7.7% and supported the U.S. dollar. At 20:00 GMT, the Final Wholesale Inventories for September came in as 0.4% against the expected -0.1% and weighed on the U.S. dollar that ultimately added strength in the EUR/USD pair on Friday.

The COVID-19 cases have been continuously rising on both sides, Europe and the USA, and once the U.S. elections settle, the par could see a decline in its prices.

The focus of market participants was only on the U.S. election, where over the weekend, the Democratic Joe Biden won the presidency of the United States and became 46th President of the USA. Despite the lawsuits claiming electoral fraud, Biden was elected as U.S. President and weighed on the U.S. dollar that ultimately will help the EUR/USD pair to post further gains.

Daily Technical Levels

Support    Resistance

1.1733      1.1884

1.1647      1.1947

1.1583      1.2034

Pivot point: 1.1797

EUR/USD– Trading Tip

The EUR/USD is trading bullish at the 1.1890 level amid a weaker U.S. dollar. The pair may head further higher until the 1.1945 level, having immediate support at the 1.18826 level. On the 4 hour timeframe, the EUR/USD has violated the double top resistance level of 1.1882 level, which may lead the EUR/USD pair further higher until the 1.1945 mark. The MACD supports buying; therefore, we should look for a buying trade over the 1.1880 level.  


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.31474 after placing a high of 131770 and a low of 1.30924. The GBP/USD pair rose to its highest since September 07 on Friday despite the better than expected Unemployment rate and NFP data from the U.S.

The market’s focus was shifted to the U.S. Election results that were showing a Democratic lead; it weighed on the U.S. dollar and contributed to the GBP/USD pair’s gains. The strong Employment figures also failed to improve the mood around the U.S. dollar as investors were not impressed by it, and they continued following the U.S. election results.

Over the weekend, Joe Biden won 290 Electoral College votes against Donald Trump’s 214 that confirmed Biden’s victory as the candidate should secure at least 270 Electoral College votes to win the presidency.

On the data front, at 13:30 GMT, the Halifax Housing Price Index for October declined to 0.3% against the forecasted 1.0% and weighed on British Pound and capped further gains in GBP/USD pair.

On the U.S. front, at 18:30 GMT, Average Hourly Earnings from the U.S. for October fell to 0.1% from the estimated 0.2% and weighed on the U.S. dollar and supported the upward trend of the GBP/USD pair. The Non-Farm Employment Change for October rose to 638K against the estimated 595K and supported the U.S. dollar. In October, the Unemployment Rate from the U.S. fell to 6.9%from the estimated 7.7% and supported the U.S. dollar. At 20:00 GMT, the Final Wholesale Inventories for September came in as 0.4% against the estimated -0.1% and weighed on the U.S. dollar and provided strength to the GBP/USD pair.

The improved employment figures from the U.S. failed to give any strength to the falling U.S. dollar on Friday as the focus of traders was only towards the U.S. election results leading Joe Biden over Donald Trump. Whereas, on the Brexit front, the UK PM Boris Johnson will be under greater pressure to strike a Brexit deal with the E.U. as Joe Biden has won the presidency. It is because a no-deal Brexit could seriously threaten relations with a new Democratic administration.

Joe Biden has already made it clear that there will be no agreement on a post-Brexit UK-US trade deal if the U.K. disagreed with the E.U. The talks between E.U. & U.K. officials were continued throughout the week, and the result of those talks has not been published yet. The market’s focus will be shifted towards economic data and other fundamentals rather than on U.S. elections in the coming week as the uncertainty regarding the U.S. election has faded away.

Daily Technical Levels

Support    Resistance

1.2997      1.3222

1.2851      1.3301

1.2771      1.3448

Pivot point: 1.3076

GBP/USD– Trading Tip

The GBP/USD is also trading with a strong bullish bias due to a weaker dollar in the 1.3181 area. The pair has violated the intraday resistance level at 1.3159, which is now working as a support for Sterling. On the higher side, the continuation of an upward trend can lead the GBP/USD pair until the 1.3226 area. The cable had violated the descending triangle pattern, and ever since, it’s trading with a bullish bias. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 103.364 after placing a high of 103.758 and a low of 103.174. The USD/JPY pair was dropped to its lowest since 8th March. The U.S. dollar against the Japanese Yen on Friday dragged the pair to a fresh 8-months lowest level as the chances for Joe Biden to win the U.S. election increases. The USD/JPY pair followed the USD weakness throughout the week and reached the 103 level.

The investors have welcomed a Democrat government’s prospects with a split congress where Republicans can block initiatives to raise taxes or introduce tighter regulations with a risk rally that sent the safe-haven U.S. dollar to multi-month lows against its main rivals.

On the data front, at 04:30 GMT, the Average Cash Earning for the year came in as -0.9% against the forecasted -1.1% and supported the Japanese Yen and added further losses in the USD/JPY pair. The Household Spending for the year came in as -10.2% against the expected -10.5% and supported the Japanese Yen that added further weakness in the currency pair USD/JPY.

From the U.S. side, at 18:30 GMT, Average Hourly Earnings from the U.S. for October weakened to 0.1% from the anticipated 0.2% and weighed on the U.S. dollar added further losses in the USD/JPY pair. The Non-Farm Employment Change for October surged to 638K against the anticipated 595K and supported the U.S. dollar, and capped further losses in the USD/JPY pair. In October, the Unemployment Rate from the U.S. weakened to 6.9%from the anticipated 7.7% and supported the U.S. dollar. At 20:00 GMT, the Final Wholesale Inventories for September came in as 0.4% against the anticipated -0.1% and weighed on the U.S. dollar and dragged the pair USD?JPY to the multi-month lowest level.

The USD/JPY pair’s main driver at the ending day of the week remained the U.S. dollar weakness due to Biden’s prospects in U.S. elections. Over the weekend, the results showed that Biden won 290 Electoral College votes compared to Trump’s 214 and became the 46th President of the U.S. Biden is expected to deliver a larger stimulus package, and the markets were following these hopes that could lead further to the downside of the safe-haven U.S. dollar.

Daily Technical Levels

Support    Resistance

103.09      104.22

102.70      104.95

101.97      105.34

Pivot point: 103.83

USD/JPY – Trading Tips

The USD/JPY has violated the descending triangle pattern at 104.149 area, and on the lower side, it’s testing the support area of 103.270 level. Recently the closing of bullish engulfing patterns may drive an upward movement in the market. On the higher side, the USD/JPY can go after the next 103.850 mark. On the flip side, violation of the 103.215 level can extend selling until the 102.750 mark. The MACD is also showing oversold sentiment among investors; therefore, we should look for a bullish trade over 103.270 and selling below the 103.830 level today. Good luck! 

Categories
Forex Signals

AUD/USD Bullish Channel Support Assie – Quick Update

AUD/USD Bullish Channel Support Assie – Quick Update

The AUD/USD currency pair failed to extend its previous day bullish moves and took fresh offers near below the 0.7250 level mainly due to prevalent risk-off market sentiment, triggered by the worsening coronavirus (COVID-19) conditions in the U.S. and the U.K., which exerted some selling pressure on the perceived riskier Aussie and dragged the currency pair below 0.7000 marks. 

However, the global risk sentiment was further pressured by the uncertainty surrounding the U.S. election, triggered by the rumors concerning the delay in U.S. election results until January. On the other hand, the broad-based U.S. dollar fresh strength, backed by the risk-off market sentiment, has also played its major role in undermining the currency pair. 

On the contrary, the currency pair’s losses were capped by the RBA’s monetary policy statement, in which the RBA explicitly calling out no further reduction in interest rates, which tend to underpin the Australian dollar and helps the currency pair to limit its deeper losses. At the moment, the AUD/USD currency pair is currently trading at 0.7255 and consolidating in the range between 0.7250 – 0.7285.

The market trading sentiment remains depressed during the early Asian trading session due to the second wave of coronavirus infections in the U.S. and the U.K. getting worse day by day. As per the latest report, there are 109,000 new COVID-19 cases from the U.S. so far. Thus, these figures marked the second day in a row with over 100,000 new cases after beating Wednesday’s daily record.

Additionally, the long-lasting inability to pass the U.S. fiscal package, as well as the jitters of the American presidential election also weighed on the risk sentiment, which eventually undermined the perceived riskier Australian dollar and contributed to the currency pair gains.

Despite Democratic candidate Joe Biden’s heavy role in the electoral votes, currently around 260 counts against 270 required, the U.S. election results still not showing any decision. However, the reason could be attributed to President Donald Trump’s lawsuits against multiple states. As per the latest report from Pennsylvania, Trump’s lead getting narrowed over the democratic rival Biden.

Despite this, the broad-based U.S. dollar succeeded in stopping its last session losses and took some fresh bids during Friday’s Asian session as investors started to prefer the safe-haven assets in the wake of the risk-off market sentiment. However, the U.S. dollar gains seem rather unaffected by the downbeat comments from the Fed Chair Jerome Powell. On the other hand, the U.S. dollar gains were also capped by the prevalent worries over the U.S. economic recovery amid the reappearance of coronavirus cases, which could be bad for both the U.S. and the global economy. However, the U.S. dollar gains become the key factor that kept the currency pair under pressure. Simultaneously, the U.S. Dollar Index that tracks the greenback against a basket of other currencies recovered to 92.698.

The Fed has performed as broadly expected, maintaining its benchmark interest rate at the 0%-0.25% range and its bond-buying program unchanged. In the meantime, he showed readiness to fulfill its pledge to support the U.S. economy, “promoting its maximum employment and price stability goals in times of the COVID-19 pandemic.

At home, the currency pair’s losses were capped by the RBA’s monetary policy statement, in which the RBA indicated for no further reduction in interest rates, which tend to underpin the Australian dollar and helps the currency pair to limit its deeper losses.

Moving ahead, the market traders will keep their eyes on the American employment numbers for October., USD price dynamics, and coronavirus headlines, which could give a fresh direction for the currency pair. In the meantime, the updates surrounding the U.S. elections could not lose their importance on the day.


Daily Support and Resistance

S1 0.6867

S2 0.7007

S3 0.7094

Pivot Point 0.7146

R1 0.7233

R2 0.7286

R3 0.7426

The AUD/USD traded distinctly bullish at the 0.7262 area, with a critical resistance of 0.7282 and 0.7335. In the daily chart, the AUD/USD has established a substantial buying candle, conferring substantial bullish sentiment among investors. While on the lower side, the support can be seen around the 0.7230 mark. Bullish sentiment rules the market. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, November 06– Top Trade Setups In Forex – NFP Figures in Highlights! 

The eyes will remain on the U.S. NFP data on the news side, which is expected to report a slight drop from 661K to 595K during the previous month. Besides, the U.S. Average Hourly Earnings m/m and Unemployment Rate will also remain the main highlight of the day, and these may determine the USD trend for today and next week. Let’s wait for the news.

Economic Events to Watch Today  

  


EUR/USD – Daily Analysis

The EUR/USD pair was closed to 1.18269 after placing a high of 1.18595 and a low of 1.17106. The EUR/USD pair surged to its highest level since October 23 amid the U.S. dollar weakness ahead of U.S. election results.

The U.S. dollar came under fresh pressure after the chances for Joe Biden looked increasingly likely to claim the U.S. presidency. Furthermore, the U.S. stimulus package’s expectations will be delivered by any elected government after the results will also be announced exerted pressure on the U.S. dollar and supported the EUR/USD pair’s upward momentum.

On the data front, at 12:00 GMT, the German Factory Orders for September declined to 0.5% against the expected 2.1% and weighed on Euro. At 15:00 GMT, the Retail Sales from the Eurozone for September declined to -2.0% against the expected -1.4% and weighed on single currency Euro that capped further upside movement of EUR/USD pair on Thursday.

From the U.S. side, at 17: 30 GMT, the Challenger Job Cuts for the year from the U.S. came in as 60.4% in comparison to the previous 185.9%. At 18:30 GMT, the Unemployment Claims for the last week were rushed to 751K against the estimated 740K and weighed on the U.S. dollar added further in the gins of EUR/USD pair. The Prelim Nonfarm Productivity for the quarter surged to 4.9% against the predicted 3.6% and weighed on the U.S. dollar. At 18:32 GMT, the Prelim Unit Labor Costs for the quarter came in as -8.9% against the expected -10.0% and supported the U.S. dollar that capped further gains in EUR/USD pair.

Meanwhile, the European Commission reduced its economic growth prediction for next year after governments’ reintroduced lockdowns to control the coronavirus infections. On Thursday, the E.U. executive in Brussels anticipated Eurozone growth of 4.2 percent in 2021, down from 6.1 percent anticipated in July. For 2020, it expects the economy to shrink by 7.8 percent.

Furthermore, the ECB Governing Council member and Bundesbank President, Jens Weidmann, said that it was important for the ECB’s monetary policy to remain expansionary on Thursday. These dovish comments from ECB’s governing council member also added further pressure to cap the gains in EUR/USD. However, investors’ focus remained on the U.S. Presidential election as a winner has not been announced. As few states were still counting votes while the U.S. President Donald Trump is already disputing some results in court. It weighed heavily on the U.S. dollar and pushed the EUR/USD pair higher on board.

Daily Technical Levels

Support    Resistance

1.1733      1.1881

1.1648      1.1944

1.1585     1.2029

Pivot point: 1.1796

EUR/USD– Trading Tip

The EUR/USD pair is trading sideways between a narrow trading range of 1.1859 – 1.1759 amid a weaker dollar. A bearish breakout of the 1.1759 level may extend the selling trend until the 1.1727 level. Simultaneously, the bullish crossover of the 1.1859 area can lead the EUR/USD pair until 1.1895. Breakout highly depends upon the U.S. NFP data today.


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.31502 after placing a high of 1.31545 and a low of 1.29309. The British Pound remained in demand and moved higher on Thursday against the U.S. dollar as the chances of Biden victory increased with the counting of votes.

The Bank of England announced on Thursday that it would expand its bond-buying structure by £150 billion to £895 billion, more than the estimates of a more modest £100 boost. Moreover, the BoE also renounced from setting negative interest rates that prompted investors to price that contrary development out.

Meanwhile, on late night Thursday, the Federal Reserve decision on interest rate did just like expected and left rates and bond-buying unchanged. The emphasis was on easing an additional stimulus required from the U.S. government and weighing on the greenback throughout this week.

The U.S. Dollar Index slipped to its lowest of 92.4880 on Thursday and gave strength to the rising GBP/USD pair. On the other hand, the Bank of England’s Monetary Policy Committee unanimously voted to maintain its benchmark bank rate at 0.1%. The market attention was captured by the changes to their Quantitative Easing and economic estimates mentioned in the monetary policy report.

The committee told that the rapid rise in COVID infection rates and subsequent restrictions across the U.K. forced it to respond by increasing its asset purchasing program by 150 billion British Pound to a total of 95 billion Pound surpassed the majority of market expectations of just a 100 billion increase.

The program will last until the end of 2021 beyond the summer, and instead of declining, the British Pound increased as the U.S. dollar was also declining on the day amid the election uncertainty. This added support to the GBP/USD pair that rose above the 1.31500 level on Thursday.

On the data front, the Asset Purchase Facility was increased to 895B against the expected 845B. The official bank rate from the Bank of England remained at 0.10%. At 14:30 GMT, the Construction PMI from Britain also declined to 53.1 against the forecasted 55.0.

From the U.S. side, at 17: 30 GMT, the Challenger Job Cuts for the year from the U.S. came in as 60.4% in comparison to the previous 185.9%. At 18:30 GMT, the Unemployment Claims for the last week advanced to 751K against the projected 740K and weighed on the U.S. dollar that added further to the GBP/USD pair’s gains. The Prelim Nonfarm Productivity for the quarter rose to 4.9% against the projected 3.6% and weighed on the U.S. dollar that added strength to the GBP/USD pair. At 18:32 GMT, the Prelim Unit Labor Costs for the quarter came in as -8.9% against the estimated -10.0% and supported the U.S. dollar.

Meanwhile, the U.S. dollar was also weak due to Biden’s chances of victory that would allow the issuance of a massive stimulus package after the election results. These hopes also weighed on the U.S. dollar and supported the GBP/USD pair’s upward trend.

Daily Technical Levels

Support    Resistance

1.2997      1.3222

1.2851      1.3301

1.2771      1.3448

Pivot point: 1.3076

GBP/USD– Trading Tip

Just like the EUR/USD, the GBP/USD is also trading sharply bullish, having violated the narrow trading range of 1.3122 – 1.2940 area. The Cable has recently broken the double top resistance level of 1.3017 level and now heading further higher until the 1.3158 resistance area. Above this level, the odds of buying remain strong today. On the higher side, the Sterling may find next resistance around 1.3182 while the bearish breakout of 1.3037 may lead the Cable towards the 1.3005 level. Price action highly depends upon the U.S. NFP data today.


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 103.514 after placing a high of 104.547 and a low of 103.441. The USD/JPY pair dropped to its lowest level since March 2020 on the back of a weak U.S. dollar due to increasing hopes for Biden recovery. On Thursday, the Federal Reserve kept its benchmark interest rate unchanged at 0-0.25% range along with its target for asset purchases. According to the monetary policy statement, the economic activity and the employment levels have continued recovering, although they remain at levels well below those at the beginning of the year. The Federal Reserve also warned that the weaker consumer demand and the falling oil prices were holding down consumer inflation.

The comments from Fed chair Jerome Powell remained dovish as he affirmed that the pace of improvement has moderated. He also said that the economic activity continued to recover; he also warned about the highly uncertain path ahead that might have increased negative pressure on the U.S. dollar and added in the USD/JPY pair’s losses.

The U.S. dollar reversed its direction on Thursday from the previous day on the back of expectations of Joe Biden’s recovery as the counting of votes was in his favor so far. However, U.S. President Donald Trump has already filed lawsuits for recounting that could delay the results of the U.S. Presidential election.

On the data front, at 17: 30 GMT, the Challenger Job Cuts for the year came in as 60.4% in comparison to the previous 185.9% from the U.S. At 18:30 GMT, the Unemployment Claims for the last week rose to 751K against the expected 740K and weighed on the U.S. dollar and added in the USD/JPY pair’s losses. The Prelim Nonfarm Productivity for the quarter raised to 4.9% against the estimated 3.6% and weighed on the U.S. dollar. At 18:32 GMT, the Prelim Unit Labor Costs for the quarter came in as -8.9% against the projected -10.0% and supported the U.S. dollar.

The main driver of the USD/JPY pair on Thursday was Biden’s chances of winning the U.S. election 2020 as he will issue a massive stimulus package, which would cause a decline in the U.S. dollar strength.

Daily Technical Levels

Support    Resistance

103.09      104.22

102.70 104.95

101.97 105.34

Pivot point: 103.83

USD/JPY – Trading Tips

The USD/JPY has violated the descending triangle pattern at 104.149 area, and on the lower side, it’s heading towards the next support area of 103.300 level. Violation of these ranges may determine the next trend in the USD/JPY pair. A bullish breakout of 104.149 level can extend the buying trend until 104.880. Conversely, the bearish breakout of 103.300 can lead the USD/JPY pair towards the 102.530 area. The MACD is also showing bearish bias among investors; therefore, let’s wait for a breakout before taking the next position in the USD/JPY. Good luck! 

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Forex Signals

AUD/USD Bounces off Support 0.7155 – Good time to go long?

The AUD/USD pair was closed at 0.71864 after placing a high of 0.72218 and a low of 0.70484. The pair AUD/USD rose to its highest since 12th October on Wednesday amid the U.S. political uncertainty after the election results seemed tighter than expected.

The AUD/USD pair first declined sharply on Wednesday amid the recent decision of RBA to cut its interest rates to 0.10% from the 0.25% and weighed on Aussie. The RBA also announced its plans to buy A$200 billion government bonds with maturities of around 5-10 years over the next six months.

However, the losses in AUD/USD pair were reversed, and the par started to post gains as the U.S. dollar started losing its gains in late trading session as the U.S. election results delayed and raised uncertainty. The markets started moving with the threats of lawsuits and recounting of votes that would go on for a couple of days and delay the final election results.

The declining U.S. dollar helped the AUD/USD pair to raise its prices and move in the upward direction on Wednesday. On the data front, at 02:30 GMT, the AIG Construction Index for October raised to 52.7 against the previous 45.2. At 05:30 GMT, the Retail Sales for September came in as -1.1% against the forecasted -1.5% and supported the Australian dollar that added strength to AUD/USD pair.

At 18:15 GMT, the ADP Non-Farm Employment Change for October plunged to 365K against the predictable 650K and weighed on the U.S. dollar that ultimately supports the AUD’s upward momentum/USD pair. At 18:30 GMT, the Trade Balance from the U.S. for October remained flat with the anticipations of -63.9B. 

At 19:45 GMT, the Final Services PMI for October rose to 56.9 from the estimated 56.0 and supported the U.S. dollar. At 20:00 GMT, the ISM Services PMI for October fell to 56.6 from the predictable 57.4 and weighed on the U.S. dollar that added further strength to AUD/USD pair.


Daily Technical Levels

Support Resistance

0.7066 0.7215

0.6972 0.7270

0.6917 0.7364

Pivot point: 0.7121

The AUD/USD continues trading sideways, facing immediate resistance at the 0.7160 level along with a support area of 0.7140. The bullish breakout of the 0.7190 level can extend the buying trend until the 0.7220 level. Conversely, the bearish breakout of the 0.7140 level can drive selling bias until 0.7060. Eyes stay on the U.S. elections outcome. Good luck! 

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Forex Market Analysis

Daily F.X. Analysis, November 05 – Top Trade Setups In Forex – Eyes on U.S. Election Results! 

On the news front, the eyes will remain on the outcome of the U.S. elections, although Joe seems to be the next president of the United States considering the voting lead against Trump so far. Besides, the Monetary Policy decision from the Bank of England will remain in highlights. The BOE isn’t expected to make any changes in the policy; however, the press conference will be worth watching. The muted impact is expected on the news. Lastly, the Unemployment Claims from the U.S. may support the U.S. dollar today.

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17227 after placing a high of 1.17706 and a low of 1.16025. After falling to its lowest since mid-July, the EUR/USD pair reversed and started to rise and ended Wednesday with gains. The EUR/USD pair has been having a highly volatile week so far as uncertainty around the U.S. 2020 Presidential Election intensifies. Results have been tighter than the market’s expectations, and investors felt hesitant to sell the safe-haven U.S. dollar.

On Wednesday, the U.S. dollar rally kept the EUR/USD pair under pressure and made it hard to sustain gains Wednesday as both share a negative correlation. Moreover, the Eurozone’s coronavirus situation also worsened as the pandemic’s second wave raised across the bloc and forced many major economies, including Germany and France, to re-introduce fresh restrictions and lockdown measures.

In turn, the ECB has been signaling that it could introduce a new monetary policy stimulus that only added in the weakness of Euro currency and kept the gains in EUR/USD pair limited on Wednesday.

On the data front, at 13:00 GMT, the Spanish Unemployment Change for October came in as 49.6K compared to the previous -26.3K. At 13:15 GMT, the Spanish Services PMI for October raised to 41.1 from the forecasted 40.0 and supported Euro and added further in EUR/USD air’s gains. AT 13:45 GMT, the Italian Services PMI for October declined to 46.7 against the forecasted 47.4 and weighed on Euro.

 At 13:50 GMT, the French Final Services PMI remained flat at 46.5. At 13:55 GMT, the German Final Services PMI raised to 49.5 against the forecasted 48.9 and supported the single currency Euro. At 14:00 GMT, the Final Services PMI from the whole bloc for October also surged to 46.9 against the forecasted 46.2 and supported the single currency Euro and added further upside momentum to EUR/USD pair.

From the U.S. side, at 18:15 GMT, the ADP Non-Farm Employment Change for October dropped to 365K against the estimated 650K and weighed on the U.S. dollar that added strength to the upward momentum of the EUR/SD pair. At 18:30 GMT, the Trade Balance from the U.S. for October came in line with the expectations of -63.9B. At 19:45 GMT, the Final Services PMI for October surged to 56.9 from the projected 56.0 and supported the U.S. dollar and capped further gains in EUR.USD pair.

At 20:00 GMT, the ISM Services PMI for October fell to 56.6 from the anticipated 57.4 and weighed on the U.S. dollar and provided support to the rising EUR/USD pair.

The U.S. dollar is a safe-haven currency that tends to rise during uncertain environment and in the U.S. 2020 Presidential Election, the fears that election result could be close or contested, it led to a rise in the safe-haven demand and the U.S. dollar, that ultimately added pressure on EUR/USD pair.

Daily Technical Levels

Support    Resistance

1.1650      1.1757

1.1588      1.1802

1.1543      1.1864

Pivot point: 1.1695

EUR/USD– Trading Tip

The EUR/USD is trading sideways, with a wide trading range of 1.1615 to 1.1760 area as the U.S. elections keep the markets on the move. On the lower side, the bearish breakout of the 1.1615 area can extend selling until the next support area of the 1.1591 level. The release of European services PMI data may support the pair; elsewhere, the outcome of elections may drive further market movement. The MACD is entering the selling zone, but we may not see further selling until the 1.1615 level gets violated. 


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29142 after placing a high of 1.31401 and a low of 1.29839. The broad-based U.S. dollar strength added pressure on GBP/USD pair and kept it on the bearish track on Wednesday.

The uncertainty surrounding the U.S. election results increased after the race to White House became tighter than anticipation. However, the results from key battle states like Wisconsin, Michigan, and Pennsylvania were delayed. This uncertainty forced investors to hold onto their U.S. dollar positions and weighed on GBP/USD pair.

On the previous day, the markets were moving on Biden recovery expectations, but as results from different states were announced, the election results became tighter. Chances for a divided government increased, and the blue wave decreased that raised the U.S. dollar onboard and weighed on GBP/USD pair.

On the data front, at 14:30 GMT, the Final Services PMI for October fell to 51.4 against the estimated 52.3 and weighed on British Pound. From the U.S. side, at 18:15 GMT, the ADP Non-Farm Employment Change for October fell to 365K against the expected 650K and weighed on the U.S. dollar. At 18:30 GMT, the Trade Balance from the U.S. for October came in line with the anticipations of -63.9B. At 19:45 GMT, the Final Services PMI for October rushed to 56.9 from the estimated 56.0 and supported the U.S. dollar and weighed on GBP/USD pair. At 20:00 GMT, the ISM Services PMI for October declined to 56.6 from the projected 57.4 and weighed on the U.S. dollar.

In the U.K., the lawmakers approved a one-month lockdown for England as the coronavirus cases were continuously increasing. On Wednesday, the U.K. reported 25,177 new cases in a single day against Tuesday’s 20,018. The British Pound came under fresh pressure after these depressing highlights from the U.K. and added further losses in GBP/USD pair.

The Bank of England will release its monetary policy decision on Thursday. The uncertainty about the decision of BoE also increased with the escalated version of the coronavirus pandemic. The Bank is expected to keep rates stable, but as the lockdowns are re-introduced banks could change its decision and announce further easing. These uncertainties also kept the local currency under pressure and kept weighing on GBP/USD pair.

Daily Technical Levels

Support   Resistance

1.2913      1.2941

1.2898      1.2954

1.2884      1.2969

Pivot point; 1.2926

GBP/USD– Trading Tip

Just like the EUR/USD, the GBP/USD is also trading sideways in between a narrow trading range of 1.3122 – 1.2940 area. The Cable has recently violated the downward channel, supporting the GBP/USD pair around the 1.2940 level. Above this level, the odds of buying remain strong today. On the higher side, the Sterling may find next resistance around 1.3122 while the bearish breakout of 1.2940 may lead the Cable towards the 1.2855 level. A choppy session is expected today. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.517 after placing a high of 105.343 and a low of 104.149. The USD/JPY pair moved upward towards its 11-days highest level on Wednesday but it lost most of its daily gains in the late trading session.

The primary driver of the USD/JPY pair was the USD’s market valuation on Wednesday. As the early election results showed that the blue wave was un-likely, it supported the safe-haven U.S. dollar and pushed the USD/JPY pair higher. The U.S. Dollar Index (DXY) also rose on Wednesday and moved to the 94.30 level.

As the markets were moving in previous days over the chances of Biden victory, after tighter election results, the chances for divided government increased and weighed on market sentiment. The hopes for larger stimulus also faded away with the declining hopes of the blue wave and the U.S. dollar gained through it and supported a strong bullish move on Wednesday.

However, on late night Tuesday, when it was clear that there will not be a winner, President Trump falsely claimed victory when millions of votes were still uncounted in the tight presidential race. This weighed on the U.S. dollar and the pair USD/JPY started to rise.

On the data front, at 18:15 GMT, the ADP Non-Farm Employment Change for October dropped to 365K against the projected 650K and weighed on the U.S. dollar. At 18:30 GMT, the Trade Balance from the U.S. for October remained flat with the expectations of -63.9B. At 19:45 GMT, the Final Services PMI for October raised to 56.9 from the projected 56.0 and supported the U.S. dollar. At 20:00 GMT, the ISM Services PMI for October dropped to 56.6 from the expected 57.4 and weighed on the U.S. dollar.

Meanwhile, the Bank of Japan released its monetary policy meeting of September on Wednesday that showed that some policymakers called for deeper scrutiny on how to address the fallout from the coronavirus pandemic as the economic outlook remained highly uncertain.

Many in the nine-member board agreed that it was sufficient to maintain the current ultra-loose monetary policy, for now, to cushion the economic blow from the pandemic. But some saw the need to debate how the BOJ could re-shape its policy in an era where the population must balance the need to contain the virus and sustain economic activity.

The Bank of Japan Governor Haruhiko Kuroda has said that the central bank’s focus will be on providing liquidity to cash-strapped firms hit by the pandemic. He has also indicated that deeper debate on how to achieve its 2 percent inflation target will be put on the back burner—these added strengths in the Japanese Yen and capped gains in the USD/JPY pair on Wednesday.

Daily Technical Levels

Support   Resistance

104.32      104.71

104.19      104.95

103.94      105.09

Pivot point: 104.57

USD/JPY – Trading Tips

The USD/JPY is trading choppy in between a wide trading range of 105.64 to 104.420 level. Violation of these ranges may determine the next trend in the USD/JPY pair. A bullish breakout of 105.062 level can extend the buying trend until 105.590. Conversely, the bearish breakout of 104.426 can lead the USD/JPY pair towards the 104 area. The MACD is also showing mixed bias among investors; therefore, let’s wait for a breakout before taking the next position in the USD/JPY. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, November 04 – Top Trade Setups In Forex – Eyes on U.S. Election Results! 

On the news front, the market is exhibiting mixed but sharp movements in the wake of U.S. elections. Democratic party’s Joe Biden seems to take the lead so far, and his winning remains solid. The market is exhibiting safe-haven appeal in the wake of election results. Besides, the European economy is due to release Services PMI figures that may drive some price action in the market, but most of it is likely to be overshadowed by the U.S. election outcome. 

Economic Events to Watch Today  

 


 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17198 after placing a high of 1.17396 and a low of 1.16297. The EUR/USD pair surged on Tuesday and recovered some of its previous daily losses of 6 consecutive sessions. The pair climbed to 1.1739 level on U.S. Election Day as the U.S. dollar was down by 0.83% on the day, and the U.S. Dollar Index was trading at a six-day lower level under 93.40. The improvement in the market sentiment could be attributed to the declining expectations of any outcome of a disputed election that could result in a legal battle, political and social tension.

The rise in EUR/USD pair’s prices was also because of the anticipations of a so-called Blue wave outcome of the U.S. election. As the victory of Joe Biden would have a negative impact on the U.S. dollar amid his intentions to deliver a massive stimulus package after his victory, the EUR/USD pair gained further and rose to its three days highest level on Tuesday.

Apart from the U.S. election, rally in EUR/USD pair continued on the day due to risk appetite after European Central Bank reported that Pandemic Emergency Purchase Programme (PEPP) would likely remain the main instrument to increase the stimulus at the next meeting as the ECB has already committed to act in December and has not ruled out using all available instruments. However, the virus spread and the subsequent lockdowns could weigh on EUR/USD pair in the coming days.

On Tuesday, France reported the highest death toll since April, and both Netherlands and Hungary announced new virus lockdowns. These concerning situations in Eurozone related to the coronavirus pandemic kept the gains in EUR/USD pair limited on Tuesday.

On the data front, the French GOV Budget Balance was released at 12:45 GMT that came in as -161.6B for September compared to Previous -165.7B. From the U.S. side, the Wards Total Vehicle Sales dropped to 16.2M from the expected 16.5M and weighed on the U.S. dollar that ultimately added further gains in EUR/USD pair on Tuesday.

The main driver of the EUR/USD pair remained the U.S. dollar on the U.S. Election Day on Tuesday that was under pressure in the uncertain environment and continued supporting the EUR/USD pair’s upward momentum,

Daily Technical Levels

Support Resistance

1.1624     1.1657

1.1607     1.1673

1.1591     1.1690

Pivot point: 1.1640

EUR/USD– Trading Tip

The EUR/USD is trading sideways, with a wide trading range of 1.1615 to 1.1760 area as the U.S. elections keep the markets on the move. On the lower side, the bearish breakout of the 1.1615 area can extend selling until the next support area of the 1.1591 level. The release of European services PMI data may support the pair; elsewhere, the outcome of elections may drive further market movement. The MACD is entering the selling zone, but we may not see further selling until the 1.1615 level gets violated. 


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.30635 after placing a high f 1.30787 and a low of 1.29073. The GBP/USD pair reached its five-day highest level on Tuesday amid broad-based U.S. dollar weakness during the U.S. Election Day.

The Americans were heading to the polls, and the market participants were shrugging off the risk aversion by anticipating a clear Democratic victory that would open the way for a larger fiscal stimulus package and, thus, weakened the U.S. dollar, ultimately added in the gains of GBP/USD pair.

Meanwhile, the lack of any news from the Brexit negotiations that have limited period left as the December 31 deadline was near, along with the introduction of a one-month lockdown in the U.K. to curb the traders ignored the effects of COVID-19 infections on Tuesday that could have capped further gains in the currency pair GBP/USD.

Despite there was no news related to Brexit progress from the ongoing talks between the E.U. and the U.K., the hopes for a last-minute deal helped prop up the British Pound. These hopes, combined with the U.S. dollar weakness, added additional gains in GBP/USD pair. The U.S. dollar index fell sharply to below 93.50 level, and it was down by 0.75%.

On the data front, the U.S. Factory Orders for September came in as 1.1% from the expected 1.0%, and the U.S. Wards Total Vehicle dropped to 16.2M from the anticipated 16.5 M weighed on the U.S. dollar that helped the British Pound to U.S. dollar exchange rate.

On the Brexit front, the reports indicated that talks were stuck between both parties on a level playing field and fisheries, the two main issues that stalled progress a month ago. However, other areas like social security saw progress and raised bars for a Brexit deal before the transition period. Both top negotiators Michel Barnier and David Frost will report on the progress of recent talks on Wednesday, and traders are keenly awaiting it.

The pair GBP/USD likely continue trading alongside risk-related sentiment during the upcoming sessions. As well as British Pound will not ignore any Brexit-related headlines once the picture of the U.S. election became clear.  

Daily Technical Levels

Support Resistance

1.2913     1.2941

1.2898     1.2954

1.2884     1.2969

Pivot point; 1.2926

GBP/USD– Trading Tip

Just like the EUR/USD, the GBP/USD is also trading sideways in between a narrow trading range of 1.3122 – 1.2940 area. The Cable has recently violated the downward channel, supporting the GBP/USD pair around the 1.2940 level. Above this level, the odds of buying remain strong today. On the higher side, the Sterling may find next resistance around 1.3122 while the bearish breakout of 1.2940 may lead the Cable towards the 1.2855 level. A choppy session is expected today. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.497 after placing a high of 104.799 and a low of 104.431. After placing gains for three consecutive sessions, the pair reversed and posted losses on Tuesday. The U.S. dollar was under pressure on the day and was moving below 93.49 level on the back of expectations of a sweeping Democratic Party victory. The so-called blue-wave where the Joe-Biden with Democrats will take both Houses of Congress would indicate that further stimulus was on the way.

Since markets started to price in a global economic recovery, the U.S. dollar was on the back foot, a coronavirus vaccine, and ongoing fiscal and central bank stimulus in anticipation of renewed reflationary momentum.

The uncertainty over the vote’s outcome kept the safe-haven appeal in demand and continued supporting the Japanese Yen due to its safe-haven status and weighed on the USD/JPY pair. The uncertainty further escalated after Trump showed his willingness to challenge any unfavorable outcome to him legally. It came in response to the Initial polls that suggested that Biden was in the lead, and there will be a Blue/Democratic wave in the election. However, the revised readings showed that the gap between Trump and Biden was tightened.

Biden accused Trump of mishandling the COVID-19 pandemic and deserting safety precautions, including the mandated mask-use that could have saved countless lives from the crisis. Trump refuted that the American economy would be shattered under Biden, who wanted to raise most wealthy taxes.

If Biden wins the election, expectations are high that he will issue a massive stimulus package that would weigh on the U.S. dollar and ultimately drag the USD/JPY pair on the downside. Because of the stimulus package, traders started pricing it and kept selling the USD/JPY pair on Tuesday.

Meanwhile, on the data front, there was no macroeconomic release from Japan due to Bank Holiday. From the U.S., at 20:00 GMT, the Factory Orders in September elevated to 1.1% from the estimated 1.0%. The Wards Total Vehicle Sales for October weakened to 16.2 against the anticipated 16.5M and weighed on the U.S. dollar that ultimately added pressure on the USD/JPY pair on Tuesday.

Daily Technical Levels

Support Resistance

104.56     104.92

104.40     105.12

104.20     105.28

Pivot point: 104.76

USD/JPY – Trading Tips

The USD/JPY is trading choppy in between a wide trading range of 105.64 to 104.420 level. Violation of these ranges may determine the next trend in the USD/JPY pair. A bullish breakout of 105.062 level can extend the buying trend until 105.590. Conversely, the bearish breakout of 104.426 can lead the USD/JPY pair towards the 104 area. The MACD is also showing mixed bias among investors; therefore, let’s wait for a breakout before taking the next position in the USD/JPY. Good luck! 

Categories
Forex Signals

USD/CAD Extended Overnight Gains & Hit the Intra-Day – Elections In Play! 

Today in the Asian trading session, the USD/CAD currency pair managed to stop its three-day downtrend and witnessed some heavy buying around above mid-1.3200 level, mainly due to the broad-based U.S. dollar strength. However, the bullish sentiment around the U.S. dollar was being supported by President Donald Trump’s victory in Florida, which pushed the currency pair intraday high. 

On the contrary, the upticks in the oil prices, backed by the bigger-than-expected draw in the U.S. crude stockpiles, became the key factor that kept the lid on any additional crude gains oil prices. Moreover, the bullish sentiment around the crude oil prices was also supported by the reports suggesting that OPEC and its allies (OPEC+) maintaining current production restrictions, which tend to ease oversupply fears and contribute to oil prices. Currently, the USD/CAD currency pair is currently trading at 1.3234 and consolidating in the range between 1.3093 – 1.3278.

As we all know, the market risk sentiment has been flashing mixed signals since the day started amid U.S. election polls. However, the expectations of a blue wave in the U.S. Congress weakened quickly after President Donald Trump won Florida’s key battleground state. Conversely, the Arizona governor said that it was too early to call the state for Biden. As per Fox News, the tally on the electoral College now stands at 233 for both Joe Biden and Donald Trump, indicating that the race is tighter than expected.

At the USD front, the broad-based U.S. dollar managed to keep its gains throughout the day as the traders still cheering President Donald Trump’s victory in Florida. Put, the bid tone around the safe-haven greenback seems to have increased in response to betting markets having President Trump as the favorite to win elections. However, the U.S. dollar gains seem rather unaffected by the risk-on market sentiment. Thus, the gains in the U.S. dollar become the key factor that kept the currency pair higher. Meantime, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies rose to 93.898.

 At the crude oil front, the crude oil prices succeeded in gaining positive traction and surged to the $38.80 mark after a surprise draw of -8.01M, against 4.55M prior, in private inventory data published by the American Petroleum Institute (API) on Tuesday. This, in turn, boosted crude oil prices by over 3% overnight. Furthermore, the sentiment around crude oil was improved further after the reports concluded that the Organization of the Petroleum Exporting Countries (OPEC) and its allies maintained current production restrictions, which tend to ease oversupply fears and contribute to the oil prices. Thus, the rise in oil prices underpinned demand for the commodity-linked currency the loonie and became the major factor that capped the pair’s further gains.

In the absence of significant data/events on the day, the market traders will keep their eyes on the continuous drama surrounding the U.S. elections and updates about the U.S. stimulus package. 


Daily Support and Resistance

S1 1.2899

S2 1.3029

S3 1.3083

Pivot Point 1.3158

R1 1.3213

R2 1.3288

R3 1.3418

The USD/CAD is trading with a bullish bias at the 1.3278 level, having violated the immediate resistance level of 1.3223. it’s the same level extended by an upward channel, which got violated a couple of days ago. On the higher side, we can expect the USD/CAD pair to continue trading bullish until the 1.3323 level, as the MACD is also in support of the buying trend. The recent bullish engulfing is in support of buying; however, the election results may drive some volatility in the market. Let’s wait for a trading signal! 

Categories
Forex Signals

AUD/USD Reverse Overnight Bearish Moves – Eyes on 0.7206 Resistance! 

The AUD/USD currency pair succeeded to stop its overnight declining streak and drew some modest bids around above mid-0.7000 level mainly due to the risk-on market sentiment, which tends to underpin the perceived risk currency Australian dollar and contributes to the currency pair gains. Hence, the market trading sentiment was being supported by upbeat activity data from the U.S., China, and Europe, which rekindled economic recovery hopes and underpinned the market risk-tone. 

Apart from this, the market trading sentiment was further bolstered by the updates suggesting continuous progress of Brexit talks between the U.K. and the European Union (E.U.), which extended further support to the currency pair. Across the pond, the broad-based U.S. dollar selling bias, triggered by the marker risk-on sentiment, also played its major role in supporting the currency pair. Moreover, the losses in the U.S. dollar was further bolstered by the intensifying doubts over the U.S. economic recovery ahead of the U.S. presidential elections. 

On the contrary, the long-lasting coronavirus woes globally, as well as delays in the U.S. covid stimulus, keep challenging the upbeat market sentiment, which becomes the key factor that kept the lid on any additional gains in the currency pair. In the meantime, the gains in the currency pair were further capped by the reports suggesting that the RBA is expected to cut the benchmark rate and announce more Q.E. At this time, the AUD/USD currency pair is currently trading at 0.7057 and consolidating in the range between 0.7044 – 0.7063.

Despite the concern about the second wave of coronavirus infections, which leads the lockdown measures, the market trading sentiment remained positive during the early Asian session amid positive developments surrounding the Brexit talks between the U.K. and the European Union (E.U.), which in turn, underpinned the perceived risk currency Australian dollar and contributed to the currency pair gains. 

Across the ocean, bullish sentiment around the equity market was further bolstered by the upbeat activity numbers from the U.S., China, and Europe, which rekindled economic recovery hopes and underpinned the market trading sentiment. As per the latest report, the ISM manufacturing index jumped to the highest in more than two years.

As in result, the S&P 500 futures succeeded to extend its overnight positive momentum and remain bullish on the day, which tends to undermine the demand for the safe-haven U.S. dollar and extended support to the currency pair. Despite the upbeat U.S. data, the broad-based U.S. dollar failed to erase its overnight losses and remained under pressure on the day mainly due to the marker risk-on tone. Apart from this, the resurgence of coronavirus keeps fueling the fears that the U.S. economic recovery could be halt, which also keeps the greenback under pressure. However, the losses in the U.S. dollar could be considered as the major factor that kept the currency pair higher. Meanwhile, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies dropped to 93.977.

On the contrary, the intensifying coronavirus woes across the globe, as well as, intensifying lockdowns restrictions in Europe keep challenging the upbeat market sentiment and become the key factor that kept the lid on any additional gains in the currency pair. As per the latest report, Europe declared this weekend second lockdowns amid surging coronavirus cases. It is worth recalling that the market and industry professionals were not expecting renewed lockdowns for whole countries. Late last week, Austria announced a second lockdown until the end of November, including closing hotels for tourism, as well as restaurants except for takeaway and delivery. Apart from froths, the U.K., one of the largest economies in Europe, is also imposing lockdown restrictions while Belgium also returned to a nationwide lockdown. 

Elsewhere, the growing probabilities that the RBA will cut interest rates in November could also be considered as one of the key factors that kept the lid on any additional gains in the currency pair. It is worth recalling that the benchmark interest rate likely cut to 0.10% from 0.25%. 

In the absence of the major data/events on the day, the market traders will keep their eyes on the monetary policy meeting of the RBA and the U.S. presidential election for fresh directions. In the meantime, the risk catalyst like geopolitics and the virus woes, not to forget the Brexit, will also be key to watch.


Daily Support and Resistance

S1 0.69

S2 0.6966

S3 0.7008

Pivot Point 0.7033

R1 0.7075

R2 0.71

R3 0.7166

The AUD/USD has traded sharply bullish amid weaker U.S. dollar, as the pair crossed over 0.7150 level. On the higher side, the AUD/USD pair may head further higher until the next resistance area of 0.7199 level. The MACD and RSI are extremely overbought, and however, we have to wait for bearish reversal candles ahead of opening a sell trade in Aussie. On the lower side, the Aussie can find support at 0.7150 and 0.7105 mark. Let’s wait for the U.S. elections before opening any further trades today. Good luck!  

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Forex Market Analysis

Daily F.X. Analysis, November 03 – Top Trade Setups In Forex – U.S. Presidential Election in Highlights!

On the news front, eyes will remain on the U.S. Presidential Election. The voters will elect the 46th President of the United States. The winner will likely be projected before the official vote count is announced, based on early vote counts and exit polling. Besides, the U.S. Factory Orders m/m are also due, but their impact is likely to be overshadowed by the U.S. elections. 

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.16399 after placing a high of 1.16554 and a low of 1.16218. EUR/USD pair extended its losses and dropped for the 6th consecutive session on Monday amid the rising safe-haven appeal and coronavirus situation in Europe. The EUR/USD pair ended its day with modest losses as the currency pair’s bearish momentum was somehow cooled down because of the positive PMI data from European nations. Meanwhile, the U.S. dollar was also strong onboard due to its safe-haven status as well as due to the strong macroeconomic data on Monday.

At 13:15 GMT, the Spanish Manufacturing PMI for October raised to 52.5 against the expected 51.0 and supported the single currency Euro. At 13:45 GMT, the Italian Manufacturing PMI for October remained flat with a forecast of 53.9. At 13:50 GMT, the French Final Manufacturing PMI for October also came in as expected 51.3. At 13:55 GMT, the German Final Manufacturing PMI came in line with the anticipations of 58.0. At 14:00 GMT, the Final Manufacturing PMI for the whole bloc in October raised to 54.8 from the expected 54.4 and supported the single currency Euro.

Europe’s positive PMI data gave some support to Euro that ultimately capped further losses in EUR/USD pair.

From the U.S. side, at 19:45 GMT, the Final Manufacturing PMI for October remained flat at 53.4. At 20:00 GMT, the ISM Manufacturing PMI for October rushed to 59.3 from the estimated 55.6 and supported the U.S. dollar. The Construction Spending for September fell to 0.3% from the projected 1.0% and weighed on the U.S. dollar. The ISM Manufacturing Prices for October also elevated to 65.6 against the anticipated 60.5 and supported the U.S. dollar.

On Monday, the positive data from the U.S. made the U.S. dollar even stronger and supported the downside movement of the EUR/USD pair.

Furthermore, the U.S. dollar was set to lose its bullishness in the days ahead as markets were keenly waiting for the U.S. presidential elections’ results. Although the uncertainty persists in the market regarding the election’s outcome, this is the critical time to enter or place any position in the market. This is the reason behind the consolidated movement of the EUR/USD pair on Monday.

Furthermore, both the U.S. election candidates, Biden and Trump, have said that they would deliver a big stimulus package after the election. So, it means the next round of stimulus packages will be delivered regardless of the winner. These hopes kept weighing in the U.S. dollar and capped further losses in EUR/USD pair.

On the other hand, the renewed lockdown restrictions in France, Germany, Italy, and Belgian to curb the effect of coronavirus pandemic raised the concerns for Eurozone economic recovery and kept weighing on single currency that kept the EUR/USD pair on the downside.

Daily Technical Levels

Support Resistance

1.1637     1.1651

1.1631     1.1659

1.1623     1.1665

Pivot point: 1.1645

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29180 after placing a high of 1.29426 and a low of 1.28539. The British Pound started to decline against the U.S. dollar at the starting day of the week as the hopes raised for further monetary easing by the Bank of England this week following the second lockdown in England.

Over the weekend, the U.K. announced that it would enter a second national lockdown for a month to control the rise in coronavirus infections. On Monday, the coronavirus cases fell to 18,950 in comparison to 10,900 cases a week ago. The expectations for further easing came on board after the Britain government made this announcement on the weekend.

The new lockdown measures in the U.K. demand the people stay at home unless there is an essential purpose like education, medical reason, or shopping for groceries. However, economists have warned that country would enter a double-dip recession if it enters another lockdown as it will dent the economic growth in the final quarter of the year. These concerns kept the risk sentiment under pressure and weighed on British Pound that ultimately added the GBP/USD pair’s losses.

On the data front, at14:30 GMT, the Final Manufacturing PMI from Great Britain was raised to 53.7against the expected 53.3 and supported British Pound and capped further losses in GBP/USD pair. From the U.S. side, at 19:45 GMT, the Final Manufacturing PMI for October came in line with the anticipations of 53.4. At 20:00 GMT, the ISM Manufacturing PMI for October raised to 59.3 from the forecasted 55.6 and supported the U.S. dollar. The Construction Spending for September plunged to 0.3% from the forecasted 1.0% and weighed on the U.S. dollar. The ISM Manufacturing Prices for October also rose to 65.6 against the estimated 60.5 and supported the U.S. dollar.

The positive PMI data from the U.S. gave strength to the U.S. dollar and added further pressure on GBP/USD pair. On the Central Bank front, the BOE will have its monetary policy meeting on Thursday, and the hopes are that it will refrain from announcing negative rates, and the bank could also introduce another easing for supporting the economy.

On the Brexit front, the Brexit-talks continue in Brussels as the U.K. and the E.U. were working to avoid a no-deal Brexit. However, no fresh headlines were seen regarding this matter on Monday that kept the currency pair under the mercy of a strong U.S. dollar across the board.

Daily Technical Levels

Support Resistance

1.2913     1.2941

1.2898     1.2954

1.2884     1.2969

Pivot point; 1.2926

GBP/USD– Trading Tip

The GBP/USD is trading sharply bearish to trade over the double bottom support area of 1.2910 level. On the 2 hour timeframe, the GBP/USD pair has formed a downward channel, and bearish trend continuation can lead the pair further lower towards the next support area of 1.2830 level. However, to see that kind of selling, the Cable needs to violate the immediate support area of 1.2910. The MACD and 50 EMA support selling; therefore, we should look for a selling trade below the 1.2910 level today. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.749 after placing a high of 104.947 and a low of 104.514. The USD/JPY pair rose and posted gains for the third consecutive session on Monday amid the broad-based U.S. dollar strength. The U.S. dollar pushed higher in the early European session on Monday as European nations imposed more lockdowns on the back of an incessant rise in coronavirus cases. The uncertainty surrounding the upcoming U.S. elections also weighed on market sentiment and kept the USD/JPY pair higher.

The U.K. joined Germany and France over the weekend and re-introduced partial lockdowns to curb the coronavirus’s spread. Europe crossed the 10 million total cases of coronavirus infections and supported the safe-haven appeal that added further strength to the U.S. dollar.

The Bank of England will hold its monetary policy meeting on Thursday, and investors believe that the bank will increase the asset purchases by 150-200 billion British Pounds. These hopes forced the investors to stick with the U.S. currency in these uncertain times, but the ranges were tight as the markets were under pressure ahead of Tuesday’s U.S. presidential election.

The U.S. dollar was also strong because of the rising hopes for the victory of Joe Biden in the upcoming election as he has maintained a healthy lead over his competitor Donald Trump in national polls over the weekend before elections. Furthermore, some of the gains in the USD/JPY pair were lost in the late trading session as the traders were also waiting for the upcoming Federal Reserve monetary policy meeting on Thursday.

On the data front, at 05:30 GMT, the Final Manufacturing PMI from Japan for October raised to 48.7 from the forecasted 48.0 and supported the Japanese Yen that capped further upside in USD/JPY pair. From the U.S. side, at 19:45 GMT, the Final Manufacturing PMI from the U.S. for October remained flat at 53.4. At 20:00 GMT, the ISM Manufacturing PMI from the U.S. advanced to 59.3 from the estimated 55.6 in October and supported the U.S. dollar. The Construction Spending for September fell to 0.3% from the predicted 1.0% and weighed on the U.S. dollar. The ISM Manufacturing Prices for October also raised to 65.6 against the projected 60.5 and supported the U.S. dollar. The U.S. dollar was further supported by the positive results from the macroeconomic data, and it helped the USD/JPY pair to post gains on Monday.

Daily Technical Levels

Support Resistance

104.51     104.66

104.45     104.75

104.35     104.81

Pivot point: 104.60

USD/JPY – Trading Tips

The USD/JPY is trading slightly bullish at the 104.745 level, having crossed over the immediate resistance area of the 104.600 mark. On the 2 hour timeframe, the USD/JPY has violated the downward trendline at 104.550 level, and now the same level is likely to support the USD/JPY pair. The closing of candles over 104.650 level is supporting strong odds of bullish trend continuation until 105.049 level. Further bullish trend continuation can also lead the USD/JPY pair towards the 105.800 level. Good luck! 

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Forex Market Analysis

Daily F.X. Analysis, November 02 – Top Trade Setups In Forex – Series of Manufacturing PMI Ahead! 

On the news front, eyes will remain on the Manufacturing PMI and Services PMI figures from the Eurozone, the U.K., and the United States. Almost all economic figures are expected to perform better than previous months, perhaps due to the lift of lockdown. Price action will depend upon any surprise changes in the PMI figures.

Economic Events to Watch Today  

 


 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.16445 after placing a high of 1.17041 and a low of 1.16398. The EUR/USD pair extended its losses for the 5th consecutive day on Friday and remained bearish throughout the day.

The main driver behind the steepest fall in Euro currency this week was the market concerns about the rising number of coronavirus infections in Europe and the effects of the social distancing measures to curb them. 

The latest lockdown restrictions introduced by France and Germany and the tighter restrictions applied in Italy and Spain raised alarms about their impact on the fragile economic recovery and weighed on the single currency Euro that ultimately added pressure on EUR/USD pair. Furthermore, the European Central Bank hinted to unleash new stimulus measures in December to counteract the pandemic’s negative impact and weighed on the Euro currency that added further losses in EUR/USD pair on Friday.

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

At 13:00 GMT, the Spanish Flash GDP for the quarter surged to 16.7% after placing a high of 13.5% and supported Euro. The Italian Monthly Unemployment Rate declined to 9.6% from the forecasted 10.1% and weighed on Euro. At 14:00 GMT, German Prelim GDP for the quarter raised to 8.2% from the forecasted 7.3% and supported Euro. The Italian Prelim GDP for the quarter also raised to 16.1% from the forecasted 11.1% and supported Euro. At 14:58 GMT, the Italian Prelim CPI for October remained flat with the expectations of 0.2%.

At 15:00 GMT, the CPI Flash Estimate for the year remained flat at -0.3%. The Core CPI Flash Estimate for the year also came in line as expected, 0.2%. The Prelim Flash GDP for the quarter raised to 12.7% from the forecasted 9.5% and supported Euro. The Unemployment Rate from the whole bloc raised to 8.3% from the forecasted 8.2% and weighed on Euro.

After the release of economic data, the single currency Euro came under fresh pressure amid the rising fears of investors’ that strong quarterly economic growth in Germany, which raised to 8.2% in the third quarter, will be temporary as the virus spread in the region has picked up the pace. This added further pressure on EUR/USD pair on Friday.

From the U.S. side, at 17:30 GMT, the Core PCE Price Index for September came in line with the anticipations of 0.2%. The Personal Spending for September rose to 1.4% against the projected 1.0% and supported the U.S. dollar and added pressure on EUR/USD pair. The Employment Cost Index for the quarter came in line with the expectations of 0.5%. The Personal Income for September also surged to 0.9% from the estimated 0.3% and supported the U.S. dollar and add losses in EUR/USD pair.

 At 18:45 GMT, the Chicago PMI for October upraised to 61.1 against the predictable 58.2 and supported the U.S. dollar. At 19:00 GMT, the Revised UoM Consumer Sentiment for October also elevated to 81.8 against the estimated 81.2 and supported the U.S. dollar that supported the losses on EUR/USD pair on Friday. The Revised UoM Inflation Expectations for October were reported as 2.6% compared to September’s 2.7%.

Daily Technical Levels

Support Resistance

1.1798     1.1789

1.1672     1.1834

1.1626     1.1870

Pivot point: 1.1753

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29464 after placing a high of 1.29879 and a low of 1.28989. After placing losses for two consecutive days, the GBP/USD pair raised on Friday and posted gains. The GBP/USD pair rose on Friday despite the strength of the U.S. dollar, improved risk-averse market sentiment, and the rising number of coronavirus cases in Great Britain. The rising number of coronavirus cases in the U.K. showed that the imposed restrictions might be insufficient, and the country should follow the steps of Europe and France.

On the U.S. Presidential election front, the polls after the presidential debate showed that former vice president Joe Biden was leading over President Donald Trump. The chances for a blue wave in the U.S. gave pressure on local currency and supported the gains of the GBP/USD pair on Friday. On the data front, at 11:52 GMT, the Nationwide House Price Index for October raised to 0.8% from the forecasted 0.4% and supported British Pound that added further gains in GBP/USD pair.

From the U.S. side, at 17:30 GMT, the Core PCE Price Index for September came as anticipated by 0.2%. The Personal Spending for September surged to 1.4% against the anticipated 1.0% and supported the U.S. dollar. The Employment Cost Index for the quarter came as expected of 0.5%. The Personal Income for September also raised to 0.9% from the projected 0.3% and supported the U.S. dollar.

At 18:45 GMT, the Chicago PMI for October surged to 61.1 against the anticipated 58.2 and supported the U.S. dollar. At 19:00 GMT, the Revised UoM Consumer Sentiment for October also rose to 81.8 against the forecasted 81.2 and supported the U.S. dollar. The Revised UoM Inflation Expectations for October came as 2.6% in comparison to September’s 2.7%. Despite the better than expected macroeconomic figures from the U.S., the U.S. dollar remained lower ahead of upcoming elections and weighed on GBP/USD pair on Friday.

Furthermore, the Brexit developments also helped the GBP/USD pair to stay higher in such circumstances this week. The Chief EU Negotiator Michel Barnier extended his stay in London to discuss the Brexit deal with his U.K. counterpart. The fact that he has delayed his stay also gave some hope that progress has been made in Brexit proves and supported GBP/USD pair.

The reports also suggested that both sides have almost reached an agreement over the state aid issue, and the only sticking point in the UK-EU deal left was the fisheries. These Brexit developments in depressing circumstances supported the GBP/USD pair on Friday.

Daily Technical Levels

Support Resistance

1.2909     1.3057

1.2839     1.3135

1.2762     1.3205

Pivot point: 1.2987

GBP/USD– Trading Tip

The GBP/USD is trading sharply bearish to trade over the double bottom support area of 1.2910 level. On the 2 hour timeframe, the GBP/USD pair has formed a downward channel, and bearish trend continuation can lead the pair further lower towards the next support area of 1.2830 level. However, to see that kind of selling, the Cable needs to violate the immediate support area of 1.2910. The MACD and 50 EMA support selling; therefore, we should look for a selling trade below the 1.2910 level today. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.673 after placing a high of 104.740and a low of 104.123. The USD/JPY pair extended its previous daily gains and rose for the second consecutive session on Friday.

The U.S. dollar was moving back and forth on Friday within the previous ranges, however, was unable to find a significant recovery. The second round of lockdown in Europe and the cautious market mood ahead of the U.S. Presidential elections kept the pair higher as the risk-averse market sentiment was gaining traction.

On the macroeconomic front, at 04:30 GMT, the Tokyo Core CPI for the year remained flat at -0.5%. The Unemployment Rate from Japan declined to 3.0% in September from the forecasted 3.1% and supported the Japanese Yen. At 04:50 GMT, the Prelim Industrial Production for September also raised to 4.0% from the expected 3.0% and supported the Japanese Yen. At 10:00 GMT, the Housing Starts from Japan for September dropped to -9.9% from the forecasted -8.6% and weighed on the Japanese Yen and supported the upside momentum in the USD/JPY pair.

From the U.S. side, at 17:30 GMT, the Core PCE Price Index for September remained flat at 0.2%. The Personal Spending for September advanced to 1.4% from the expected 1.0% and supported the U.S. dollar. The Employment Cost Index for the quarter came in line with the expectations of 0.5%. The Personal Income for September raised to 0.9% from the forecasted 0.3% and supported the U.S. dollar.

 At 18:45 GMT, the Chicago PMI for October surged to 61.1 against the expectable 58.2 and supported the U.S. dollar. At 19:00 GMT, the Revised UoM Consumer Sentiment for October also advanced to 81.8 against the anticipated 81.2 and helped the U.S. dollar. The Revised UoM Inflation Expectations for October came as 2.6% in comparison to September’s 2.7%.

The stronger than expected data from the U.S. side also supported the USD/JPY pair’s upside movement on Friday. Meanwhile, the market mood was inclined towards the U.S. dollar demand in safe-haven as the growing number of infections in Europe forced the governments to impose lockdowns, which raised concerns over the global economic recovery when the economies were already struggling.

Furthermore, on Friday, the Federal Reserve declared that it will amend its main street lending program to support better small businesses that were still fighting the crisis of coronavirus pandemic. The central bank revealed that it would reduce the minimum amount that can be borrowed by the small & medium-sized businesses from $250,000 to $100,000. The Federal Reserve said that the change in the main-street lending program had been made to support pandemic-hit small companies. These announcements from the Fed weighed on the U.S. dollar and kept the gains in USD.JPY pair limited on Friday.

Daily Technical Levels

Support Resistance

104.07     104.53

103.86     104.78

103.62     104.99

Pivot point: 104.32

USD/JPY – Trading Tips

The USD/JPY is trading slightly bullish at the 104.745 level, having crossed over the immediate resistance area of the 104.600 mark. On the 2 hour timeframe, the USD/JPY has violated the downward trendline at 104.550 level, and now the same level is likely to support the USD/JPY pair. The closing of candles over 104.650 level is supporting strong odds of bullish trend continuation until 105.049 level. Further bullish trend continuation can also lead the USD/JPY pair towards the 105.800 level, but, I’m afraid, traders will wait for the U.S. Elections and the U.S. NFP later this Friday. Good luck! 

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Forex Signals

AUD/USD Choppy Session Continues – Brace for Breakout Signal! 

The AUD/USD pair was closed at 0.70309 after placing a high of 0.70757 and a low of 0.70021. The AUD/USD pair extended its previous daily losses on Thursday and dropped further below towards its lowest level since May 19th. The decline in the AUD/USD pair was understandable ahead of the next week’s massive risk events. The Reserve Bank of Australia and the US election on the same day. The currency pair started rushing towards the crucial support at the 0.700 handle due to the strength of the US dollar.

The US dollar was strong across the board ahead of the US Presidential election on November 3rd due to many factors including the latest uncertainty over the next round of US stimulus measures. The House Speaker Nancy Pelosi has weighed on market hopes for the successive CARES package by saying that the Trump administration would have to answer her on many critical issues before getting a consensus on the US stimulus package.

The investors that were waiting for elections to come next week and after that a stimulus measure will be passes, were disappointed after these comments and their hopes vanished that the same stalemate will continue even after the elections. These concerns weighed on market sentiment and dragged the AUD/USD pair on the downside.

On the data front, at 05:30 GMT, the Import Prices for the quarter dropped to -3.5% from the projected -2.1% and weighed on the Australian dollar and added in the losses of AUD/USD pair. The NAB Quarterly Business Confidence came in as -10 against the previous -15 in the third quarter.

From the US side, at 17:30 GMT, the Advanced GDP for the quarter rose to 33.1% from the forecasted 32.0% and supported the US dollar. The Unemployment Claims for the previous week fell to 751K from the projected 773K and supported the US dollar. At 17:32 GMT, the Advance GDP Price Index for the quarter surged to 3.6% from the forecasted 2.9% and supported the US dollar. At 19:00 GMT, the Pending Home Sales for September was chopped down to -2.2% from the anticipated 3.1% and weighed on the US dollar.

Most of the macroeconomic data from the US like GDP and Unemployment Claims came in better than expected and supported the US dollar that ultimately weighed on AUD/USD pair on Thursday.

Daily Technical levels

Support Resistance

0.7002 0.7122

0.6959 0.7201

0.6881 0.7243

Pivot point: 0.7080

The AUD/USD pair is trading with a bearish bias below 0.7047 level, the resistance level that’s extended downward trendline support area of 0.7047 level. Continuation of a selling trend in the AUD/USD pair may lead the AUD/USD price towards the support area of 0.7005, and below this, the AUD/USD pair may find next support around 0.6967. I will consider opening a selling trade below 0.7069 area today. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, October 29 – Top Trade Setups In Forex – Eyes on ECB Policy Rate! 

The focus will remain on the U.S. Advance GDP figures. GDP data expected to perform better than before as the data represents the economic activity of the lockdown period. Besides this, the major focus will remain on the ECB Monetary policy decision, where the ECB is expected to keep the interest rate unchanged. However, the increased number of  Covid-19 cases may trigger a dovish sentiment on the European official bank rate, and it may place bearish pressure on the single currency Euro. 

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17460 after placing a high of 1.17879 and a low of 1.17176. The EUR/USD pair dropped to its one week lowest level and remained bearish throughout the day. The Euro fell against the U.S. dollar on Wednesday ahead of the European Central Bank meeting amid the rising fears that the Eurozone’s economic recovery will be hard as Germany and France introduced fresh lockdown measures to control the spread of coronavirus infections.

A four-week lockdown was introduced by German Chancellor Angela Merkel on Wednesday for the country to control the spread of the virus. The partial lockdown will start from Monday, and under the restrictions, the hospital sector will likely ease as restaurants, bars, gyms, cinemas will be closed while schools, daycare centers, and kindergartens will remain open.

France that is already under curfew, will announce a nationwide lockdown on Friday. The President of France Emmanuel Macron has said that the measures they had taken to control the spread did not work out and were insufficient to counter the second wave of coronavirus affecting all of Europe.

Both Germany and France have seen a rise in coronavirus cases, with France expected to experience 100,000 new cases per day in the coming days. These fears that the lockdown measures will greatly impact the emerging European economic recovery weighed heavily on a single currency on Wednesday.

At 12:00 GMT, German Import Prices raised in September to 0.3% from the forecasted -0.3% and supported Euro currency on the data front. At 17:30 GMT, the Goods Trade Balance for September came in as -79.4B against the projected -84.8B and supported the U.S. dollar that weighed on EUR/USD prices. The Prelim Wholesale Inventories from the U.S. in September were reported as -0.1% against the expected 0.4% and supported the U.S. dollar added in the losses of EUR/USD pair on Wednesday.

On the U.S. dollar front, the United States also saw records high numbers of coronavirus cases; however, the U.S. dollar remained strong across the board. It seems like investors chose to invest in the greenback in these uncertain times due to its safe-haven status. The strong U.S. dollar weighed further on EUR.USD pair on Wednesday, and the prices continued moving in downside momentum.

Daily Technical Levels

Support Resistance

1.1779     1.1825

1.1762     1.1856

1.1732     1.1872

Pivot Point: 1.1809

EUR/USD– Trading Tip

The EUR/USD traded with a bearish bias, having dropped to the support area of 1.1745. Above this, the pair has strong odds of taking a bullish turn until the 1.1790 area. Continuation of an upward trend may lead the EUR/USD price towards 1.1790, and bullish crossover of this area can lead the pair towards the 1.1820 level. Conversely, a bearish crossover of 1.1745 support level can extend selling until the 1.1694 area. 


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29877 after placing a high of 1.30636 and a low of 1.29163. The GBP/USD pair dropped and posted losses on Wednesday. The GBP/USD pair dropped to its seven days lowest level on Wednesday amid broad-based U.S. dollar strength and the rising number of coronavirus cases in the U.K. The Brexit impasse, along with the U.S. elections uncertainty, also weighed on GBP/USD pair on Wednesday.

The U.S. dollar was strong across the board on Wednesday as the global coronavirus spread raised the greenback’s safe-haven allure. The British Pound lost as much as 1% against the U.S. dollar on Wednesday as investors withdraw due to decreased hopes for global economic recovery and increased risk-aversion market sentiment.

The uncertainties surrounding the U.S. elections were already weighing on the market sentiment, and the resurgence of coronavirus cases in Europe and the United States emerged that escalated the concerns. In the past week, the rate of deaths in Europe rose by almost 40%, and it challenged the narrative that the virus was relatively harmless that had encouraged the easing of lockdown measures for the sake of local economies.

Both Germany and France announced new lockdown measures to control coronavirus spread, and the U.K. was also expected to impose Tier-3 restrictions. These fears weighed heavily on the local currency British Pound that ultimately dragged the GBP/USD pair’s prices on Wednesday to its one-week lowest level.

On the data front, t 05:01 GMT, BRC Shop Price Index for October came in as -1.2% compared to -1.6%. Whereas, from the U.S. side, at 17:30 GMT, the Goods Trade Balance for September was reported as -79.4B against the expected -84.8B and supported the U.S. dollar that weighed on GBP/USD prices. The Prelim Wholesale Inventories from the U.S. in September came in as -0.1% against the anticipated 0.4% and supported the U.S. dollar that weighed on GBP/USD pair on Wednesday.

On the Brexit front, Britain and the European Union have just over two months to reach a trade agreement before the status-quo transition period ends on December 31. The E.U.’s chief negotiator, Michel Barnier, is in London for negotiations, and it is believed that progress has been made over some sticking points.

The sentiment has raised hopes that this time a deal will be reached between the U.K. and the E.U. by early November. According to Bloomberg, both sides have begun work on the text of the agreement on the level competitive playing field and were close to finalizing a joint document covering state aid.

These developments regarding Brexit-deal gave some ease to the market sentiment and capped further losses in the GBP/USD pair on Wednesday.

Furthermore, the Bank of England has shown willingness to go for negative rates that had been partially priced in the market and had kept the British Pound under pressure. Therefore, any such action by the bank would not come as a surprise in the upcoming meeting, and it means that a negative interest rate effect could be of secondary importance for GBP traders than a shock of Brexit in the coming days.

Daily Technical Levels

Support Resistance

1.3001     1.3081

1.2961     1.3121

1.2921     1.3161

Pivot Point: 1.3041

GBP/USD– Trading Tip

The GBP/USD has violated the symmetric triangle pattern at the 1.3017 area, and closing of candles below the 1.3017 level has driven strong selling until the 1.2915 support area. On the higher side, the Cable my lead GBP/USD price towards 1.3046 level. For now, the GBP/USD pair may find an immediate resistance at 1.3046 are, and below this, selling can be captured until 1.2980 and 1.2919 level.  


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.307 after placing a high of 104.554 and a low of 104.111. The USD/JPY pair remained bearish and placed losses on Wednesday. The USD/JPY pair has posted slight losses on Wednesday despite the broad-based U.S. dollar strength. The Japanese Yen has gained about 1.2% throughout the last three weeks in October and has weighed on the USD/JPY pair. The USD/JPY pair dropped on Wednesday to its lowest level since September 21.

The U.S. dollar was strong on Wednesday as its safe-haven status got attention after European nations started re-imposing lockdown measures to control the virus’s spread. However, the U.S. dollar’s strength could not reverse the USD/JPY pair’s movement on Wednesday as traders were focused more on the Bank of Japan’s decision in its upcoming monetary policy meeting on Thursday.

Bank of Japan is up to hold its monetary policy meeting on Thursday, and investors were pricing the potential moves by it ahead of the meeting. The Bank of Japan is expected to keep its rates unchanged at -10bps while maintaining a 10-year JGB yield target at 0.0%. The Bank of Japan has extended a deadline for two virus linked funding programs and enlarged asset purchases. As mentioned by the quarterly assessment report, the central bank has downgraded this fiscal year’s economic and inflation outlooks.

As the outlook reviews have already been priced in the market, any hint over additional monetary easing through Q.E. in December on Thursday could have a major impact on the Japanese yen and ultimately on the USD/JPY pair. Furthermore, the coronavirus cases in the United States were rising day by day and weighed on local currency as the chances for a fresh lockdown increased with the increased number of COVID-19 infections. Over the last seven days, the U.S. reported about half a million new coronavirus cases, and it has raised both economic and health-related concerns that have weighed on the local currency U.S. dollar. The USD/JPY pair also followed these rising concerns and kept moving in the downward direction on Wednesday.

On the data front, from the U.S. side, at 17:30 GMT, the Goods Trade Balance for September came in as -79.4B against the anticipated -84.8B and supported the U.S. dollar. The Prelim Wholesale Inventories from the U.S. in September came in as -0.1% against the projected 0.4% and supported the U.S. dollar. The strong U.S. dollar failed to reverse the USD/JPY pair’s negative momentum on Wednesday, and the pair kept falling towards its multi-week lowest level.

Daily Technical Levels

Support Resistance

104.22     104.73

104.05     105.07

103.70     105.25

Pivot point: 104.56

USD/JPY – Trading Tips

The bearish bias in the USD/JPY continues to extend the bearish bias; however, it’s trading within a choppy trading range now. The choppy range may provide resistance at 104.505 to 104.200 area. Violation of this range can trigger further selling until the 103.900 level. The MACD and RSI support selling bias today; therefore, we will be looking to enter a selling trade below 104.24 today as a violation of this level has high odds of leading the USD/JPY pair further lower towards the 103.900 level. Good luck! 

Categories
Forex Signals

USD/JPY Takes Dip Amid Downward Channel – Brace for Selling! 

During the Europen session, the USD/JPY continues trading lower amid a downward channel at 102.298 level. The USD/JPY pair moved in a bearish direction and posted big losses on Tuesday. The USD/JPY pair was down on Tuesday amid the broad-based U.S. dollar weakness along with the rising risk-averse market sentiment on the back of fresh tensions between the U.S. and China. The safe-haven appeal was also supported by the rising number of coronavirus cases and lockdowns that drove the stock market on the downside and weighed on the USD/JPY pair as well.

The U.S. Dollar Index that measures the value of the greenback against the basket of six currencies dropped by 0.3% to 92.8 level on Tuesday that weighed on the U.S. dollar and dragged the USD/JPY pair prices.

On the coronavirus front, the United States, Russia, France, Italy, Netherland, Spain, and many other nations across the globe set a new record for the number of daily coronavirus cases. The U.S. reported more than 74,300 new cases in a single day, France reported more than 52,000 daily cases over the weekend. The global record for the infections was recorded as 43.4 million on Tuesday by the Johns Hopkins University.

The rising number of coronavirus cases urged governments to re-impose lockdown measures to curb the virus’s spread. These lockdowns in a situation where economies were still under recovery phase from the previous lockdown effects raised a high appeal for the safe-haven market sentiment in the market. The risk-averse sentiment supported the safe-haven Japanese Yen that ultimately weighed on the USD/JPY pair on Tuesday.

Meanwhile, on the data front, at 09:59 GMT, the BOJ Core CPI for the year dropped to -0.1% from the forecasted 0.0% and weighed on the Japanese Yen that failed to reverse the negative movement of the USD/JPY pair. At 18:00 GMT, August’s Housing Price Index rose to 1.5% from the anticipated 0.7% and supported the U.S. dollar. The S&P/CS Composite-20 HPI for the year also advanced to 5.2% from the projected 4.2% and supported the U.S. dollar. At 18:59 GMT, the Richmond Manufacturing Index for October raised to 29 against the expected 18 and supported the U.S. dollar but failed to impress investors; thus, the USD/JPY pair continued moving in the downward momentum on Tuesday.

However, at 19:00 GMT, the C.B. Consumer Confidence for October was dropped to 100.9 from the anticipated 102.1 and weighed on the U.S. dollar that added further pressure on the USD/JPY pair. The U.S. dollar failed to cheer the positive macroeconomic data on Tuesday because of the stalled talks for the next round of the U.S. stimulus package. The stalemate between the White House and the House of Representative Speaker Nancy Pelosi over the U.S. stimulus aid package’s size led to delayed talks till November 3rd election results and weighed on the U.S. dollar.

The USD/JPY continues to extend its bearish momentum as the pair trades at the 104.298 level. On the 4 hour timeframe, the USD/JPY has formed a downward channel that’s driving bearish movement in the market, and it may support the pair around 104.300 and 104.007 area. Conversely, the continuation of an upward movement is likely to drive the buying trend until the 104.778 level. Check out the sell setup below…


Categories
Forex Market Analysis

Daily F.X. Analysis, October 28 – Top Trade Setups In Forex – Bank of Canada Policy! 

On the news front, the Bank of Canada Overnight Rate rate and Rate Statement will be in focus, and it may drive some price action in Canadian pairs. Elsewhere, we don’t have any major event that can drive sharp movements in the U.S. dollar related pairs. Let’s focus on technical levels.

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD closed at 1.17872 after placing a high of 1.18385 and a low of 1.17821. The EUR/USD pair moved lower and posted losses on Tuesday to extend the previous bearish trend. The EUR/USD pair extended its losses on Tuesday and fell for 2nd consecutive day despite the broad-based U.S. dollar weakness. The decline in the EUR/USD pair was due to the rising number of coronavirus cases and the increased numbers of lockdown in European nations to curb the COVID-19 crisis’s effects.

The EUR/USD pair moved in upward momentum during the first half of Tuesday and recovered most of its previous daily losses on the back of broad-based U.S. dollar weakness. The U.S. Dollar Index was down to 92.8 level by 0.3% on Tuesday as the uncertainty over the next round of U.S. stimulus package and the upcoming U.S. Presidential election weighed on the greenback.

The risk-averse market sentiment emerged in the market due to an increased number of coronavirus cases worldwide, especially in the European nations. The United States reported more than 74,300 new coronavirus cases on Monday that pushed the country’s daily average over the past week above 71,000. Meanwhile, in Europe, France prepared for a fresh lockdown as new daily confirmed coronavirus cases hit the highest ever at above 52,000 on a single day.

Italy and the Netherlands also reported a new record high of cases over the weekend. Spain declared a national emergency and imposed a night-time curfew for six months. All these reports from across the globe weighed on risk sentiment and dragged the riskier asset like EUR/USD pair on the downside. Meanwhile, the risk sentiment was further affected by the latest news from one of the vaccine developers, Pfizer, that said that getting early results by October for coronavirus vaccine shots would be nearly impossible. These comments added further to the downside momentum of EUR.USD pair on Tuesday.

On the data front, at 13:00 GMT, the Spanish Unemployment Rate for September raised to 16.3% against the forecasted 16.0% and weighed on the single currency Euro that added further to the losses of EUR/USD pair. At 14:00 GMT, the M3 Money Supply for the year was advanced to 10.4% from the forecasted 9.6% and supported Euro currency. The Private Loans for the year from Eurozone remained flat at 3.1%.

At 18:00 GMT, August’s Housing Price Index raised to 1.5% from the projected 0.7% and supported the U.S. dollar. The S&P/CS Composite-20 HPI for the year also elevated to 5.2% from the projected 4.2% and supported the U.S. dollar. At 18:59 GMT, the Richmond Manufacturing Index for October surged to 29 from the anticipated 18 and supported the U.S. dollar added in the additional losses in EUR/USD pair on Tuesday.

However, at 19:00 GMT, the C.B. Consumer Confidence for October dropped to 100.9 from the projected 102.1 and weighed on the U.S. dollar that capped further losses in EUR/USD prices on Tuesday. Furthermore, the risk sentiment was deteriorated by the latest tensions between the U.S. & China over the potential sales of American made missiles to Taiwan. This raised the market’s safe-haven appeal and weighed on the riskier EUR/USD pair for the day.

Daily Technical Levels

Support Resistance

1.1787     1.1845

1.1766     1.1882

1.1729     1.1904

Pivot point: 1.1824

EUR/USD– Trading Tip

The EUR/USD traded with a bearish bias, falling from the 1.1800 level to test the support area of the 1.1770 mark. Violation of the 1.1770 level can drive further selling until the 1.1733 support level, which is extended by an upward trendline. However, the MACD and RSI are supporting selling bias; therefore, the EUR/USD may exhibit a selling trend below an intraday pivot point level of 1.1824 level. Buying can be seen over the 1.1700 level today. 

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.30414 after placing a high of 1.30793 and a low of 1.30007. The GBP/USD pair reversed on Tuesday and started moving in a bullish track. The GBP/USD pair rose and broke it’s 4 days bearish streak on Tuesday amid the broad-based U.S. dollar weakness and the rising optimism surrounding the Brexit process. The U.S. dollar was weak across the board amid the fallen U.S. yields and rising concerns over the U.S. stimulus package and upcoming U.S. election.

The U.S. dollar also failed to cheer the positive macroeconomic figures from the economic docket on Tuesday as investors’ focus shifted towards other developments. The Wall Street stocks were mixed during the day as the resurgence in COVID-19 cases was creating concerns among the market participants. The market’s risk sentiment was also affected by the latest dispute between the U.S. & China, along with the increased number of coronavirus cases and the slowdown of economies throughout the globe. The deteriorated risk sentiment weighed heavily on the risk perceived British Pound and GBP/USD pair gains remained limited for the day.

The British investors were more focused on the Brexit process’s optimism as the Chief EU negotiator Michel Barnier extended his stay in London for ongoing talks. This raised the hopes that both parties will soon reach a consensus over the Brexit-deal key points as the negotiations were extended. The silence around the talks matter was seen as a positive sign between the investors, and they started buying British Pound against the U.S. dollar.

Meanwhile, the PM Boris Johnson has also said that he was not waiting for the U.S. elections to deal with the E.U. He added that resolving the issues of state aid and fisheries was more critical at the time, and the markets started moving on the positive side for British Pound as U.K. was eager to strike a deal with the E.U.

On the data front, at 16:00 GMT, the CBI Realized Sales for October came in as -23 against the expectations of -1 and weighed on British Pound and capped further gains in GBP/USD pair. At 18:00 GMT, the Housing Price Index for August surged to 1.5% from the expectations of 0.7% and supported the U.S. dollar. The S&P/CS Composite-20 HPI for the year also surged to 5.2% from the forecasted 4.2% and helped the U.S. dollar. At 18:59 GMT, the Richmond Manufacturing Index for October raised to 29 against the expectations of 18 and supported the U.S. dollar that limited further gains in GBP/USD prices.

However, at 19:00 GMT, the C.B. Consumer Confidence for October fell to 100.9 from the expected 102.1 and weighed on the U.S. dollar that pushed the GBP/USD pair further on the upside. As for the U.S. Presidential elections, the uncertainty surrounding the question that who will win the election kept the U.S. dollar weak across the board on Tuesday. Some polls were suggesting a blue wave while others were in favor of re-electing president Donald Trump. Along with the stalled talks for the next round of the U.S. stimulus package before November 3, these uncertainties weighed on the U.S. dollar and supported the GBP/USD pair’s gains on Tuesday.

Daily Technical Levels

Support Resistance

1.2985     1.3067

1.2947     1.3113

1.2902     1.3150

Pivot point: 1.3030

GBP/USD– Trading Tip

The GBP/USD is trading sideways, holding within a symmetric triangle pattern extending neutral with a narrow trading range of 1.3071 – 1.3007 level. Violation of 1.3007 level can open additional room for selling until the 1.2965 area, which extends support due to an upward trendline on the 4-hour timeframe. The MACD and RSI are in support of selling bias today. Consider opening sell trades below the 1.3075 level today. On the other hand, the violation of 1.3071 can drive upward movement until the 1.3165 level today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.475 after placing a high of 104.888 and a low of 104.386. The USD/JPY pair moved in a bearish direction and posted big losses on Tuesday. The USD/JPY pair was down on Tuesday amid the broad-based U.S. dollar weakness along with the rising risk-averse market sentiment on the back of fresh tensions between the U.S. and China. The safe-haven appeal was also supported by the rising number of coronavirus cases and lockdowns that drove the stock market on the downside and weighed on the USD/JPY pair as well.

The U.S. Dollar Index that measures the value of the greenback against the basket of six currencies dropped by 0.3% to 92.8 level on Tuesday that weighed on the U.S. dollar and dragged the USD/JPY pair prices.

On the coronavirus front, the United States, Russia, France, Italy, Netherland, Spain, and many other nations across the globe set a new record for the number of daily coronavirus cases. The U.S. reported more than 74,300 new cases in a single day, France reported more than 52,000 daily cases over the weekend. The global record for the infections was recorded as 43.4 million on Tuesday by the Johns Hopkins University.

The rising number of coronavirus cases also urged governments to re-impose lockdown measures to curb the virus’s spread. These lockdowns in a situation where economies were still under recovery phase from the previous lockdown effects raised a high appeal for the safe-haven market sentiment in the market. The risk-averse sentiment supported the safe-haven Japanese Yen that ultimately weighed on the USD/JPY pair on Tuesday.

Meanwhile, on the data front, at 09:59 GMT, the BOJ Core CPI for the year dropped to -0.1% from the forecasted 0.0% and weighed on the Japanese Yen that failed to reverse the negative movement of the USD/JPY pair. At 18:00 GMT, August’s Housing Price Index rose to 1.5% from the anticipated 0.7% and supported the U.S. dollar. The S&P/CS Composite-20 HPI for the year also advanced to 5.2% from the projected 4.2% and supported the U.S. dollar. At 18:59 GMT, the Richmond Manufacturing Index for October raised to 29 against the expected 18 and supported the U.S. dollar but failed to impress investors; thus, the USD/JPY pair continued moving in the downward momentum on Tuesday.

However, at 19:00 GMT, the C.B. Consumer Confidence for October was dropped to 100.9 from the anticipated 102.1 and weighed on the U.S. dollar that added further pressure on the USD/JPY pair. The U.S. dollar failed to cheer the positive macroeconomic data on Tuesday because of the stalled talks for the next round of the U.S. stimulus package. The stalemate between the White House and the House of Representative Speaker Nancy Pelosi over the U.S. stimulus aid package’s size led to delayed talks till November 3rd election results and weighed on the U.S. dollar.

Furthermore, the Biden victory bets were started to weigh on the U.S. dollar as the polls suggested a blue wave in the upcoming Presidential elections. The weak U.S. dollar on Tuesday caused the USD/JPY pair to move on the downside. Moreover, the U.S. and China tensions came on-board after a long pause on Tuesday when news suggested a potential $2.4 billion sale of U.S. anti-ship missiles to Taiwan. In response to this news, China slapped sanctions on U.S. companies over national security interests. These fresh tensions between the U.S. and China raised safe-haven appeal and supported the safe-haven Japanese Yen that ultimately added weight on the USD/JPY pair on Tuesday.

Daily Technical Levels

Support Resistance

104.18     105.35

103.68     106.00

103.02     106.51

Pivot point: 104.84

USD/JPY – Trading Tips

The USD/JPY continues to extend its bearish momentum as the pair trades at the 104.298 level. On the 4 hour timeframe, the USD/JPY has formed a downward channel that’s driving bearish movement in the market, and it may support the pair around 104.300 and 104.007 area. Conversely, the continuation of an upward movement is likely to drive the buying trend until the 104.778 level. The MACD and RSI are supporting selling bias today; therefore, we will be looking to enter a selling trade below 104.84 today. Good luck! 

Categories
Forex Signals

AUD/CAD Breaking Below Upward Channel – Is there a Sell Trade?

The USD/CAD extended its previous session bullish bias and hit the session high around above 0.9416 level. However, the bullish sentiment around the currency pair was being supported by a modest pickup in the ongoing drop in crude oil prices, which tend to undermine demand for the commodity-linked currency – the loonie. Hence, the broad-based U.S. dollar managed to gain some positive traction on the day amid growing market worries about surging coronavirus cases in Europe and the United States, which keeps the market trading sentiment under pressure and undermined the greenback. 

In addition to this, the long-lasting impasse over the next round of the U.S. fiscal stimulus measures added further burden on investors’ sentiment and benefitted the USD’s status as the global reserve currency. Across the pond, the reason for the currency pair bullish bias could also be attributed to the weaker crude oil prices, which undermined the demand for the commodity-linked currency the loonie and contributed to the currency pair gains. As of writing, the AUD/CAD currency pair is currently trading at 0.9396 and consolidating in the range between 0.9416 – 9330.

Despite the optimism over a potential treatment/vaccine for the highly infectious virus, the market risk sentiment remains depressive with Wall Street hugging the sellers and S&P 500 Futures flashing losses amid a combination of factors. Be it the worrisome headlines concerning Brexit or the tension between the US-China, not to forget the coronavirus issues, the market trading sentiment has been flashing red since the week started, which ultimately keeps the safe-haven assets supportive on the day. 

At the coronavirus front, the prevalent worries over the resurgence of the coronavirus pandemic raised fears of global economic recovery, which keeps the market trading sentiment under pressure. The coronavirus COVID-19 cases continue to climb in Europe, U.K., and the U.S. As per the latest report, the U.S. has witnessed its highest ever number of new COVID-19 cases over the weekend, while France is also reporting new case records and Spain announced a state of emergency. As in result, the imposition of stricter lockdown measures to stop the second wave of COVID-19 cases, along with receding hopes for a pre-election fiscal deal also weighed on market trading sentiment.

This, in turn, the broad-based U.S. dollar succeeded to extend its early-day gains and remained well bid on the day as investors turned to the safe-haven in the wake of risk-off market sentiment. However, the gains in the greenback could be temporary due to the worries that the economic recovery in the U.S. could be stopped because of the reappearance of coronavirus cases. Besides this, the gains in the U.S. dollar were further boosted by a lack of progress toward a U.S. stimulus package, which puts traders in a cautious mood. However, the gains in the U.S. dollar kept the currency pair higher. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies rose to 93.028.

Across the pond, the crude oil prices failed to stop its last week losing streak and remained depressed around below the $38.50 mark. However, the reason for the bearish bias around the crude oil prices could be attributed to the ever-increasing COVID-19 worries, which raised fears of renewed lockdown measures and depressed hopes for a swift recovery in the fuel demand. Across the pond, the anticipation of a rise in Libyan crude supply also played its major role in undermining crude oil. 


Entry Price – Sell 0.9389

Stop Loss – 0.9429

Take Profit – 0.9329

Risk to Reward – 1:1

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

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

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

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

 

Categories
Forex Signals

EUR/JPY Breaking Below Intra-day Support – Brace for Selling!


Entry Price – Sell 123.855

Stop Loss – 124.255

Take Profit – 123.455

Risk to Reward – 1:1

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

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

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

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

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

Categories
Forex Signals

USD/JPY Violates Bearish Flag – Buckle up for a Sell Signal! 

The USD/JPY pair is trading sharply bearish after violating the bearish flag at the 104.680 level. Below this level, we may have more selling trade opportunities. The USD/JPY pair traded with a positive note during the whole Thursday session after a goodish pickup in the U.S. dollar demand. The rebounded U.S. dollar helped currency pair USD/JPY to gain positive traction and move away from the six-week lowest level it touched on Wednesday.

The slow progress in the U.S. stimulus measure package attracted some buying in the greenback that dampened the hopes that financial aid will be delivered before elections. The statement by House of Representatives Speaker Nancy Pelosi that soon there will be pen to paper on the stimulus bill failed to impress investors, and the USD/JPY pair continued moving in the upward direction.

Pelosi even said that the stimulus package could be passed in the House before election day, but investors were somewhat unconvinced that the bill could pass through the Senate due to the strong opposition from Republicans over a bigger stimulus deal. This, in turn, weighed on risk sentiment and supported the Japanese Yen that ultimately capped further upside in the USD/JPY pair prices.

Apart from developments surrounding the U.S. fiscal stimulus, the USD bulls further took clues from the better than expected release of the U.S. initial jobless claims. The number of Americans filed for unemployment benefits declined to 787K during the previous week for the first time against the projected 860K and supported the U.S. dollar. The decline in unemployment claims means less need for a U.S. stimulus package and more strength for the U.S. dollar and USD/JPY pair.

On the data front, the C.B. Leading Index from the U.S. dropped to 0.7% against the expected 0.8% and weighed on the U.S. dollar. The Existing Home Sales advanced to 6.54M in comparison to projected 6.20M and supported the U.S. dollar. Another favorable economic data release gave strength to the U.S. dollar that pushed the USD/JPY pair even higher on grounds. Meanwhile, the rising number of coronavirus cases across the globe and fears for economic recovery due to lockdowns imposed to curb the spread of the virus raised the safe-haven appeal, supported the Japanese Yen, and weighed on the USD/JPY pair to limit its bullish move on Thursday.


The USD/JPY traded dramatically bearish to drop from 105.460 level to 104.349 level. Like other pairs, the USD/JPY has also entered the oversold zone, and now sellers seem to be exhausted. On the higher side, the USD/JPY pair has reversed some of the losses to trade at the 104.700 level. On the higher side, the pair may go after the 38.2% Fibonacci retracement level of 104.900 and 50% Fibo level of 105. Let’s consider taking a buying trade over 104.350 area today. 

Entry Price – Buy 104.593

Stop Loss – 104.993

Take Profit – 104.093

Risk to Reward – 1:1

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

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

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

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

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

Categories
Forex Market Analysis

Daily F.X. Analysis, October 23 – Top Trade Setups In Forex – European PMI In Highlights! 

The economic calendar is filled with medium impact economic events such as Unemployment Claims, C.B. Leading Index m/m, and Existing Home Sales from the United States on the news front. Besides, the Consumer Confidence from the Eurozone will also remain in the highlights today. The market may show some price action during the U.S. session on the release of U.S. Jobless Claims. 

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD closed at 1.18184 after placing a high of 1.18666 and a low of 1.18111. The EUR/USD pair was down and remained bearish on that day. As the market sentiment deteriorated and the U.S. dollar moved stronger across the board, the EUR/USD pair dropped on a session by 0.3% and remained one of the worst G10 performers on Thursday.

The common currency put an end to a four-day rally on Thursday as the hopes of the next round of U.S. stimulus deal faded away. 

The U.S. President Donald Trump crushed the risk appetite on Thursday after blaming Democrats for not compromising an acceptable agreement. This raised the U.S. dollar on board from its seven-week lowest level. The hopes for the next round of U.S. stimulus package were faded after Trump blamed Democrats that they were unwilling to compromise on the relief aid bill’s size. However, the talks were continuing, and it is uncertain whether a stimulus package is delivered before the Presidential elections or not.

The faded hopes dampened the risk sentiment and added strength to the U.S. dollar that ultimately added weight on the EUR/USD pair on Thursday. Furthermore, the rising number of coronavirus cases in Europe also weighed on the EUR/USD pair. In Europe, the daily number of infections reached record levels, with Spain becoming the first western country to report one million cases. These rising numbers of coronavirus cases from Europe also undermined the Euro currency’s confidence, ultimately added to the losses of the  EUR/USD pair.

On the data front, at 11:00 GMT, the German GfK Consumer Climate came in as -3.1 against the forecasted -2.9 and weighed on Euro currency that added in the losses of EUR/USD pair. At 18:52 GMT, the Consumer Confidence from Europe was also declined to -16 from the projected -15 and weighed on the single currency and added in the losses of EUR/USD pair. From the U.S. side, the Unemployment Claims from last week were dropped to 787K against the projected 860K and supported the U.S. dollar. At 19:00 GMT, the Existing Home Sales also raised to 6.54M against the forecasted 6.20M and supported the U.S. dollar that ultimately weighed on EUR/USD pair.

Apart from macroeconomic data, the European Central bank has also hinted that the Eurozone’s economy was in for a bumpy road ahead. The President of ECB Christine Lagarde also warned about the effects of the second wave of coronavirus on the economy. So, the weak outlook of the Eurozone economy also weighed on EUR/USD pair.

Daily Technical Levels

Support    Resistance

1.1828     1.1889

1.1795     1.1915

1.1768     1.1949

Pivot Point: 1.1855

EUR/USD– Trading Tip

The bullish bias of the EUR/USD has weakened as the pair fell from the 1.1880 level to a 50% Fibonacci retracement level of 1.1805 level. This level’s violation may trigger further selling until the 1.1769 area that marks 61.8% Fibonacci retracement for the EUR/USD. The EUR/USD is likely to exhibit further selling bias today, especially after violating the 1.1770 level to 1.1740 level. The MACD and RSI are also supporting the bearish bias; therefore, bearish bias remains dominant today. The EUR/USD may face resistance around 1.1837 and 1.1880 level today.


GBP/USD – Daily Analysis

The GBP/USD closed at 1.30822 after placing a high of 1.31517 and a low of 1.30704. Overall the GBP/USD pair remained on the downside all through the day. The GBP/USD pair gave up some ground and remained bearish on Thursday amid the broad-based U.S. dollar come back. However, the GBP/USD pair managed to stay in the upper half of its weekly range.

The British Pound fell on Thursday, although the talks between the E.U. & U.K. resumed on the day. The reason could be attributed to the brinkmanship from Britain amid negotiations, risk an accidental no-deal Brexit. On Thursday, the top E.U. Brexit negotiator Michael Barnier arrived in London to intensify talks with his British counterpart David Frost to break the impasse and find a solution to key sticking points, fisheries, and state aid.

The fisheries have long been a debating point in the Brexit negotiations as the U.K. has been determined to control access to its waters after the transition period ends. U.K. has refused to stick with the E.U.’s common fisheries policy that set fishing quotas among the E.U. member states. The transition period has come near to end with just months to go, and the U.K. has refused to allow talks to run past the year-end deadline. According to a spokesman for UK PM Boris Johnson, the time has remained very short as the U.K. has been reportedly clear that any agreement should be placed before the end of the transition period.

The concerns have raised in the market that the U.K.’s strategy to be somewhat tough on talks and deadlines could risk an accidental no-deal Brexit as the end of the year is coming ahead. These concerns weighed on the Sterling and added the GBP/USD pair’s losses on Thursday.

On the data front, the CBI Industrial Order Expectations from the U.K. came in as -34 against the forecasted -50 and supported British Pound. 

However, from the U.S. side, the Unemployment Claims from the previous week declined to 787K against the forecasted 860K and supported the U.S. dollar. The Existing Home Sales also supported the U.S. dollar after rising to 6.54M from the anticipated 6.20M. The positive data from the U.S. exerted pressure on GBP/USD pair on Thursday. Meanwhile, the Bank of England Governor Andrew Bailey told of strong demand to invest in climate change technology. He also sketched a strong demand for green investment. Looking forward, market participants will await the release of PMI for services and manufacturing activities to find a fresh clue about GBP/USD pair.

Daily Technical Levels

Support    Resistance

1.3049     1.3129

1.3021     1.3179

1.2970     1.3208

Pivot point: 1.3100

GBP/USD– Trading Tip

The GBP/USD traded bearishly below the 1.3165 resistance area to trade at the 1.3070 level that marks the 38.2% Fibonacci retracement level for the Sterling. On the further downside, the GBP/USD pair may take another dip until the 61.8% Fibo level of 1.3018 as the MACD is still pointing towards the selling area. At the moment, Sterling’s immediate resistance holds at the 1.3070 mark; however, the closings below this level is supporting the selling bias. Consider opening sell trades below the 1.3100 level today. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.884 after placing a high of 104.921 and a low of 104.474. The movement of the USD/JPY currency pair stayed bullish throughout the day. The USD/JPY pair traded with a positive note during the whole Thursday session after a goodish pickup in the U.S. dollar demand. The rebounded U.S. dollar helped currency pair USD/JPY to gain positive traction and move away from the six-week lowest level it touched on Wednesday.

The slow progress in the U.S. stimulus measure package attracted some buying in the greenback that dampened the hopes that financial aid will be delivered before elections. The statement by House of Representatives Speaker Nancy Pelosi that soon there will be pen to paper on the stimulus bill failed to impress investors, and the USD/JPY pair continued moving in the upward direction.

Pelosi even said that the stimulus package could be passed in the House before election day. Still, investors were somewhat unconvinced that the bill could pass through the Senate due to the strong opposition from Republicans over a bigger stimulus deal. This, in turn, weighed on risk sentiment and supported the Japanese Yen that ultimately capped further upside in the USD/JPY pair prices.

Apart from developments surrounding the U.S. fiscal stimulus, the USD bulls further took clues from the better than expected release of the U.S. initial jobless claims. The number of Americans filed for unemployment benefits declined to 787K during the previous week for the first time against the projected 860K and supported the U.S. dollar. The decline in unemployment claims means less need for a U.S. stimulus package and more strength for the U.S. dollar and USD/JPY pair.

On the data front, the C.B. Leading Index from the U.S. dropped to 0.7% against the expected 0.8% and weighed on the U.S. dollar. The Existing Home Sales advanced to 6.54M in comparison to projected 6.20M and supported the U.S. dollar. Another favorable economic data release gave strength to the U.S. dollar that pushed the USD/JPY pair even higher on grounds.

Meanwhile, the rising number of coronavirus cases across the globe and fears for economic recovery due to lockdowns imposed to curb the spread of the virus raised the safe-haven appeal, supported the Japanese Yen, and weighed on the USD/JPY pair to limit its bullish move on Thursday.

On Thursday, the U.S. Dollar Index measures the greenback against the six currencies’ basket surge by 0.4% to 92.97. The U.S. dollar index fell to its seven-week lowest level at 92.46 on Wednesday but recovered from there on the next day amid a strong U.S. dollar despite the talks for stimulus package continued. However, traders’ focus will now be shifted towards the final presidential debate between President US Donald Trump and his Democratic rival Joe Biden.

Daily Technical Levels

Support    Resistance

104.18     105.35

103.68     106.00

103.02     106.51

Pivot point: 104.84

USD/JPY – Trading Tips

The USD/JPY traded dramatically bearish to drop from 105.460 level to 104.349 level. Like other pairs, the USD/JPY has also entered the oversold zone, and now sellers seem to be exhausted. On the higher side, the USD/JPY pair has reversed some of the losses to trade at the 104.700 level. On the higher side, the pair may go after the 38.2% Fibonacci retracement level of 104.900 and 50% Fibo level of 105. Let’s consider taking a buying trade over 104.350 area today. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, October 21 – Top Trade Setups In Forex – U.K., U.S., Canada Events in Highlights! 

On the news front, the economic calendar is filled with a series of fundamentals from the U.K. and Canada, focusing on the U.S. Inflation data. The U.K. Inflation data is due during the European session, and economists expect a slight improvement in the U.K. CPI figures from 0.2% to 0.4%, while core CPI is likely to surge to 0.4% from 0.2%, and it may underpin the Cable pair today. On the other hand, the Canadian inflation report is also expected to perform slightly better today to support the Canadian dollar demand. 

Economic Events to Watch Today  

 


 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.8221 after placing a high of 1.18406 and a low of 1.17598. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD rose for the 3rd consecutive day and extended its previous day’s gains to reach its highest since September 21. On Tuesday, the EUR/USD pair’s upward momentum was supported by a weaker U.S. dollar across the board.

The U.S. Dollar Index was down by 0.45% at 93.0, the lowest October level, however, the Dow Jones gains 0l68%, and the NASDAQ rose by 0.30%. On Tuesday, the greenback remained weak against all of its rivals as the investors look for the results in negotiations for a new round of fiscal stimulus in the U.S.

The EUR/USD pair rose more than 0.5% on Tuesday above the 1.18400 level for the first time in October as the market mood improved. EUR/USD pair followed the lockdown on Brexit talks, coronavirus spread in Europe, and France is reporting the record-high number of people hospitalized with Ireland introducing tough restrictions.

On the data front, the German PPI for September raised to 0.4% from the forecasted 0.1% and supported the single currency. At 13:00 GMT, the Current Account from Eurozone also raised to 19.9B against the forecasted 17.2B and supported EUR/USD pair’s bullish move.

At 17:30 GMT, the Building Permits raised to 1.55M from the expected 1.52M and supported the U.S. dollar on the U.S. front. The Housing Starts from the U.S. declined to 1.42M against the forecasted 1.45M and weighed on the U.S. dollar that ultimately added strength to EUR/USD pair on Tuesday. Furthermore, the improved risk sentiment after the reviving hopes for additional U.S. fiscal stimulus and expectations of a COVID-19 vaccine by the end of this year boosted investors’ confidence. The risk-on flow smashed the greenback’s relative safe-haven status and was seen as a key factor driving the currency pair higher.

The U.S. House Speaker Nancy Pelosi said on Sunday that legislation on a wide-range of coronavirus relief packages could be pushed through before the election on November 3. Whereas, the investors remained unconvinced that a deal could be reached with Republicans before the self-imposed deadline by Pelosi.

Traders were also concerned about the rising number of coronavirus cases in Europe that could lead to fresh lockdown measures and dent global economic recovery. This, in turn, raised the U.S. dollar demand due to its safe-haven status and capped further upside momentum for EUR/USD pair.

Looking forward, the market participants will await the release of German PPI for September on Wednesday for finding fresh clues about the EUR/USD pair’s movements.

Daily Technical Levels

Support Resistance

1.1773     1.1854

1.1725     1.1889

1.1691     1.1936

Pivot point: 1.1807

EUR/USD– Trading Tip

The EUR/USD is trading sharply bullish amid a weaker U.S. dollar at 1.1848 level, and continuation of a bullish trend has formed three white soldiers on the 4-hour timeframe. That bullish setup may drive an upward movement until the 1.1870 mark and 1.1900 level. The MACD and RSI support the buying trend, and on the higher side, the EUR/USD may face resistance at 1.1870. Conversely, the bearish correction can also be seen until the 1.1831 level and 1.1807 mark. Above 1.1807, we can expect a continuation of a buying trade today. 


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29466 after placing a high of 1.29794 and a low of 1.29107. Overall the movement of the GBP/USD pair remained bullish throughout the day. The GBP/USD pair followed its previous daily trend and rose for the second consecutive day on Tuesday; however, the gains remain limited as the frozen Brexit talks overshadowed the U.S. dollar’s weakness. The parts of Britain went into lockdown to curb virus infections also weighed on the rising GBP/USD pair on Tuesday.

The Brexit trade deal’s trade talks were paused after a phone call between negotiators from both sides failed to make a breakthrough. The U.K. negotiator David Frost said that his call with E.U. counterpart Michel Barnier was constructive but in-person talks could not resume. He said that fundamental change in the E.U.’s approach was required before face-to-face talks should continue. At the same time, Barnier said that the E.U.’s door was open following the phone call. The Frenchman who had proposed intensified talks in London this week said that both sides should make the most out of the little time left as both sides sought an agreement to govern their trading relationship[ after the U.K.’s transition period in the E.U. ends in January 2021. Both sides are calling on the other to compromise ahead of the looming December deadline for a deal. The disagreement persists on key issues like fisheries, level playing field, and governance.

On Tuesday, the U.K. Prime Minister Boris Johnson reportedly told the Greek prime minister that Brexit talks would remain paused until the E.U. changes its stance on the negotiations. He also reaffirmed that the E.U. had effectively ended the negotiations by stating that they did not want to change their negotiating positions, so the E.U. should change their position, and then the U.K. would be willing to talk on a new basis.

Without a trade deal, the U.K. will trade on the terms of the World Trade Organization with the E.U. that will hurt both economies, particularly when some parts of Britain were under lockdown to control the rising infection cases. The PM Boris Johnson also confirmed that Great Manchester would be going into the highest lockdown level – Tier 3- from Friday. It came in because the U.K.’s coronavirus cases raised by 21,330 daily, its highest daily rise since June 5.

All these Brexit tensions and rising coronavirus cases, and the renewed lockdowns kept the GBP/USD pair’s additional gains under pressure on Tuesday. Whereas, the internal market of PM Boris Johnson that seeks to undermine parts of the Brexit withdrawal agreement was voted down in Parliament, and this supported the GBP/USD pair’s bullish trend on Tuesday.

There was no macroeconomic release from Britain’s side on the data front, and from the U.S., the Housing Starts were declined to 1.42M against the expected 1.45M and weighed on the U.S. dollar that ultimately added strength to GBP/USD pair.

Daily Technical Levels

Support Resistance

1.2910     1.2980

1.2875     1.3015

1.2841     1.3049

Pivot point: 1.2945

GBP/USD– Trading Tip

The GBP/USD surged sharply to trade at the 1.3006 mark, but soon it slipped again to trade at the 1.2939 level. The cable is currently gaining immediate support at the 1.2939 level, and a bearish breakout of the 1.2939 mark can lead to GBP/USD prices further lower towards the 1.2886 level. On the flip side, the resistance continues to hold around the 1.3006 level. The MACD and RSI show neutral bias as investors seem to wait for a solid reason to enter the market. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.506 after placing a high of 105.745 and a low of 105.339. Overall the movement of the USD/JPY pair remained bullish throughout the day. The USD/JPY pair rose to its six-day highest level on Tuesday in the early trading session but started losing its intraday gains in the late session due to U.S. dollar weakness. The uncertainty surrounding the next round of the U.S. fiscal stimulus kept the U.S. dollar bulls defensive and the USD/JPY pair under pressure.

The main factor involved in the USD/JPY pair’s upward momentum in U.S. dollar weakness was the solid rebound in U.S. equity markets that undermined the safe-haven Japanese Yen. Furthermore, a strong pickup in the U.S. Treasury bond yields, though, failed to revive the U.S. dollar demand and remained supportive of the move.

On the data front, at 17:30 GMT, the Building Permits for September from the U.S. raised to1.55M from the projected 1.52M and supported the U.S. dollar that ultimately pushed the USD/JPY pair higher. The Housing Starts declined in September to 1.42M from the anticipated 1.45M and weighed on the U.S. dollar helped cap further upside momentum in the USD/JPY pair.

The trade’s focus was on the developments over the U.S. stimulus measure as the self-imposed deadline by the U.S. House of Representatives Speaker Nancy Pelosi to reach a deal with Republicans was about to end. The hopes for the next round of stimulus measures were fading away as only two weeks are left for U.S. presidential elections, and it seems hard that both sides will reach a deal by then.

These faded hopes also supported the U.S. dollar and added further strength to the rising USD/JPY pair on Tuesday.

Meanwhile, on Tuesday, the U.S. Federal Reserve Vice Chair Randal Quarles said that the nonbank financial system was significantly more fragile than its traditional counterparts, and it has been confirmed by the market stresses created by the coronavirus pandemic. Furthermore, the Philadelphia Federal Reserve Bank President Patrick Harker said that Fed’s new framework should help address shortfalls in employment and help affected workers find new opportunities. He said that tolerating higher inflation will be worth it to help achieve employment goals. These comments from Fed officials also supported the USD/JPY pair’s bullish move on Tuesday.

Daily Technical Levels

Support Resistance

105.33     105.69

105.18     105.90

104.96     106.05

Pivot point: 105.54

USD/JPY – Trading Tips

The USD/JPY trades with a bearish bias around the 105.250 level, having violated the upward channel at the 105.450 level. Closing of candles below this level may lead the USD/JPY pair towards the 105 mark; however, it needs to violate the immediate support area of 105.285. Closing of candles below 105.285 may help us capture quick selling trades until the 105 level. The USD/JPY has recently closed a bearish engulfing candle, and it has also violated the upward channel; both of these are supporting further selling trend in the USD/JPY pair today.  

Good luck!  

Categories
Forex Signals

USD/CAD Managed to Extend Its Previous Session Modest Gains

During Tuesday’s early Asian trading session, the USD/CAD currency pair managed to extend its previous session modest gains and remain well bid around closer to 1.3200 level due to the declines in the crude oil prices, which tend to undermine the commodity-linked currency the Loonie and helps the currency pair to put the fresh bids during the early Asian session. 

On the contrary, the broad-based U.S. dollar weakness, triggered by the combination of factors, could be considered one of the key factors that kept the lid on any additional gains in the currency pair. As of writing, the USD/CAD currency pair is currently trading at 1.3190 and consolidating in the range between 1.3148 – 1.3195.

The optimism over the coronavirus (COVID-19) vaccine/treatment was recently overshadowed by the concerns about the second wave of coronavirus infections, which keep fueling the doubts over the global economic recovery. Besides this, the renewed conflict between the U.S. and China also weighed on the market trading sentiment. It is worth mentioning that Mike Pompeo has stated that ‘We are sanctioning mainland-China and Hong Kong entities and individuals for conduct related to the sanctioned proliferator the Islamic Republic of Iran Shipping Lines. He further added that our warning is clear: If you do business with IRISL or its subsidiaries, you will face U.S. sanctions.” This recently exerted downside pressure on the trading sentiment and contributed to the currency pair losses.

Despite this, the broad-based U.S. dollar remained depressed as the investors continue to sell U.S. dollars in the wake of the renewed hopes of additional U.S. fiscal stimulus measures and hopes of a coronavirus vaccine at the end of this year, which tends to undermine the safe-haven U.S. dollar. Elsewhere, the U.S. dollar losses were further bolstered by the doubts over the U.S. economic recovery amid rising coronavirus cases. Thus, the U.S. dollar losses become the key factor that cap further gains in the currency pair. Simultaneously, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies dropped by 0.04% to 93.672.

On the bullish side, the WTI’s weakness restricts the USD/CAD bearish moves as oil is the biggest export-item for Canada. However, the WTI crude oil prices failed to extend its previous day gaining streak and remain depressed on the day mainly due to China’s GDP grew less than expected in the third quarter (Q3), which fueling concerns over the demand for crude oil from the world’s second-largest oil consumer. This, in turn, undermined the sentiment around the crude oil prices. The concerns over the sharp rise in new coronavirus cases, which could trigger renewed lockdown restrictions and damage the global economy’s ongoing recovery, continued challenging the crude oil bulls. Thus, the crude oil prices’ losses undermined the commodity-linked currency the Loonie and contributed to the currency pair gains.

Looking forward, the market traders keeping their eyes on the Housing Starts and Building Permits data. In the meantime, the updates surrounding the fresh Sino-US tussle, as well as the coronavirus (COVID-19), could not lose their importance.

Daily Support and Resistance

S1 1.308

S2 1.3141

S3 1.3166

Pivot Point 1.3202

R1 1.3226

R2 1.3263

R3 1.3323

The USD/CAD is trading mostly sideways over the 1.3170 level, and recently, it’s trying to a bullish engulfing pattern that may drive upward movement in the market until the 1.3250 level. Conversely, the bearish breakout of 1.3175 level can drive selling bias until 1.3095. Overall, the RSI and MACD are in support of selling bias until the 1.3095 level. Let’s consider taking a buy trade over 1.3170 and selling below the same level today. Good luck!

Categories
Forex Market Analysis

Daily F.X. Analysis, October 20 – Top Trade Setups In Forex – European Events in Highlights! 

On the news front, the economic calendar is filled with a series of low impact economic events. However, the focus will remain on the German PPI m/m and Current Account from the Eurozone, and the point to note is that both of the data are expected to be positive so that it may underpin the Euro today. Besides, the FOMC Member Williams and Quarles speeches will be monitored for further price action. 

Economic Events to Watch Today  

 


 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17708 after placing a high of 1.17936 and a low of 1.17030. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD pair was up on Monday and tried to approach the 1.1800 arear as the hopes of a U.S. stimulus package weighed on the U.S. dollar. 

The U.S. dollar was weak across the board due to mounting hopes that the U.S. stimulus package will be delivered soon and the encouraging Chinese data published on the day in early trading sessions. It was revealed that Republicans added 0.1 trillion dollars to its previous $1.8 trillion package offer to reach a consensus with Democrats. The Democrats, however, still found it difficult to reach a deal with republicans.

However, the hopes were increased in the market for U.S. stimulus as Republicans were making progress in compromising. This weighed on the U.S. dollar and helped the EUR/USD pair to extend its gains. On China’s front, the data from there reported its GDP at 4.9% in Q3 that was below the expectations of 5.2% and above the previous 3.2%. The U.S. dollar came under pressure because of China’s good performance in Q3 than Q2 and supported the EUR/USD pair’s upward momentum.

On Monday, the European Central Bank President Christine Lagarde said that she wanted E.U. governments to consider the possibility of making E.U. debt a permanent fixture of the bloc’s economic response to the crises. When asked about the 750 billion euros debt-fueled response to the coronavirus crisis, the E.U. commission will borrow on financial markets and disburse to E.U. countries as grants and loans; Lagarde said that this stimulus tool was a response to an exceptional situation like a pandemic. She added that there should be a discussion about this stimulus’s possibility to remain in the European toolbox to be mobilized again in identical circumstances.

Lagarde added that a debate on a common budgetary tool specific to the Euro area should take place and learn lessons from the situation that has happened recently. These comments from Lagarde added further strength to the already rising Euro currency and added additional gains. On the coronavirus front, Belgium extended its restrictions on bars and restaurants for the next four weeks as the infection rate rose continuously. The health minister warned that Belgium could soon be overwhelmed by new coronavirus infections.

Italy recorded its highest daily infection rate on Sunday and announced a raft of measures to control infection spread. Meanwhile, nine major French cities were also placed under curfew. However, these lingering coronavirus tensions failed to reverse the rising EUR/USD pair, and the currency pair remained on the positive track on Monday.

Daily Technical Levels

Support Resistance

1.1709     1.1723

1.1703     1.1731

1.1695     1.1737

Pivot point: 1.1717

EUR/USD– Trading Tip

The EUR/USD is consolidating below a strong resistance level of 1.1793 level, extended by a downward trendline on the 4-hour timeframe. On the lower side, the EUR/USD may find support at the 1.1735 level, and violation of this support level can extend selling until the 1.1690 level. On the higher side, bullish trend continuation can lead the EUR/USD price towards the next target level of the 1.1830 mark. The MACD supports bullish bias; therefore, we should look for buying trades upon today’s breakout of the 1.1790 level. 


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29827 after placing a high of 1.30244 and a low of 1.28912. The British Pound eased from session highs on Monday against the U.S. dollar but remained supported as the E.U. assured that it would remain committed to intensifying Brexit-deal talks with the U.K. The E.U. Brexit negotiator Michel Barnier confirmed that the E.U. remained available to intensify negotiations in London. This marked a change in tone after E.U. leaders dropped their pledge to intensify trade talks last week and called on the U.K. to make concessions for a deal. Barnier’s statement raised the possibility of a Brexit deal and helped GBP/USD pair to remain positive on Monday.

The U.K. Cabinet Office Minister Michael Gove had suggested that the U.K. would not resume talks before acknowledging signs of progress. He also said that he welcomes the constructive move on the part of the E.U. However, he said that there was no basis to find an agreement and that Brussel’s proposals were inconsistent with sovereign status. He also labeled potential talks as meaningless.

The pair GBP/USD was raised during the early trading session but failed to extend gains and eased due to Gove’s statement. Michael Gove said that the U.K. was increasingly well-prepared for an Australian-style exit from the E.U., meaning no-deal. The mixed statements from Barnier and Gove confused the traders, and the currency pair suffered from it as it moved on the upside in the early session and lost most of its gains in the late session.

On the data front, at 04:01 GMT, the Rightmove Housing Price Index for October came in as 1.1% compared to the previous 0.2%. From the U.S. side, the NAHB Housing Market Index rose to 85 from the forecasted 83 and supported the U.S. dollar that limited GBP/USD pair gains on Monday.

Meanwhile, the rising number of coronavirus in the U.K. also weighed on GBP/USD pair as an 18,804 new cases were reported for COVID-19 in the U.K. on Monday with 80 new deaths. This also kept the pair under pressure and its gains limited on the day.

Daily Technical Levels

Support Resistance

1.2900     1.2941

1.2874     1.2956

1.2859     1.2982

Pivot point: 1.2915

GBP/USD– Trading Tip

The GBP/USD surged sharply to trade at the 1.3006 mark, but soon it slipped again to trade at the 1.2939 level. The cable is currently gaining immediate support at the 1.2939 level, and a bearish breakout of the 1.2939 mark can lead to GBP/USD prices further lower towards the 1.2886 level. On the flip side, the resistance continues to hold around the 1.3006 level. The MACD and RSI show neutral bias as investors seem to wait for a solid reason to enter the market. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed to 105.430 after placing a high of 105.501 and a low of 105.299. Overall the movement of the USD/JPY pair remained bullish throughout the day. Despite the U.S. dollar weakness, the USD/JPY pair posted gains on Monday and remained bullish as the U.S. stimulus package deal’s developments started moving on the positive side. The market mood was also better and played against the greenback after releasing the GDP report from China.

The Republicans extended its previous offer of $1.8 trillion to a $1.9 trillion packages on Monday, which was again failed by Democrats. The U.S. President Donald Trump has expressed his willingness for a larger stimulus package, but he still has to convince Republicans. Whereas, the U.S. House Speaker Nancy Pelosi has set out a 48-hour deadline for U.S. stimulus talks in the last effort to reach a deal before the elections.

Before elections, the hopes for a stimulus package dimmed and supported the U.S. dollar and raised the USD/JPY pair on Monday.

Meanwhile, China published its GDP report for the third quarter that came in as 4.9% and fell short of the forecasted 5.5% but extended compared to the previous 3.2%. The U.S. dollar came under pressure because of the Chinese GDP report and further capped gains in the USD/JPY pair on Monday.

On the data front, at 04:50 GMT, the Trade Balance from Japan for September came in as 0.48T against the forecasted 0.85T and weighed on the Japanese Yen. At 19:00 GMT, the NAHB Housing Market Index for October raised to 85 from the forecasted 83 and supported the U.S. dollar that pushed the USD/JPY pair even higher. Meanwhile, the Fed Chair Jerome Powell said in his speech on Monday that it should be more important for the U.S. to get the development of CBDC- cross-border digital currency right than being the first one to issue it.

China has given away about $1.5 million for its digital currency trials and has said that it would become the first to issue a CBDC. China wanted to reduce its dependence on the global dollar payment system and has taken the initiative to issue its digital currency.

Following China’s move, many central banks worldwide have started examining the possibility of issuing a digital currency. Facebook has also announced introducing Libra, its digital currency, given the increased demand for digital payments during the COVID-19 pandemic.

The Bank for International Settlements (BIS) and the seven other central banks, including the U.S. Fed and Bank of England, have released a report that tells the importance of CBDC to catch up with China’s move be the first one. According to Powell, the U.S. Fed has not yet decided on the issuance of digital currency, but it has been an active participant in research into the issue.

Moreover, the Federal Reserve Vice Chair Richard Clarida said on Monday that after taking a substantial hit from the pandemic, the U.S. economy was rebounded strongly. He said that it might take another year to reach pre-pandemic economic levels, but the labor market could take more than that to recover the pandemic’s damage. Fed officials’ comments also weighed on the U.S. dollar and caped further gains in the USD/JPY pair on Monday.

Daily Technical Levels

Support Resistance

105.37     105.50

105.28     105.56

105.23     105.64

Pivot point: 105.42

USD/JPY – Trading Tips

The USD/JPY trades with a bullish bias around the 105.550 level, holding below the double bottom area. Bullish crossover of 105.550 level may lead USD/JPY pair further higher until 105.800 level. On the 2 hour chart, the USD/JPY has formed an upward channel, which is likely to support the USD/JPY pair around the 105.300 level. Below this, the next support is likely to be found around 105.250 and 105.06. Let’s consider opening sell trade beneath 105.60 and buying over 105.050 level today. Good luck!