Categories
Forex Signals

USD/JPY Violates Triple Bottom – Sell Signal Update! 

The USD/JPY continues to trade sideways in between a wide trading range of 104.340 – 103.560. The USD/JPY has formed a sideways channel on the 4-hour timeframe, and it has the chance of leading the pair towards the next resistance level of 104.800 upon the breakout of 104.810. 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! 


Entry Price – Sell 103.385

Stop Loss – 103.785

Take Profit – 102.985

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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Forex Market Analysis

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

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

Economic Events to Watch Today  

EUR/USD – Daily Analysis

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

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

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

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

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

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

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

Daily Technical Levels

Support   Resistance

1.2210     1.2279

1.2175     1.2311

1.2142     1.2347

Pivot point: 1.2243

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support   Resistance

1.3456     1.3533

1.3413     1.3567

1.3379     1.3611

Pivot point: 1.3490

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

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

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

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

Daily Technical Levels

Support   Resistance

103.39     103.78

103.23     104.01

103.01     104.17

Pivot point: 103.62

USD/JPY – Trading Tips

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

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Forex Course

197. Using The USDX Numbers To Trade The Forex Market

Introduction

The U.S. Dollar Index is one of the most reckoned currency indexes and trades on exchanges with the DXY ticker or the USDX ticker. This index has been around in the market since 1973, when the base value was kept at 100,000.00, which is now 100.00.

It is a very prominent factor that facilitates Greenback. And the basket used to measure the U.S. dollar index value has only been changed once post-Euro replaced many other European currencies in 1999.

Formula To Calculate USDX

USDX = 50.14348112 * the EUR/USD exchange rate ^ (-0.576) * the USD/JPY exchange rate ^ (0.136) * the GBP/USD exchange rate ^ (-0.119) X the USD/CAD exchange rate ^ (0.091) × the USD/SEK exchange rate ^ (0.042) * the USD/CHF exchange rate ^ (0.036).

Implementing The US Dollar Index to Trade Forex

The movement determined in the U.S. currency index, such as the USDX, offers traders a sense of how the currency is experiencing a change in its value against other currencies in the index. For instance, if there is a rise in the USDX level, this indicates the rise in the U.S. dollar. Similarly, when the level of USDX is falling, so is the dollar in the foreign exchange market.

Many financial reporters leverage the changes witnessed in the U.S. Dollar Index’s value to offer their viewers and audiences an idea of how the U.S. dollar performed in the foreign exchange market. This works as an alternative to analyzing how each currency increased or decreased against the dollar.

Moreover, the USDX can also act as an inverse indicator that reflects the strength of the consolidated Euro currency of the European Union, considering that the weight of Euro (57.6%) is the most in the index.

Another prominent aspect that the forex trader should consider is how the movements of the USDX is associated with the other currencies that are put against the U.S. Dollar.

For instance, when the currency pair is measured as USD/JPY, it is likely to be positively correlated, and both the currencies should rise and fall at the same time.

Contrarily, when the currency pair is measured like EUR/USD, then the currency pair and USDX are inversely correlated. This implies that they are likely to move in the opposite direction, where one will fall when the other rises.

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Forex Fundamental Analysis

USD/JPY Global Macro Analysis – Part 3

USD/JPY Exogenous Analysis

In the exogenous analysis, we will analyze economic indicators that exhaustively compare the performance of the US and the Japanese economies. These factors impact the dynamic of the USD/JPY pair in the forex market. They include:

  • US and Japan interest rate differential
  • The difference in the GDP growth in the US and Japan
  • Balance of trade

US and Japan interest rate differential

The interest rate differential is the difference between the interest rate in the US and that of Japan. Investors would prefer to invest their funds in a country that offers higher returns. Furthermore, carry traders are often bullish on the currency with a higher interest, which ensures that they earn higher yields.

The Bank of Japan has kept the interest rates at -0.1% since 2016. The current federal funds rate in the US is 0.25%. Thus, the interest rate differential for the USD/JPY is 0.35%. Since there are no foreseeable changes in the interest rates in either country, we assign it an inflationary score of 2.

Balance of trade

Balance of trade determines whether a country has a trade surplus or deficit in international trade. A trade surplus results from a country’s exports being of higher value than that of its imports. A deficit occurs when the imports are of higher value than exports. Japan mostly exports machinery and electronics, which puts it at a significant advantage due to the value of these goods. On the other hand, the US is a net importer.

In October 2020, japan has a trade surplus of ¥872.9 billion, which has been steadily increasing since June. The US has a trade deficit of $63.9 billion, which has been growing throughout the year.

The balance of trade differential between the US and Japan has been widening in favor of Japan. Based on our correlation analysis with the USD/JPY, we assign it a score of -6. It means that if this trend persists, we expect the USD/JPY to be bullish in the near term.

The difference in the GDP growth in the US and Japan

Although the US has a higher GDP than Japan, we can compare the two economies based on their growth rates.

The US economy had a GDP growth rate of 33.1% in Q3 2020, while Japan’s economy expanded by only 5%. The US economy is seen to be expanding at a faster pace than that of Japan. Based on the correlation with the price of the USD/JPY pair, we assign an inflationary score of 2. This means that we should expect a bullish trend on the USD/JPY pair if the US economy keeps expanding faster than that of Japan.

Conclusion

The total score from the exogenous analysis of the USD/JPY pair is -2. This implies that in the near term, we should expect a bearish trend in the pair.

Technical analysis of the USD/JPY pair shows that the weekly chart is still trading way below the 200-period MA. Furthermore, the pair has failed to successfully breach the middle Bollinger band, which has served as its resistance level. All the best!

Categories
Forex Fundamental Analysis

USD/JPY Global Macro Analysis – Part 1 & 2

Introduction

Global macro analysis of the USD/JPY pair involves the analysis of endogenous factors that impact both the USD and the JPY; and exogenous analysis for the USD/JPY pair.

In the endogenous analysis, we’ll focus on domestic macroeconomic factors that drive the domestic growth in the US and Japan. The exogenous analysis will involve the analysis of global macroeconomic factors that define the dynamics of the USD/JPY pair.

Ranking Scale

We will rank both the endogenous and the exogenous factors on a sliding scale of -10 to +10. Whenever the ranking is negative, it means that the macroeconomic indicator led to the depreciation of the currency. A positive ranking means that the indicator had an inflationary impact.

USD Endogenous Analysis – Summary

A score of -19.1 implies a clear deflationary effect on the US Dollar. This means that USD has lost its value since the beginning of 2020, according to these indicators.

You can find the complete USD Endogenous Analysis here.

JPY Endogenous Analysis – Summary

The endogenous analysis for the Japanese economy resulted in an overall inflationary score of 3. Based on this analysis, we can expect that the JPY had appreciated marginally in 2020.

  • Japan Inflation Rate

The inflation rate in Japan is measured by the consumer price index  (CPI). The CPI weights various consumer expenditures depending on their level of importance. Food is weighted at 25%, Housing 21%, transport and communication 14%, recreation 11.5%, energy and water 7%,  medical care 4.3%, and clothing 4%.

A higher rate of inflation is necessary for economic growth. It also forestalls a possible interest rate hike, which is accompanied by currency appreciation.

In October 2020, the MoM inflation rate in Japan decreased by 0.1% constant change since August. The YoY inflation rate decline by 0.4%, the first decline in about four years.

Based on our correlation analysis, we assign Japan’s inflation rate, a deflationary score of -2.

  • Japan Unemployment Rate

The unemployment rate measures the number of Japanese citizens eligible for employment who are currently seeking gainful employment opportunities.

An increasing rate of unemployment means that more jobs are lost in the economy faster than new jobs are being created. That’s an indicator that the economy is contracting.

In October 2020, Japan’s unemployment rate increased to 3.1%, representing 21.4 million people, the highest recorded since May 2017.

Due to the high correlation between the unemployment rate and GDP, we assign it a score of -5.

  • Japan Manufacturing PMI

The Japan manufacturing PMI is also known as the Jibun Bank Japan Manufacturing PMI. The PMI is compiled through a series of monthly questionnaires surveying about 400 manufacturers. The manufacturers are segregated depending on their industry’s contribution to GDP, and their responses aggregated into a diffusion index. When the index is above 50, it means that the manufacturing activity increased while a below 50 reading implies a slow-down in the manufacturing sector.

Japan is a highly industrialized economy, and its manufacturing activities have a high correlation with its GDP growth rate.

In November 2020, the Japan Manufacturing PMI was 49, inching closer to the highest recorded 49.3 in January. Since the manufacturing PMI has been steadily increasing from the lows of 38.4 in May, we assign it an inflationary score of 6.

This PMI is also known as Jibun Bank Japan Services PMI. It is a survey of over 400 services companies operating in the Japanese services industry. A Survey of the purchasing managers is used to track industry changes in employment, inventories, sales, and prices. Sectors covered by the survey include transport and communication, personal services, financial services, hotel industry, and IT. The responses are weighted based on the sector’s size and aggregated into an index from 0 to 100.

When the index is above 50, it signals that there is an expansion in the services industry, while below 50 shows contraction.

In November 2020, the Japan services PMI dropped to 46.7 from 47.7 in October. Although the index is above the lows of 21.5 recorded at the height of the coronavirus pandemic, it is still lower than the levels observed in the pre-pandemic period.

Based on our correlation analysis, we assign Japan services PMI an inflationary score of 2.

  • Japan Retail sales

The monthly retail sales measure the change in the value of goods consumed directly by households. In any economy, the growth in GDP is primarily driven by the demand by households. Thus, retail sales can be considered a significant indicator of economic growth.

In October 2020, the MoM retail sales in Japan increased by 0.4%, while YoY retail sales increased by 6.4%. The increase in October is the first time the YoY retail sales have increased since February. This shows demand in the Japanese economy is growing after the easing restrictions implemented in the wake of the pandemic.

Due to its high correlation with the GDP, we assign Japan retail sales an inflationary score of 5.

  • Japan General Government Gross Debt to GDP

This is the ratio between the amount of debt, both domestic and foreign, that the Japanese government has accumulated to national GDP. Typically, lenders use this ratio to determine if a country’s economy is overly leveraged and if the government might default in the future.

Note that Japan has the largest national debt to GDP in the world. However, although it is heavily indebted, unlike many other countries, Japanese debt is denominated in Yen. More so, foreigners only hold about 6.5% of the total debt. That is why Japan can continue to accumulate such massive debts without any fears of hyperinflation or default risks. But that doesn’t mean that the debt isn’t weighing down on the economy.

In 2019, the Japan national debt to GDP was 238%, an increase from 236.6% in 2018. In 2020, it is projected to exceed 240% due to the measures implemented to fight the pandemic. Based on our correlation analysis, we assign it a deflationary score of -3.

Please check our next article to find the Exogenous analysis of both USD and JPY currencies. We have also come to a conclusion on whether you should expect a bullish or bearish trend in this pair.

Categories
Forex Signals

Oversold USD/JPY Braces for a Bullish Correction – Quick Update on Signal!

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 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.

Entry Price – Buy 1912.42
Stop Loss – 1906.42
Take Profit – 1919.92
Risk to Reward – 1:1.25
Profit & Loss Per Standard Lot = -$600/ +$750
Profit & Loss Per Micro Lot = -$60/ +$75
Fellas, now you can check out forex trading signals via Forex Academy mobile app. Follow the links below.
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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…


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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

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Forex Market Analysis

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

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

Economic Events to Watch Today  

 


 


EUR/USD – Daily Analysis

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

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

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

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

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

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

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


Daily Technical Levels

Support Resistance

1.1676     1.1748

1.1646     1.1790

1.1605     1.1820

Pivot point: 1.1718

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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


Daily Technical Levels

Support Resistance

1.2859     1.3000

1.2804     1.3086

1.2718     1.3141

Pivot point: 1.2945

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

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

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

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


Daily Technical Levels

105.05     105.70

104.82     106.12

104.40     106.36

Pivot point: 105.47

USD/JPY – Trading Tips

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

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Forex Signals

USD/JPY Under Pressure – Downward Channel Weights! 

The USD/JPY pair was closed at 105.161 after placing a high of 105.514 and a low of 105.034. Overall the movement of the USD/JPY pair remained bearish throughout the day. The rising uncertainties in the market related to US stimulus, vaccine development, global economic recovery, and the US November presidential elections gave a push to safe-haven appeal that supported safe-haven Japanese Yen and weighed on USD/JPY pair.

The currency pair dropped on Wednesday to one week’s lowest level as the hopes for the next round of US stimulus package before elections fell after Nancy Pelosi said that the newly proposed package of $1.8 trillion by President Trump would be not sufficient to provide support to economic recovery from the pandemic and deep recession.

Another reason behind the faded risk sentiment was the latest news about the vaccine trials from different candidates. Earlier this week, Johnson & Johnson halted their coronavirus vaccine’s clinical trials due to an unexpected illness in one of the participants. And on Wednesday, the Eli Lilly and Co. also stopped its vaccine’s trials for coronavirus, and this raised concerns that without a vaccine, the economic recovery will be slow. These concerns added in demand for safe-haven and raised the Japanese Yen that ultimately weighed on the USD/JPY pair.

On the data front, the Revised Industrial Production from Japan for August dropped to 1.0% from the forecasted 1.7% and weighed on the Japanese Yen. The PPI and the Core PPI data from the United States for September raised to 0.4% from 0.2% of forecasts and supported the US dollar. Macroeconomic data from both sides supported the USD/JPY pair but failed to reverse the direction as the investors were focusing on the rising number of uncertainties in the market.

Meanwhile, the 2020 World Bank Group-IMF Annual Meetings started on October 12th to 18th, in which global finance leaders warned that the fragile recovery would be crushed by the failure to stop the spread of coronavirus, maintain stimulus, and rising debts in developing nations.

Global poverty has been raised to the highest levels for the first time in 2 decades due to the coronavirus crisis. Developing nations had been hit hard by the pandemic as the debts for recovering through the crisis rose in developing nations to alarming levels. The annual meetings’ agenda was to take necessary actions to build a strong foundation for a strong recovery that would help all countries.

The US Treasury Secretary Steven Mnuchin urged both global institutions IMF and World Bank on Wednesday to work thoughtfully within their existing resources to battle the coronavirus pandemic. Mnuchin also urged G20 nations to approve a proposed debt restructuring framework.

The rising hopes that developing nations will be getting help to recover from the pandemic also raised the market’s risk sentiment that limited additional losses in USD/JPY prices on Wednesday.

Furthermore, on Wednesday, the Federal Reserve Vice Chair Richard Clarida said that the US economic data has been shockingly strong since May, but the output will still take another year to climb back to its pre-pandemic level. Clarida’s comments raised uncertainty over recovery and supported the Japanese Yen that weighed on the USD/JPY pair.


Daily Support and Resistance

S1 104.26

S2 104.74

S3 104.93

Pivot Point 105.22

R1 105.41

R2 105.7

R3 106.18

The USDJPY pair is trading with a selling bias below an immediate resistance level of 105.349 level. On the 4 hour timeframe, the USD/JPY has formed a downward channel that’s extending resistance at 105.349. Closing of candles beneath this level is likely to keep the USD/JPY pair in a selling mode until the 105.050 mark, conversely, the bullish breakout of the 105.349 level may lead the pair further higher towards the 105.580 level. 

Entry Price – Buy 105.245

Stop Loss – 105.645

Take Profit – 104.845

Risk to Reward – 1:1

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

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

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Forex Market Analysis

Daily F.X. Analysis, 12th October – Top Trade Setups In Forex – U.S. Bank Holiday! 

On the news front, the market is likely to exhibit slight movements as the U.S. and Canadian banks are closed in Columbus’s observance and thanksgiving holiday. Therefore, most of the focus should stay on the technical side of the market today.

Economic Events to Watch Today  


 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18296 after placing a high of 1.18308 and a low of 1.17478. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD raised to its more than 2-weeks highest level on Friday on the back of lifted sentiment in the market after the renewed hopes for a U.S. stimulus package. EUR/USD pair rose on Friday despite the increasing tensions regarding the coronavirus pandemic.

The second wave of the COVID-19 pandemic in the Eurozone forced governments across the region to start implementing fresh restrictions mostly on leisure activities like bars, pubs, and restaurants. The Chief Economist of European Central Bank, Philip Lane, said that the next phase of coronavirus would be tougher for the European economy.

Lane said that the central bank would wait to see the government’s response to the coronavirus challenge as they publish their budgets for 2021; by saying so, he dampened expectations for fresh stimulus from the ECB by this month. The news that the ECB will not announce any stimulus measure by the end of this month despite rising coronavirus cases raised the risk sentiment and pushed EUR/USD pair on board. 

On the other hand, Trump, who said earlier this week that talks between Republicans & Democrats will be halted until elections, said that he wanted a bigger stimulus package for Americans on Friday. The U-turn by Trump for the coronavirus stimulus package came in after polls suggested a victory of Joe Biden in upcoming elections due to his support for the big stimulus package.

The talks between Nancy Pelosi and Steven Mnuchin resumed on Friday after Trump gave the go-ahead stimulus package. These developments raised risk sentiment in the market as the hopes increased that a package will be delivered before the elections. This, in turn, weighed on the U.S. dollar, and that ultimately pushed the already rising EUR/USD pair on the upside towards more than 2—weeks highest level.

Meanwhile, at 11:45 GMT, the French Industrial Production for August declined to 1.3% from the expected 2.1% and weighed on Euro on the data front. At 13:00 GMT, the Italian Industrial Production for August raised to 7.7% from the expected 1.3% and supported the single currency that ultimately added further in the EUR/USD pair upside momentum.

From the U.S. side, the Final Wholesale Inventories dropped to 0.4% from the forecasted 0.5% and supported the U.S. dollar that capped further gains in EUR/USD pair.

Daily Technical Levels

Support Resistance

1.1734     1.1784

1.1708     1.1808

1.1684     1.1834

Pivot point: 1.1758

EUR/USD– Trading Tip

On Monday, the EUR/USD is trading with a bullish bias around 1.1798 level, having an immediate resistance at 1.1832 level. A bullish crossover of 1.1832 level may lead the EUR/USD pair further higher until the 1.1870 mark. At the same time, the support continues to stay at 1.1798 level. The violation of the symmetric triangle pattern nad an upward channel is supported by bullish bias in the EUR/USD pair today. Let’s consider taking a buy trade over 1.1798 level today. 


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.30441 after placing a high of 1.30489 and a low of 1.29135. Overall the movement of the GBP/USD pair remained bullish throughout the day. The GBP/USD pair moved to its one month’s highest level on Friday after the U.S. dollar came under pressure over fresh stimulus hopes. In the absence of any latest development surrounding the Brexit talks, the GBP/USD pair continued following the U.S. dollar’s movements.

Wall Street’s main indexes remained in the positive territory for the third straight day on Friday after Trump gave the go-ahead for talks over the next round of the stimulus package. Earlier this week, Trump ordered to halt further talks with Democrats over the stimulus package till elections. But later, he decided sideways and said that he wanted a small stimulus package specifically for airline workers. And now, on Friday, Trump said that he wanted to give a big stimulus package to Americans before the elections. He proposed a $1.8 trillion package and approved further talks. The latest proposed package will include checks to individuals and an extension of the paycheck protection program.

The U.S. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi resumed talks on the revised package of 1.8 trillion dollars on Friday. This gave hopes that the package will be delivered before elections and supported the GBP/USD pair’s risk sentiment.

On the Brexit front, on Friday, an E.U. diplomat said that European Union chief Brexit negotiator, Michel Barnier wanted a few more concessions from Britain before entering the last intense phase of negotiations on a trade deal.

The two main negotiators from the E.U. side, Barnier and David Frost, said they were inching towards a deal. However, they also said that important gaps remained on fishing, level playing field, and governance issues. 

As we already know, the PM Boris Johnson has given the 15th October deadline to reach a deal, and given this deadline, before reaching the final round of make-or-break negotiations, Barnier has asked for a few more concessions. It remains that Johnson will allow for a further concession or not; however, both sides have confirmed that they were prepared for a no-deal scenario if needed. 

Furthermore, France has sharpened its tone on fishing rights and warned that an agreement on the fishing issue with the United Kingdom would be an integral part of the Brexit deal, and its proposals have fallen short. The French Minister of the Sea Annick Girardin said that the U.K. had made unacceptable proposals, and the nation’s fisherman has said in response that they would prefer no-deal over a bad one.

On the data front, at 11:00 GMT, the Construction Output for August dropped to 3.0% against the forecasted 5.1% and weighed on GBP/USD pair. August’s GDP also fell to 2.1% from the forecasted 4.6% and weighed on GBP/USD pair. 

The Goods Trade Balance came in line with the expectations of -9.0B. The Index of Services for the quarter raised 7.1% from the forecasted 7.0% and supported British Pound. The Industrial Production for August decreased to 0.3% from the projected 2.6% and weighed on GBP. The Manufacturing Production for August also declined to 0.7% from the projected 3.2% and weighed on British Pound. Despite poor than expected macroeconomic data from Great Britain, the GBP/USD pair raised in the market to its one month’s highest level on the back of improved risk sentiment amid Brexit and U.S. stimulus package developments.

Daily Technical Levels

Support Resistance

1.2921     1.3013

1.2863     1.3049

1.2828     1.3106

Pivot Point: 1.2956

GBP/USD– Trading Tip

The GBP/USD is trading at 1.3043 level, holding right below an immediate resistance level of 1.3063. The resistance is extended by an upward channels’ trendline on the two-hourly timeframes. Below the 1.3063 resistance level, the Sterling can trigger selling until the 1.3003 level and 1.2959 level. On the higher side, a bullish breakout of 1.3063 levels can trigger buying until the 1.3127 level. The fundamental side is muted today, and the U.S. banks are closed in the observance of Columbus day; therefore, we may experience thin volatility 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.603 after placing a high of 106.039 and a low of 105.579. Overall the movement of the USD/JPY pair remained bearish throughout the day. On Friday, the USD/JPY pair dropped and reversed its direction as the U.S. President Donald Trump took a U-turn from his earlier statements related to the U.S. stimulus package. The market moved against the U.S. dollar and made it weak across the board after hopes for Joe Biden to win the election increased, and Trump approved stimulus talks.

On Friday, the U.S. President Donald Trump said he wanted a new and big stimulus package than earlier proposed in a radio interview. He said that he wanted to provide checks to Americans before elections. Whereas, earlier this week, Trump said that he wanted to halt further talks till elections, and after that, he said that he wanted a small stimulus package for airline workers.

The U-turn by U.S. President over the stimulus package gave a boost to risk sentiment as it increased the hopes that the package will be delivered before the elections. This weighed on the U.S. dollar, and the pair USD/JPY suffered on Friday. Furthermore, on Friday, Larry Kudlow said that Trump had approved the talks for a new proposed stimulus package worth $1.8 trillion. The talks for it have resumed on Friday between U.S. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi. 

On the data front, at 04:30 GMT, the Average Cash Earnings for the year declined to -1.3% against the forecasted -1.2% and weighed on the Japanese Yen. The Household Spending for the year from Japan also dropped to -6.9% from the forecasted -6.6% and weighed on the Japanese Yen. Despite Japan’s negative macroeconomic data, the USD/JPY pair remained bearish throughout the day amid broad-based U.S. dollar weakness. From the U.S. side, the Final Wholesale Inventories for August were released at 19:00 GMT that dropped to 0.4%from the projected 0.5% and supported the U.S. dollar. However, traders ignored the U.S. data as the focus was shifted completely towards the U.S. stimulus developments.

On the other hand, the United Kingdom’s coronavirus situation worsened as one of the U.K.’s top scientists warned that the country was at a tipping point. He said that more deaths from the viruses would follow a rise in cases in the coming weeks. He added that country was facing a similar situation that it last seen in March. The rising number of coronavirus cases worldwide raised safe-haven appeal and supported the Japanese Yen and weighed on the USD/JPY pair.

Daily Technical Levels

Support Resistance

105.53    105.80

105.42     105.98

105.25     106.08

Pivot point: 105.70

USD/JPY – Trading Tips

The USD/JPY traded sharply bearish to drop from 105.900 level to 105.450 mark. Most of the selling triggered after the USD/JPY violated an upward channel at 105.900 level. Currently, the USD/JPY pair is trading at 105.459 level, the support level that’s extended by double bottom level. A bearish breakout of 105.450 level may drive further selling until the 105.070 support level as the MACD, and the 50 periods EMA are in support of selling bias today. Let’s consider opening sell trade below 105.40 level today. Good luck!  

Categories
Forex Signals

USD/JPY Violated Downward Trendline – Quick Update on Signal! 

The USD/JPY currency pair managed to extend its previous session gains and took further bids around well above the mid-105.00 level after posting a one-week low of 104.95 on Friday. However, the currency pair’s sentiment was being supported by the upbeat market mood, which tends to undermine the safe-haven Japanese yen and contributed to the currency pair gains. Apart from this, the Bank of Japan (BOJ) Governor Haruhiko Kuroda shared a negative picture over Japan’s economy and inflation, which added further pressure on the Japanese yen and provided a further boost to the currency pair. 

On the contrary, the broad-based U.S. dollar, triggered by the low safe-haven demand in the market, becomes the key factor that capped further upside momentum for the currency pair. Currently, the USD/JPY currency pair is currently trading at 105.65 and consolidating in the range between 105.28 – 105.68.

As we already mentioned, market trading sentiment has been gaining positive traction since the day started and supported by the optimism over the U.S. President Donald Trump’s recovery from COVID-19. It should be noted that the Trumps’ doctors told that President Trump was doing well and could be discharged from his military hospital as soon as Monday. This positive news urged investors to withdraw their money from safe-haven assets. As in result, undermined the safe-haven Japanese yen and contributed to the currency pair gains.

Apart from this, the updates suggest that the national leader spoke to U.S. Treasury Secretary Steve Mnuchin over the weekend for the COVID-19 stimulus, which raised hopes that deadlock could end sooner. This also favored the risk-tone sentiment and undermined the safe-haven Japanese yen. 

Across the pond, the currency pair’s gains were further bolstered after the Bank of Japan (BOJ) Governor Haruhiko Kuroda shared the gloomy picture over Japan’s economy, which adds additional pressure around the JPY provided further boost to the currency pair. As per the latest report by Bank of Japan (BOJ) Governor Haruhiko Kuroda, “Japanese economy in severe condition but picking up.” He further added, “Uncertainties surrounding the outlook remain extremely high.”

However, the market trading sentiment was unaffected by the fears of fresh lockdown restrictions in Britain and Europe. Whereas, the usage of dexamethasone in President Trump’s treatment keep questioning the market optimists.

At the USD front, the broad-based U.S. dollar extended its previous session bearish bias and failed to gain any positive traction during the European trade Monday amid risk-on market sentiment. Apart from this, the greenback losses could also be associated with Friday’s released mixed U.S. data, which instantly raised doubts over the U.S. economic recovery. However, the U.S. dollar losses might stop bulls from placing any strong position and keep a lid on any further gains for the USD/JPY pair. Whereas, the U.S. Dollar Index Futures that tracks the greenback against a basket of other currencies dropped by 0.13% to 93.787 by 10:12 PM ET (2:12 AM GMT).

Moving ahead, the market traders will keep their eyes on the U.S. economic docket, which will show the release of the ISM Non-Manufacturing PMI. This data might affect the U.S. dollar price dynamics and provide fresh direction for the pair. 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 103.88

S2 104.6

S3 104.98

Pivot Point 105.32

R1 105.7

R2 106.05

R3 106.77

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

Entry Price – Buy 105.602

Stop Loss – 105.202

Take Profit – 106.002

Risk to Reward – 1:1

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

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

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

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

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

Categories
Forex Market Analysis

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

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

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

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

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

1.1724     1.1739

1.1715     1.1745

1.1709     1.1754

Pivot point: 1.1730

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

1.2912     1.2948

1.2896     1.2968

1.2876    1.2984

Pivot point: 1.2932

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

105.34     105.65

105.16     105.78

105.04     105.96

Pivot point: 105.47

USD/JPY – Trading Tips

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

 

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Forex Market Analysis

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

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

Economic Events to Watch Today  

 


 


EUR/USD – Daily Analysis

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

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

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

1.1709      1.1851

1.1649      1.1933

1.1568      1.1993

Pivot Point: 1.1791

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

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

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

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

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

 Daily Technical Levels

Support Resistance

1.2737      1.2930

1.2659      1.3045

1.2544      1.3123

Pivot point: 1.2852

GBP/USD– Trading Tip

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

 


USD/JPY – Daily Analysis

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

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

104.44      105.10

104.15      105.47

103.78      105.76

Pivot point: 104.81

USD/JPY – Trading Tips

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

Good luck! 

 

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Forex Market Analysis

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

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

Economic Events to Watch Today  

 

 

EUR/USD – Daily Analysis

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

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

1.1772 1.1889

1.1696 1.1930

1.1655 1.2007

Pivot point: 1.1813

EUR/USD– Trading Tip

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

GBP/USD – Daily Analysis

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

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

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

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

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

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

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

 Daily Technical Levels

Support Resistance

1.2890 1.3025

1.2810 1.3080

1.2756 1.3160

Pivot point: 1.2945

GBP/USD– Trading Tip

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

 

USD/JPY – Daily Analysis

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

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

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

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

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

Daily Technical Levels

Support Resistance

104.44 105.10

104.15 105.47

103.78 105.76

Pivot point: 104.81

USD/JPY – Trading Tips

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

Good luck! 

 

 

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Forex Signals

USD/JPY Downward Channel In-Play – Quick Update on Signal! 

The USD/JPY stopped its previous-day bearish bias and picked up some bids around the 104.80 level, mainly after the downbeat prints of Japan’s National Consumer Price Index (CPI) for August eventually undermined the Japanese yen currency and extended support to the currency pair. 

The currency pair dropped to the lowest since July 31, the previous day after the Bank of Japan (BOJ) upwardly revised the economic outlook. Thus, the currency pair failed to break its previous day thin trading range and still hovering below the 105.00 marks. Apart from this, the reason for the pair’s bearish bias could also be associated with the risk-off market sentiment, driven by the US-China tussle and Brexit concern, which tend to underpin the Japanese yen currency. 

Meanwhile, the broad-based U.S. dollar weakness, triggered by the disappointing U.S. employment data, could also be considered the key factor that kept the lid on any additional gains in the currency pair. Currently, the USD/JPY currency pair is currently trading at 104.81 and consolidating in the range between 104.67 – 104.88.

At the data front, Japan’s August month’s National CPI dropped below 0.6% forecast and 0.3% previous readouts to 0.2% YoY, it no news as the Asian major has historically been struggling with stagflation. 

Besides this, the risk sentiment favoring the pair’s sellers as S&P 500 Futures dropped by 0.10% intraday as Fed’s hint for another stress test for large banks and the U.K. scientist group’s push for another state lockdown. Furthermore, the worrisome headlines concerning the Brexit or the tension between the US-China, not to forget the rising coronavirus cases, weigh on the market trading sentiment.  

At the US-China front, the tensions between the United States and China picked up the further pace after the American Undersecretary for Economic Affairs Keith Krach’s scheduled visit to Taiwan. Moreover, the friction was further bolstered by China’s state media’s comments that directed warned the U.S. with the “use non-peaceful and other necessary means to solve the Taiwan question once and for all.  

Additionally, weighing the market trading sentiment could be the fears of rising COVID-19 cases in the U.S., Europe, and some of the notable Asian nations like India, which fueling fears that the economic recovery could be halt.

At the USD front, the broad-based U.S. dollar failed to stop its early-day losses and took the further offer on the day as doubts persist over the global economic recovery from disappointing U.S. employment data witnessed statement data. Apart from this, another rout in U.S. tech stocks also undermined the U.S. dollar. However, the U.S. dollar losses could be considered the key factor that kept the pressure on any additional gains in the USD/JPY pair. Whereas, the U.S. Dollar Index, which tracks the greenback against a bucket of other currencies, dropped by 0.05% to 92.927 by 12:48 AM ET (5:48 AM GMT).

The employment data released on Thursday showed that initial jobless claims dropped slower than expected at the data front 860,000 claims were filed over the past week against the predicted 850,000.


Looking forward, the market traders will keep their eyes on the USD moves amid the lack of major data/events on the day. However, the U.S. Michigan Consumer Sentiment Index for September, which is expected 75 versus 74.1 prior, will likely help resolve near-term USD moves. Furthermore, the risk catalyst like geopolitics and the virus woes, not to forget the Brexit, will also be key to watch for the fresh direction.

Entry Price – Sell 104.651

Stop Loss – 105.051

Take Profit – 104.251

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 Signals

USD/JPY Extended Previous Session Losing Streak – Update on Singal! 

During Wednesday’s early European trading session, the USD/JPY currency pair failed to stop its Asian session bearish moves and dropped further near 105.30 level mainly due to the broad-based U.S. dollar weakness, triggered by the cautious mood of traders ahead of the Federal Open Market Committee (FOMC) meeting. Moreover, backed by the recently positive coronavirus (COVID-19) vaccine news, the upbeat market sentiment also weighed on the safe-haven U.S. dollar. 

Across the ocean, the currency pair’s losses were further bolstered after the upbeat Japanese Industrial Production details, which eventually underpinned the Japanese yen and contr3bited to the currency pair losses. Apart from this, the latest positive headline that the world’s 3rd-largest economy is gradually overcoming the coronavirus (COVID-19) pandemic also boosted the yen currency and dragged the currency pair down. On the contrary, the latest optimism over a potential vaccine for the highly contagious coronavirus disease keeps supporting the market trading sentiment, which undermined the safe-haven Japanese yen and became the key factor that cap further downside for the currency pair.  

Many factors tend to undermine the U.S. dollar. Be it the ongoing impasse over the next round of the U.S. fiscal stimulus or the upbeat market sentiment, not to forget traders’ cautious mood ahead of the Federal Open Market Committee (FOMC) meeting. However, the market trading sentiment was remained supported by optimism over a potential vaccine for the highly contagious coronavirus disease.

Meanwhile, the U.S. and China’s positive data, which suggests gradual recoveries in global economics, also boosted the market trading tone. Detail Suggested, China’s Industrial Production and Retail Sales surpassed forecasts for August, the U.S. NY Empire State Manufacturing Index also recovered to 17.00 and pleased the optimists. 

As in result, the broad-based U.S. dollar failed to keep its overnight gains and edged lower on the day mainly due to the risk-on market sentiment. Moreover, the U.S. dollar losses could also be associated with cautious sentiment ahead of the U.S. Federal Reserve’s policy meeting, which is scheduled to take place on the day. However, the losses in the U.S. dollar kept the USD/JPY currency pair under pressure.. Whereas, the U.S. Dollar Index Futures that tracks the greenback against a bucket of other currencies dropped by 0.03% to 93.085 by 9:76 PM ET (2:57 AM GMT), giving up some earlier gains.

The upbeat Industrial Production details remained supportive of the Japanese yen at home, which kept the currency pair down. At the data front, Japan’s August month Merchandise Trade Balance Total rose to ¥248.3 B versus ¥-37.5 B market consensus and ¥10.9 B (revised). Further details suggest the Imports dropped below -18% YoY forecast to -20.8, whereas Exports recovered from -16.1% to -14.8% in the reported month.

Besides, the positive news suggesting that the world’s 3rd-largest economy is gradually overcoming the coronavirus (COVID-19) pandemic also underpinned the Japanese yen. Across the pond, the upbeat market tone, supported by multiple factors, tends to undermine the safe-haven Japanese yen and becomes the key factor that helps the currency pair limit its deeper losses. 

Looking ahead, the Bank of Japan is also scheduled to announce its policy decision on Thursday, which will key to watch for the fresh direction in the pair. Meanwhile, the market traders will keep their eyes on Japan’s trade numbers and Aussie housing data. Whereas, investors are also looking to the U.S. Federal Reserve’s policy meeting, scheduled to take place on the day. Meanwhile, New Zealand’s Current Account and the Pre-Election Economic and Fiscal Update (PREFU) will also key to watch. All in all, the updates surrounding the Brexit, virus, and US-China tussle will not lose their importance. 


The USD/JPY currency pair has dropped sharply amid increased safe-haven appeal and weakness in the U.S. dollar. The pair fell from 105.800 to 104.860 level, and now it’s facing resistance at 105.285 level. On the lower side, the USD/JPY pair may drop until 104.800 and 104.318. Good luck! 

Entry Price – Sell 104.98

Stop Loss – 105.38

Take Profit – 104.58

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 Signals

USD/JPY Selling Bias Dominates – Quick Update on Signal! 

The USD/JPY closed at 105.730 after placing a high of 106.164 and a low of 105.547. The USD/JPY pair finally found some specific direction to follow and moved in the downward trend amid the broad-based U.S. dollar weakness. However, the improved risk sentiment around the market capped further downward movement in the currency pair.

The greenback came under selling pressure ahead of the U.S. Federal Reserve’s Open Market Committee’s meeting. The meeting is due to start on Tuesday and will conclude with the comments from Chairman Jerome Powell’s speech. The speech is expected to provide further decisions of the Federal Reserve related to average inflation targeting. The market participants are hoping that the Fed will remain dovish about its monetary policy on Wednesday.

The central bank seems to be satisfied with the interest rates being near-zero levels, and there will be no change in interest rates. However, the comments from Fed Chair related to further stimulus measures and monetary easing along with the inflation target will provide fresh clues about U.S. economic conditions. The U.S. dollar came under pressure as the House of Representatives have returned from summer break and the chances for the fifth round of stimulus measures to reach consensus have increased as talks would resume soon.

The weak U.S. dollar weighed heavily on the USD/JPY pair, and the pair dropped to 9 days the lowest level on Monday. Furthermore, the improved risk sentiment and the equity market also weighed heavily on the safe-haven Japanese Yen that provided some strength to the currency pair USD/JPY.

The U.S. equity rose on Monday after the Oxford University and AstraZeneca vaccine re-started its phase-3 trials and raised the hopes for economic recovery. The trials were paused due to some unexplained illness that was found in one of the participants last week. However, the trials were resumed and provided some strength to the USD/JPY pair.

Meanwhile, the statement by the World Health organization that in a single day, the record-high number of coronavirus cases were reported that raised fears for the resurgence of the coronavirus pandemic WHO reported that in the time of 24 hours, a record high of more than 307,000 cases was recorded globally which was the largest daily number since the pandemic started. This raised uncertainty in the market and supported the safe-haven Japanese yen that added further downward pressure on the USD/JPY pair.

On the data front, there was no release from the U.S. side, however, at 09:30 GMT, the Tertiary Industry Activity from Japan dropped to -0.5% in July from the forecasted 0.6% and weighed on the Japanese Yen. Whereas, at 09:33 GMT, the Revised Industrial Production from Japan in July rose to 8.7% from the forecasted 8.0% and supported the Japanese Yen that added further pressure on the USD/JPY pair on Tuesday.


The USD/JPY currency pair has dropped sharply amid increased safe-haven appeal and weakness in the U.S. dollar. The pair fell from 106 to 105.650 level, and now it’s facing resistance at 105.795 level. On the lower side, the USD/JPY pair may drop until 105.265.

Entry Price – Sell 105.574

Stop Loss – 105.974

Take Profit – 105.174

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, September 15 – Top Trade Setups In Forex – Series of Events in Focus! 

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

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.1835 1.1862 1.1894
1.1803 1.1921
1.1776 1.1954

EUR/USD– Trading Tip

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

GBP/USD – Daily Analysis

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

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

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

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

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

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

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

 Daily Technical Levels

Support Pivot Resistance
1.2774 1.2847 1.2919
1.2702 1.2992
1.2629 1.3063

GBP/USD– Trading Tip

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

USD/JPY – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
105.4500 105.8300 106.1200
105.1600 106.5000
104.7800 106.7800

USD/JPY – Trading Tips

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

 

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Forex Market Analysis

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

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

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

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

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

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.1770 1.1844 1.1888
1.1726 1.1962
1.1653 1.2006

EUR/USD– Trading Tip

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

GBP/USD – Daily Analysis

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

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

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

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

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

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

 Daily Technical Levels

Support Pivot Resistance
1.2706 1.2871 1.2969
1.2608 1.3134
1.2443 1.3232

GBP/USD– Trading Tip

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

USD/JPY – Daily Analysis

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

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

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

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

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

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

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


Daily Technical Levels

Support Pivot Resistance
105.9700 106.1400 106.3000
105.8200 106.4600
105.6500 106.6200

USD/JPY – Trading Tips

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

 

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Forex Market Analysis

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

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

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.1795 1.1820 1.1857
1.1758 1.1882
1.1733 1.1919

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

 Daily Technical Levels

Support Pivot Resistance
1.3079 1.3125 1.3196
1.3008 1.3242
1.2962 1.3313

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

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

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

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

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


Daily Technical Levels

Support Pivot Resistance
105.9500 106.2700 106.6800
105.5500 106.9900
105.2300 107.4000

USD/JPY – Trading Tips

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

 

Categories
Forex Market Analysis

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

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

Economic Events to Watch Today  

EUR/USD – Daily Analysis

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

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.1802 1.1834 1.1879
1.1757 1.1911
1.1726 1.1956

EUR/USD– Trading Tip

As expected, the EUR/USD bounced off over the support level of 1.1795, and now it’s heading further higher until the next target of 1.1890. The pair may find an immediate resistance at 1.1860 level. Conversely, the EUR/USD may find support at 1.1808 and 1.1780 levels. NFP will determine further price action in the pair. 

GBP/USD – Daily Analysis

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

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

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

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

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

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

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

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

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

 Daily Technical Levels

Support Pivot Resistance
1.3228 1.3293 1.3344
1.3177 1.3409
1.3112 1.3460

 GBP/USD– Trading Tip

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

USD/JPY – Daily Analysis

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

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

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

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

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

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

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

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


 

Daily Technical Levels

Support Pivot Resistance
105.9300 106.2500 106.5000
105.6800 106.8200
105.3700 107.0700

USD/JPY – Trading Tips

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

Categories
Forex Market Analysis

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

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

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

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

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.1805 1.1868 1.1914
1.1759 1.1977
1.1696 1.2024

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

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

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

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

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

 Daily Technical Levels

Support Pivot Resistance
105.9000 106.1100 106.3700
105.6400 106.5800
105.4300 106.8400

 GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.3288 1.3346 1.3409
1.3225 1.3467
1.3167 1.3530

USD/JPY – Trading Tips

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

Categories
Forex Signals

USD/JPY Violates Symmetric Triangle Pattern – Buy Signal in Play! 

The USD/JPY has violated the ascending triangle pattern at 106.08 level, and it may head further higher until the next target level of 106.500 level. On the data front, at 04:30 GMT, the Unemployment Rate from Japan dropped to 2.9% from the expected 3.0% in July and supported the Japanese Yen. At 04:50 GMT, the Capital Spending from Japan dropped by -11.3% against the estimated -4.0% and weighed heavily on the Japanese Yen. At -5:30 GMT, the Final Manufacturing PMI for August from Japan expanded to 47.2 against the projected 46.6 and supported the Japanese Yen.

The strong data from Japan supported the safe-haven Japanese Yen and weighed on the USD/JPY pair that kept the currency pair’s gains on Tuesday. Meanwhile, from the U.S. side, the Final Manufacturing PMI in August dropped to 53.1 from the anticipated 53.6 and weighed on the U.S. dollar. Whereas, the highly awaited ISM Manufacturing PMI for August that was released at 19:00 GMT, advanced to 56.0 against the estimated 54.6, and supported the U.S. dollar that helped the USD/JPY pair’s bullish trend on Tuesday.

Moreover, the Construction Spending from the U.S. in July declined to 0.1% from the expected 1.0% and weighed on the U.S. dollar. The ISM Manufacturing Prices in August increased to 59.5 from July’s 53.2. The Wards Total Vehicle Sales from the U.S. came in as 15.2M against the expected 15M and supported the U.S. dollar added in the gains of USD/JPY.


Furthermore, on Tuesday, the U.S. dollar also gained some traction after the comment from the Fed Governor Lael Brainard, who said that to overcome the impact of coronavirus from the economy, the central bank would have to roll out new efforts. She also said that the Fed should adopt an aggressive approach to live up to its promise of stronger job growth and higher inflation. She also stressed the important role massive asset purchases would play in achieving the new policy shift’s targeted goals.

The USD/JPY prices may continue to trade higher until the 106.550 level. The pair has violated the ascending triangle pattern at 106, and above this, the USD/JPY may trade bullish. The MACD and RSI are both suggesting a buying trend. Let’s consider taking buying trade today. 

Entry Price – Buy 106.199

Stop Loss – 105.799

Take Profit – 106.599

Risk to Reward – 1:1

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

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

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Forex Market Analysis

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

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

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.1870 1.1941 1.1981
1.1829 1.2053
1.1758 1.2093

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

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

 Daily Technical Levels

Support Pivot Resistance
105.6400 105.9000 106.2100
105.3300 106.4700
105.0700 106.7800

 GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.3330 1.3407 1.3459
1.3279 1.3535
1.3202 1.3587

USD/JPY – Trading Tips

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

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Forex Market Analysis

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

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

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.1891 1.1929 1.1975
1.1846 1.2012
1.1808 1.2058

 EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

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

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

 Daily Technical Levels

Support Pivot Resistance
1.3314 1.3355 1.3409
1.3260 1.3450
1.3219 1.3504

 GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
105.4200 105.7600 106.2300
104.9500 106.5700
104.6200 107.0300

USD/JPY – Trading Tips

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

Categories
Forex Signals

USD/JPY Heads for 61.8% Fibonacci Retracement 

During Monday’s European trading session, the USD/JPY currency pair extended its previous session gains. They remained closer to 106.00 level due to the risk-on market tone, backed by the enthusiasm over a potential vaccine and medicine for the extremely contagious coronavirus disease. As well as, the better-than-expected Chinese Manufacturing and Services PMI data also played its positive role in underpinning the market tone, which eventually weakened the demand for the safe-haven Japanese yen. The receding worries over the Japanese political scenario could also be another factor involved in currency pair losses. 

On the contrary, the broad-based U.S. dollar weakness, triggered by the risk-on market sentiment and downbeat prints of America’s Core PCE data, became the key factor that capped further upside momentum for the currency pair. In the meantime, the mixed Japan data was largely ignored by the currency pair bulls. At this moment, the USD/JPY currency pair is currently trading at 105.92 and consolidating in the range between 105.30 – 105.97.

At the data front, the preliminary Industrial Production climbed significantly past-1.2% forecast and 1.9% before print the 8.0% mark on MoM. Meanwhile, the annual figures were downbeat as 16.1% contraction against -15.7% expected. Moreover, Retail Sales fell 3.3% on MoM and 2.8% on YoY against 8.0% and 2.4% respective forecasts.

Apart from this, the reason for the upbeat market sentiment could be associated with the release of better-than-expected Chinese Manufacturing and Services PMI prints, which eventually raised hopes about the global recovery from the pandemic. However, the risk sentiment was further bolstered by the headlines that suggested a rush towards a vaccine. Besides this, the U.S. stimulus package’s probabilities also boosted the risk sentiment, which tends to weaken the safe-haven Japanese yen. The opposition Democratic Party voted in the favor to take a $1.3 trillion offer, which kept the market traders satisfied. On the contrary, the market trading sentiment relatively unaffected by the long-lasting US-China tussle. 

Also supporting the market risk-tone was Powell’s new monetary policy framework, which fueled expectations of an extended period of low-interest rates and weighed on the U.S. dollar.

As a result of the upbeat market sentiment, the broad-based U.S. dollar failed to gain any positive traction on the day. The losses could also be associated with the Fed Chair Jerome Powell’s dovish signals at the Jackson Hole Symposium. However, the losses in the U.S. dollar became the key factor that kept the currency pair’s gain limited. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies dropped by 0.09% to 92.293 on the day.

 

Looking ahead, the market traders will keep their eyes on the speech by Federal Reserve Governor Richard Clarida. Japan’s Final Manufacturing PMI will also be key to watch. In the meantime, the updates surrounding the fresh Sino-US tussle, this time over the South China Sea and the coronavirus (COVID-19) updates, could not lose their importance.


The USD/JPY is trading with a bullish bias at 106; it’s expected to trade higher until 50% and 61.8% Fibonacci retracement at 106.100 and 106.300 levels. The MACD is also a signaling buying trend in the USD/JPY pair. We have already closed the buying signal in green pips as the market is lacking volatility. Let’s brace to buy again over 105.740 level today. Good luck! 

Categories
Forex Market Analysis

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

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

Economic Events to Watch Today  

 


 

EUR/USD – Daily Analysis

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.1902 1.1904 1.1908
1.1898 1.1910
1.1895 1.1914

 EUR/USD– Trading Tip

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

GBP/USD – Daily Analysis

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

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

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

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

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

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

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

 Daily Technical Levels

Support Pivot Resistance
105.3400 105.5700 105.7800
105.1300 106.0100
104.8900 106.2300

 GBP/USD– Trading Tip

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

USD/JPY – Daily Analysis

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.3339 1.3349 1.3364
1.3325 1.3373
1.3315 1.3388

USD/JPY – Trading Tips

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

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Forex Market Analysis

Daily F.X. Analysis, August 27 – Top Trade Setups In Forex – U.S. Fed Chair Powell Speaks! 

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

Economic Events to Watch Today  

 


  

EUR/USD – Daily Analysis

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.1787 1.1814 1.1856
1.1744 1.1884
1.1717 1.1926

 EUR/USD– Trading Tip

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

GBP/USD – Daily Analysis

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

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

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

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

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

At the USD front, the broad-based U.S. dollar was down on Thursday morning in Asia ahead of U.S. Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole symposium later. Whereas, the losses in the U.S. dollar become the key factor that kept the GBP/USD currency pair higher. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies dropped by 0.12% to 92.882 by 11:59 PM ET (4:59 AM GMT).

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

  

 

Daily Technical Levels

Support Pivot Resistance
1.3144 1.3182 1.3247
1.3079 1.3285
1.3040 1.3351

 GBP/USD– Trading Tip

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

USD/JPY – Daily Analysis

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

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

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

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
105.7600 106.1600 106.3700
105.5500 106.7700
105.1500 106.9800

USD/JPY – Trading Tips

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

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

 

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Forex Market Analysis

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

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

Economic Events to Watch Today   

 

 


EUR/USD – Daily Analysis

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.1773 1.1819 1.1857
1.1735 1.1903
1.1689 1.1942

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

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


Daily Technical Levels

Support Pivot Resistance
1.3021 1.3073 1.3116
1.2977 1.3169
1.2925 1.3212

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
106.6400 106.8500 107.1400
106.3500 107.3500
106.1400 107.6400

USD/JPY – Trading Tips

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

Categories
Forex Market Analysis

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

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

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.1704 1.1756 1.1790
1.1670 1.1842
1.1618 1.1876

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.3016 1.3074 1.3107
1.2983 1.3165
1.2925 1.3197

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
106.0400 106.3700 106.8200
105.5900 107.1500
105.2600 107.6000

USD/JPY – Trading Tips

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

Categories
Forex Market Analysis

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

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

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

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

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.1713 1.1758 1.1780
1.1691 1.1825
1.1646 1.1848

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.3024 1.3064 1.3110
1.2978 1.3150
1.2938 1.3196

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
105.6900 105.9500 106.1900
105.4500 106.4500
105.1900 106.7000

USD/JPY – Trading Tips

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

Categories
Forex Market Analysis

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

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

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.1802 1.1854 1.1915
1.1740 1.1968
1.1688 1.2029

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.3060 1.3111 1.3166
1.3005 1.3217
1.2954 1.3271

GBP/USD– Trading Tip

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

USD/JPY – Daily Analysis

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
105.3100 105.6000 105.8800
105.0300 106.1700
104.7400 106.4500

USD/JPY – Trading Tips

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

Categories
Forex Signals

USD/JPY Breaking Below Support Level – Update on Trading Signal!

The USD/JPY failed to extend its previous session bullish moves and witnessed some selling moves around 105.55 level mainly due to the broad-based U.S. dollar weakness. The worries triggered that the second wave of COVID-19 cases in the United States could ruin the recovery in the world’s biggest economy. Also weighing factor for the greenback was a failure over the much-awaited stimulus. The risk-on market sentiment (backed by the positive reports about the coronavirus treatment and hopes of the Sino-American trade discussion), undermined the safe-haven Japanese yen, which become the key factor that helped the currency pair to limits its deeper losses. The fresh reports about the further relief employment subsidy by the Japanese government largely ignored by the currency pair traders, at least for now. Currently, the USD/JPY currency pair is currently trading at 105.69 and consolidating in the range between 105.52 – 105.80.

Apart from virus woes, the impasse over the next round of the U.S. fiscal stimulus also exerted downside pressure on the U.S. dollar and contributed to the currency pair losses. The U.S. lawmakers are still considerably apart to agree on the deal, and the discussions became more difficult after unemployment claims benefits expired last week. Considering the uncertain situation, the House Speaker Nancy Pelosi blamed U.S. President Donald Trump for the continuous suspension on the phase 4.0 COVID-19 relief package.

The broad-based U.S. dollar edged lower on the day as the virus woes continuously destroying hopes for a quick economic recovery, witnessed by the yesterday’s downbeat U.S. job data. This, in turn, was seen as major factors that continued weighing on the greenback. However, the losses in the U.S. dollar kept the USD/JPY currency pair under pressure. Whereas, the U.S. Dollar Index that tracks the U.S. dollar against a bucket of other currencies dropped by 0.09% to 93.148 by 10 AM ET (3 AM GMT).

At the US-China front, the rising tensions between the United States and China continued to pick up the pace after the U.S. President Donald Trump banned the TikTok Chinese app in the U.S. while saying if the dragon nation wants to re-active this app in America, then the owner of this app will be American. Despite this on-going tussle, the policymakers from both sides are set for a meeting on August 15 about the trade deal, which supports the market risk sentiment and helped pair to limit its deeper losses by undermining the safe-haven Japanese yen.

However, the upbeat market was further supported by the upbeat prints of U.S. Factory Orders and the stabilization of the virus numbers from the U.S. and Australia. The latest positive updates about the coronavirus also exerted a positive impact on the trading sentiment and became the key factor that kept the lid on any further losses in the currency pair. It is worth reporting that the transfusions of blood plasma rich, with antibodies from recovered COVID-19 patients, received by hospitalized patients decreased their death rate by about 50%.

Across the Pound, the Japanese labor ministry official told that the Japanese government is thinking of extending its coronavirus relief employment subsidy to support companies badly hit by the coronavirus. By the way, this news was largely ignored by the currency pair traders.


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

Entry Price – Sell 105.532
Stop Loss – 105.932
Take Profit – 105.132
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, August 05 – Top Trade Setups In Forex – Advanced NFP In Focus! 

We have a series of low and medium impact events coming ahead, and the focus will be on the Eurozone’s Services PMI, U.S. Advance NFP, and U.S. ISM non-manufacturing events. The U.S. events are forecasted to be negative but positive data may drive selling trend in gold; let’s brace for it.

Economic Events to Watch Today  

    

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18024 after placing a high of 1.18057and a low of 1.17211. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD pair climbed to 1.1800 level from 1.17200 level on Tuesday after the U.S. Dollar Index fell by 0.1% to 93.45 level. However, the U.S. dollar index spent most of the day in positive territory but failed to keep its gains. The U.S. Treasury yields were lower on Tuesday, and the equity prices were high that weighed on the U.S. dollar. The 10-year U.S. Treasury bond yield was down to 0.513% level, the lowest level since March.

The weakness in the U.S. dollar was the main driver of the EUR/USD pair on Tuesday. On the data front, the IBD/TIPP Economic Optimism rose to 46.8 from the expected 45.3 and supported the U.S. dollar. The Factory Orders from June were also increased to 6.2% from the forecasted 5.1% and supported the U.S. dollar.

From the European side, the French Government Budget Balance showed a deficit of 124.9 B in June as compared to the deficit of 117.9 B in May. At 12:00 GMT, the Spanish Unemployment Change came in as -89.8K against the forecasted 19.5K and supported EUR. At 14:00 GMT, the Producer Price Index for June surged to 0.7% against the expected 0.6% and supported EUR.

The European side’s macroeconomic data came in favor of the EUR/USD pair and took its prices above the 1.1800 level. Meanwhile, on Tuesday, the U.S. Congress Senate Democratic leader Chuck Schumer said that talks with the White House were finally moving in the right direction. However, they still were far apart on some issues. The gap between the two parties was about priorities and scale. Even though the difference was also mentioned, investors cheered the news that the talks were heading in the right direction and boosted their mood.

The equity prices rose, and the U.S. dollar suffered as the issuance of new stimulus weighed on the U.S. dollar. The weakness of the U.S. dollar ad rise in equity prices gave a push to EUR/USD pair. This Wednesday, the market will release the final versions of its July Services PMI for most major economies that are mostly expected to suffer upward revisions from preliminary estimates. E.U. will also reveal Retail Sales data for June. While the U.S. will release the ADP survey on private employment for July and the Non-ISM Manufacturing PMI. Traders will keep a close watch on both releases.

Daily Technical Levels

Support Pivot Resistance
1.1707 1.1752 1.1808
1.1651 1.1853
1.1605 1.1909

EUR/USD– Trading Tip

The EUR/USD shows another round of buying to trade at 1.1810 level. A recent breakout of the 1.1800 level is likely to lead EUR/USD prices further higher until 1.1849 and 1.1910 level. However, the support may be found around 1.1795 and 1.1760 area. Bullish bias will be stronger over the 1.1820 breakouts. The RSI and MACD are holding in the bullish zone while the 50 periods EMA is also suggesting potential for a bullish trend continuation today.


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.30701 after placing a high of 1.31079 and a low of 1.29810. Overall the movement of GBP/USD pair remained flat throughout the day. The pair GBP/USD reached a lower level of 1.2980, but it recovered from that level to settle once again around 1.3070 level in the late session. The decline and the later recovery was once again about the U.S. dollar as investors continued to ignore U.K. news and focused on USD news.

The U.S.’s macroeconomic data about factory orders in June rose to 6.2% from the anticipated 5.1% and supported the U.S. dollar that kept the GBP/USD pair under pressure.

However, the U.S. Senate Democratic leader’s latest statement that both Republicans & Democrats were moving in the right direction regarding the U.S. stimulus package weighed on the U.S. dollar. The U.S. Dollar Index dropped to 93.4 level, and the U.S. Treasury yield for a 10-year bond also dropped. Whereas, the equity prices rose that weighed further on the U.S. dollar.

On the other hand, the lack of progress in trade talks between the E.U. & the U.K. has shifted the attention to other economies. As the kingdom has started talks with the United States, that has shown little progress.

Furthermore, Toshimitsu said on Tuesday that Japan’s foreign minister would visit the U.K. this week to meet his counterpart to wrap up talks over a free-trade agreement between both countries.

However, earlier on the day, UK PM Boris Johnson announced another round of stimulus focused on the home construction and infrastructure to boost the economy. The suggested investment of around 900 million pounds out of 360 million pounds will be allocated towards delivering 26,000 new homes on brownfield land.

The demand for Sterling was also cooled down after the latest lockdown was imposed in the London area amid the resurgent coronavirus cases.

Meanwhile, considering the possible delay at the customs union’s border after leaving the E.U.’s single market, the U.K. government issued a letter in writing to pharmaceutical companies urging them to stockpile medicine for next year.

The health department advised firms to stockpile six weeks’ worth of supplies for the end of the Brexit transition period. However, the pharmaceutical industry has already warned earlier this year that COVID-19 had used up entirely some supplies.

Besides, the Boris Johnson’s government was resurrecting a plan to turn a 15 mile stretch of motorway into a contraflow system to be prepared for delays at Britain’s border with the European Union in early next year.

Moreover, China’s ambassador to the United Kingdom said that China wanted the UK to be a friend, but if the U.K. wants to make China a hostile country, then it will have to bear the consequences. This statement was followed by the move from PM Boris Johnson in which he announced plans to ban equipment purchases from the Chinese telecommunication group Huawei on espionage concerns. There was no reason for a directional move in the GBP/USD pair, and that is why the currency pair remained flat throughout the day on Tuesday.

Daily Technical Levels

Support Pivot Resistance
1.2863 1.2908 1.2978
1.2792 1.3024
1.2747 1.3094

GBP/USD– Trading Tip

The GBP/USD is trading at 1.3085 level, holding right below the triple top resistance area of 1.3101 level while the bullish breakout of 1.3105 can drive more buying in the GBP/USD pair. On the higher side, the GBP/USD may find resistance at 1.3175, while support can be found around 1.3056 and 1.3022 level. Let’s keep an eye on 1.3125 to extract a bearish bias in the GBP/USD pair today. A bearish breakout of 1.3050 can drive more selling until 1.3005.


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.716 after placing a high of 106.193 and a low of 105.635. Overall the movement of the USD/JPY pair remained bearish throughout the day. 

The pair USD/JPY dropped on Tuesday amid the progress in a new stimulus package from the U.S. Congress. The U.S. Dollar Index was down by 0.20% on Tuesday at 93.4 level, and the U.S. treasury yield was also down to its multi-month low of 0.51%.

The U.S. Senate Democratic leader Chuck Schumer said that negotiations with the White House were finally moving in the right direction, but they still were far apart on some issues. He said that the difference between the two parties on the U.S. Stimulus package was about priorities and scale.

Investors ignored the differences part of the statement and focused more on the progress in talks part, and hence, the U.S. dollar suffered. The USD/JPY dropped below 106 level as the cost of supporting the U.S. economy through its struggles to contain the pandemic was under discussion.

At the beginning of the day, Japan published Tokyo Inflation data for July, which rose to 0.4% from the estimated 0.2% and supported the Japanese Yen. The Monetary Base from japan also rose to 9.8% from the forecasted 7.1% and supported the Japanese Yen. Japan’s stronger than expected data weighed on the USD/JPY pair and dragged it below 106 level on Tuesday.

On the US-China front, to assess China’s efforts to fulfill the promises made in the bilateral trade agreement signed in January, the U.S. & China have agreed to conduct high-level talks on August 15. The relations between the U.S. 7 China have been deteriorated because of many issues, including the coronavirus outbreak, Hong Kong, and human rights abuses in western China. The only matter for mutual concern between both countries seems to be like the trade deal and assessed in mid-August.

Moreover, Satya Nadella, the Chief Executive of Microsoft Corp., has signed an agreement to take over the U.S. operations of the TikTok app. The Microsoft Corp. and the Chinese parent company of TikTok, named ByteDance Ltd., had a deal on Tuesday that would allow Microsoft to run TikTok operations in Canada, US, Australia, and New Zealand. This agreement satisfied both companies & their shareholders and the two governments that are under bitter competition for technological clout.

On the other hand, this Wednesday, Japan will release the final July Bank Services PMI, and the Bank of Japan’s Governor Kuroda will give a speech about central banking in the coronavirus era. From the U.S., the ADP Non-Farm Employment Change and ISM Non-Manufacturing PMI will be key to watch.

Daily Technical Levels

Support Pivot Resistance
104.80 105.25 105.55
104.50 106.00
104.05 106.30

USD/JPY – Trading Tips

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

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Forex Signals

USD/JPY Taking Mild Bids Despite Upbeat Tokyo CPI Data!

USD/JPY Taking Mild Bids Despite Upbeat Tokyo CPI Data!

The USD/JPY currency pair successfully extended its early-day mild bullish moves and took bids around the 106.00 level, mainly due to the positive Asian equities, backed by the fresh optimism about the reopening U.S. states. The upbeat data from China and Japan also added further strength to the positive market tone, which initially undermined the Japanese yen and contributed to the currency pair gains.

Besides, the broad-based U.S. dollar weakness in the wake of the gloomy U.S. economic outlook capped further upside in the currency pair. The Japanese yen was unaffected by the upbeat July month Tokyo Consumer Price Index (CPI) data across the pond. At this particular time, the USD/JPY is trading at 105.96 and consolidating in the range between 105.83 and 106.19.

At the data front, Tokyo Core CPI rose by 0.2% expected and previous with 0.4% while the CPI Energy crossed 0.5% market expectations, and 0.4% last readings and flashed 0.6% in July. Despite the upbeat data, the yen didn’t take any bid from it, possibly in the wake of U.S. President Donald Trump’s fresh optimism about economic reopening, which caused the equity market’s uptick.

Despite the rising number of cases, U.S. President Donald Trump has decided to reopen the country and said in the White House press conference that the permanent lockdown was not a workable plan to fight COVID-19. As well as, he also gave hopes about the virus vaccine while saying that “we will likely have a coronavirus vaccine far in advance of the end of the year.” This fresh optimism challenged the risk-off market sentiment. In turn, this supported the equity market, which undermined the safe-haven Japanese yen and contributed to the pair gains.

However, the market trading sentiment seemed rather unaffected by the uncertainties over the much-awaited fiscal package. The House Speaker Nancy Pelosi signaled that no deal was in sight during this week. As well as, the fresh warning by the World Health Organization (WHO) President Dr. Tedros Adhanom Ghebreyesus that “there may never be a “silver bullet” to kill the coronavirus (COVID-19)” also failed to weigh on the risk sentiment, at least for now, which gave support to the currency pair by weakening the Yen currency.

The broad-based U.S. dollar failed to maintain its early-day mild gains, supported by the earlier U.S. welcome data. The U.S. dollar reported losses on the day as the United States was still facing virus woes and struggled to control the spread of coronavirus, which eventually destroyed hopes for a quick economic recovery.

At the UK-Japan front, the Japanese Foreign Minister Motegi recently crossed wires and said in a statement on the day that he will visit the U.K. from Aug 5-7 to discuss bilateral free trade deal. This positive news gave some support to the local currency (Japanese Yen) and capped currency pair’s gains. The market players will carefully follow the virus updates and U.S. fiscal news, which will entertain market players amid a light calendar.


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

Entry Price – Sell 105.906
Stop Loss – 106.306
Take Profit – 105.506
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, July 30 – Top Trade Setups In Forex – GDP Figures In Focus 

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

Economic Events to Watch Today  

    


EUR/USD – Daily Analysis

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.17 1.18 1.18
1.17 1.19
1.16 1.19

 

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.2863 1.2908 1.2978
1.2792 1.3024
1.2747 1.3094

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
104.80 105.25 105.55
104.50 106.00
104.05 106.30

USD/JPY – Trading Tips

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

Categories
Forex Signals

USDJPY Bearish Bias Below Downward Trendline – Update On Signal!

Today in the early European trading session, the USD/JPY currency pair extended its previous day bearish moves and dropped further below 105.00 level, mainly due to the broad-based U.S. dollar weakness. The worries triggered U.S. selling bias that the second wave of COVID-19 cases in the United States could ruin the recovery in the world’s biggest economy.

The U.S. Treasury bond yields also declined and weighed on the U.S. dollar. On the other hand, the concerns about intensifying US-China relations extended some additional support to the safe-haven Japanese yen, which exerted an additional burden on the currency pair. Apart from this, the (BOJ) Deputy Governor Masayoshi Amamiya commented that the central bank was prepared to ease its monetary policy exerted some pressure on JPY and extended support to the pair. At this particular time, the USD/JPY currency pair is currently trading at 104.94 and consolidating in the range between 104.81 and 105.25.

The fears that the second wave of COVID-19 cases could undermine the U.S. economic recovery still hovering all over the market and kept the U.S. dollar bulls on the defensive. As per the latest report, the number of confirmed coronavirus cases in the Arizona state increased by 2,107 to a total of 165,934, while the death toll increased to 3,408, and the current hospitalization dropped to 2,564. Apart from this state, the number of confirmed coronavirus cases in the Florida state rose to a total of 441,977, while the deaths toll rose to 6,240, and the hospitalization decreased to 9,023 according to Florida’s Department of Health statement. Almost 4 U.S. states reported records high for one-day coronavirus deaths on Tuesday. The cases in Texas passed the 400,000 marks. However, these fears have exerted significant pressure on the market trading sentiment and made the U.S. dollar weak as well.

As in result, the broad-based U.S. dollar failed to gain any positive traction on the day and reported losses as the United States crisis of virus could break hopes for a quick economic recovery, which kept the investors cautious. However, the losses in the U.S. dollar kept the currency pair bearish. Whereas, the Dollar Index, which tracks the greenback against a basket of six other currencies, was down 0.2% at 93.507.

Across the Pound, the currency pair’s losses could also be associated with Bank of Japan (BOJ) Deputy Governor Masayoshi Amamiya comments that the central bank was prepared to ease its monetary policy further without hesitation if necessary, in the face of the coronavirus pandemic. It also added, “Global economy expected to recover only if wave 2.0 stops slowly.” As well as, they cleared that Japan’s business sentiment has started to show signs of recovery after dropping to a worse level.

However, the risk-off market sentiment was further bolstered by the latest disappointment over the much-awaited fiscal package’s lack of progress. The House Speaker Nancy Pelosi and the White House Chief of Staff Mark Meadows recently ruined expectations of U.S. policymakers delivering a much-awaited fiscal package soon. He said that the Republicans and Democrats still had a difference over the stimulus. However, these uncertainties extended some additional support to the Japanese yen’s as safe-haven status.

Apart from this, the recent escalation of diplomatic tensions between the U.S. and China also exerted some downside pressure on the risk sentiment and contributed to the currency pair’s declines. Although, traders are expected to avoid placing any strong bets ahead of the highly-anticipated FOMC decision.


The USD/JPY trades with a selling bias around 104.926 level, trading within a downward channel that provides an immediate resistance at 105.120. On the lower side, the USD/JPY may find support at 104.575 level, and closing of candles below 104.575 can open further selling bias until 104. Overall the pair is forming lowers low and lowers high pattern, which signifies selling sentiment among traders. The RSI and MACD suggest selling signals; for instance, the RSI is holding below 50, and the MACD is staying below 0. Today, let’s look for selling trade below 104.858.

Entry Price – Sell 104.858
Stop Loss – 105.258
Take Profit – 104.458
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 Signals

USD/JPY Examines Double Bottom – Update On Signal!

Today in the early European trading session, the USD/JPY currency pair succeeded to stop its previous 4-day losing streak and rose above mid-105.00 marks mainly due to the broad-based U.S. dollar strength, buoyed by the hopes of U.S. fiscal stimulus package, which eventually pushed the U.S. Treasury bond yields higher and contributed to the currency pair gains. On the other hand, the concerns about the worsening US-China relations might underpin the safe-haven Japanese yen, which becomes the key factor that cap the currency pair further gains. At this moment, the USD/JPY currency pair is currently trading at 105.44 and consolidating in the range between 105.22 – 105.69

Despite concerns about the ever-increasing coronavirus cases across the world and worsening US-China relations, the investors continued to cheer the hopes of U.S. fiscal stimulus package and optimism over a potential vaccine for the COVID-19. However, the fresh updates that the U.S. policymakers have moved closer to agreeing on the next fiscal stimulus package helped the USD maintain its gains.

The U.S., Senate Republicans introduced a $1 trillion COVID-19 aid package that would include $1,200 payments to U.S. citizens, as well as incentives for the manufacture of personal protective equipment in the United States, rather than China. It is worth mentioning that this package also includes $190 billion in loans for small businesses and $100 billion in loans to businesses that operate seasonally or in low-income areas. However, these hopes kept the equity market positive on the day.

Apart from this, the surge in coronavirus cases continues to gain pace, especially in the United States. As a result, the investors remain worried that the intensifying virus cases could undermine the economic recovery, which eventually fueled the Fed’s expectation of more stimulus. As per the latest report, the number of coronavirus infections has crossed almost 16.30 million across the world, whereas more than 650,000 people have died globally, as per the Johns Hopkins University. Whereas, the California coronavirus cases increased by at least 10,549 on Monday to 463,439 total, which now crossed Massachusetts’ record in total COVID-19 deaths.

Apart from the virus woes, the long-lasting tussle between the world’s two largest economies remains on the cards as the U.S. is increasing its aerial surveillance over the South China Sea to a record level to keep watch on China following China ordered the closure of the U.S. office in Chengdu, a tit-for-tat reply for the United States’ previous move over the Chinese office closure in Houston. However, these worsening updates give some support to the safe-haven Japanese yen and become the key factor that kept checking any additional gains in the currency pair. On the other hand, the Japanese LDP group is considering to impose restrictions on Chinese apps also adds a burden on the risk-tone.

As in result, the broad-based U.S. dollar flashed green and reported gains on the day. However, the gains in the U.S. dollar could be short-lived or temporary due to the worries that the economic recovery in the U.S. could be stopped in the wake of the resurgence in coronavirus cases. However, the gains in the U.S. dollar kept the GBP/USD currency pair under pressure. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies recovered 0.04% to 93.773.

In the absence of the major data/events on the day, the market traders will keep their eyes on the USD price dynamics and coronavirus headlines, which could play a key role in influencing the intraday momentum. As well as, the traders will keep their eyes on the news concerning U.S.-China.


The USD/JPY is trading with a bearish bias at 105.175 level, closing of candles below this level may drive selling bias 104.520. By the time we entered below signal, the market was suggesting buying trend, but now it seems like it’s going against us. Let’s open buy trade with a stop loss at

Entry Price – Sell 105.606

Stop Loss – 105.106

Take Profit – 106.106

Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +4600

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 105.375 Support – Quick Update on Forex Signal!  

The USD/JPY currency pair failed to stop its previous week’s losing streak and dropped further below mid-105.00 marks mainly due to the broad-based U.S. dollar weakness, triggered by the worries that the resurgence in cornonavirus cases in the United States could undermine the recovery in the world’s biggest economy, which eventually pushed the U.S. Treasury bond yields down and contributed to the currency pair losses. 

On the other hand, the concerns about worsening US-China relations underpinned the safe-haven Japanese yen, which exerted an additional burden on the currency pair. Currently, the USD/JPY currency pair is currently trading at 105.41 and consolidating in the range between 105.39 – 106.06.

The tensions between the world’s two largest economies escalated further last week after the Dragon Nation countered for being expelled from the Chinese consulate in Houston and ordered the U.S. to close its office in Chengdu in return. The U.S. Secretary of State Mike Pompeo called for “a new alliance of democracies” to oppose China’s “new tyranny”. However, these gloomy worries overshadowed the latest optimism over a potential vaccine for the highly contagious coronavirus disease and weighed on the risk sentiment. This, in turn, benefited the Japanese yen perceived safe-haven status against its American counterpart.

Apart from this, the second wave of coronavirus outbreak in the U.S. dampened prospects for a swift turnaround for the U.S. economy, witnessed by the declines in the U.S. Treasury bond yields. The United States crossed 4 million officially recorded Covid-19 cases and covered a significant part of that recorded in just the last 15 days. Almost 1,000 above people died each day between Tuesday and Friday in the U.S. whereas, there were also a near-record 74,000 new cases on Friday. California, with a community of almost 40 million, about twice Florida’s, is now the worst-hit state, nearing 450,000 cases. Globally, the number of coronavirus infections has now crossed 16 million, as per the Johns Hopkins University report.

At the USD front, the broad-based U.S. dollar remained depressed and reported losses on the day due to record rise in the daily count of COVID-19 cases and escalated U.S.-China tensions over the latest disagreement between the two countries. However, the losses in the U.S. dollar kept the currency pair under pressure. Whereas, the U.S. Dollar Index that tracks the greenback against a basket of other currencies slipped 0.47% to 93.933 by 12:15 AM ET (05:15 AM GMT), continuing its slide from Friday. 

Across the Pound, the losses in the currency pair could also be associated with BOJ’s optimistic comments on the economy that Japan’s economy may improve in the latter half of this year if coronavirus shows any slowing sign down. However, these comments also played a minor role in stronger Japanese yen.

The market players will keep their eyes on the U.S. economic docket, which will show the announcement of Durable Goods Orders later during the early North American session. In the meantime, investors will also keep their eyes on the broader market risk sentiment, which could play a key role in influencing the currency pair’s intraday momentum.


The USD/JPY is breaking below 105.375 support level, which can lead it’s prices further lower toward 104.866. On the 2 hour timeframe, the USD/JPY is trading within a downward channel, which can extend further selling in the pair. Recently, the USD/JPY has closed a bearish engulfing candle, which is suggesting odds of selling until 104.866 level. Check out a quick trade plan below…

Entry Price – Sell 105.607

Stop Loss – 106.007

Take Profit – 105.207

Risk to Reward – 1:2
Profit & Loss Per Standard Lot = -$400/ +$400

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

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

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

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

Categories
Forex Market Analysis

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

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

Economic Events to Watch Today  



    


EUR/USD – Daily Analysis

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

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

1.1640     1.1659

1.1629     1.1667

1.1621     1.1678

Pivot point: 1.1648

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

Sterling was high on the board as the macroeconomic data related to PMI for July from the U.K. rose from expectations. AT 13:30 GMT, the Flash manufacturing PMI for July rose to 53.6 against the expectations of 52.0 and supported GBP. The Flash Services PMI for July also raised to 56.6 from the expected 51.4 and supported GBP. At 11:00 GMT, the Retail Sales from the U.K. was raised by 13.9% from the expected 8.3% and supported GBP. The better than expected PMI and Retail Sales data from Great Britain helped GBP/USD to post gains and trade higher.

The U.S. Manufacturing PMI dropped to 51.3 from the expected 52.0, and the Flash Services PMI from the U.S. also dropped to 49.6 from the expected 51.0 in July. This added in the U.S. dollar weakness on board and supported the gains in GBP/USD pair on Friday.

Meanwhile, the U.S. dollar weakness was further bolstered by the rising coronavirus cases across the states. The U.S. marked the second day with 70,000 plus new instances of coronavirus and deaths more than 1000 in 24 hours on Saturday. The total number of infections in the U.S. touched 4.1 M, and the death toll reached 145,324.

The hopes that the U.S. economy will take a long period to recover from the coronavirus crisis as it hit hardest the U.S. States kept weighing on the U.S. dollar. The U.S. Dollar drops across the board pushed the pair above the 1.2800 level, and analysts believe that if the dollar’s weakness remained still, the GBP/USD pair could reach the 1.3000 level.

The British Pound was also backed by the decreasing number of coronavirus cases in the U.K. It means that restrictions will be gradually removed, and these hopes supported Pound.

On Brexit front, the latest round of negotiations ended on Thursday without significant progress on the post-Brexit trade deal. Britain’s chief Brexit negotiator David Frost said that they would not reach a preliminary agreement by the UK PM Boris Johnson’s July deadline. However, although the expectations for striking a deal are very less, it could not lose attention. Next week, the Brexit talks, U.S. stimulus package, and the infection cases in the U.S. will be key to watch.

Daily Technical Levels

Support Resistance

1.2782      1.2803

1.2771      1.2813

1.2762      1.2824

Pivot point:1.2792

GBP/USD– Trading Tip

The GBPUSD is also trading in an overbought region, and now it can drop until 1.2825 level, which marks 23.6% Fibonacci retracement below this the next support will be found around 1.2770. At the same time, resistance stays at 1.2860 and 1.2930. The RSI and MACD are in the bullish region, but they are forming smaller histograms that suggest odds of selling bias. Let’s consider taking buying trade over 1.2760 until 1.2860 level today.  


USD/JPY – Daily Analysis

The USD/JPY was closed at 106.124 after placing a high of 106.902 and a low of 105.679. The USD/JPY pair extended its bearish streak for the second day towards the lowest of 2 years amid broad-based U.S. dollar weakness. The strong bearish pressure on the day came in after the souring market sentiment that helped JPY gather strength as a safe haven. The currency pair dropped below 106 level and extended its slide and reached its lowest since mid-March at 105.67.

The risk-averse market sentiment was boosted by the escalating tensions between the U.S. & China. Last week the U.S. sent a short notice to China to halt its consulate in Houston. In retaliation, China closed the U.S. consulate in Chengdu, and the tensions between the U.S. & China escalated. Besides, U.S. Secretary of State Michael Pompeo asked for an end of “engagement,” a policy that has defined US-China relations for nearly five decades. The policy is considered as the most important foreign policy achievement by China in recent history.

The safe-haven Japanese yen gained traction due to its safe-haven status, causing the USD/JPY pair to move in a downward direction. The U.S. Dollar Index dropped by 0.36% to its lowest level since September 2018 at 94.41 level and made the greenback weak across the board. The weak U.S. dollar weighed on the USD/JPY pair and pushed the pair to its two years lowest level.

Furthermore, the macroeconomic data released on Friday also weighed on the USD/JPY pair when Flash Manufacturing PMI from the U.S. dropped to 51.3 level from the anticipated 52.0 in July. The Flash Services PMI also fell to 49.6 level from the projected 51.0 and weighed on the U.S. dollar. At 19:00 GMT, the New Home Sales in June from the U.S. increased to 776K from the expected 700K.

The decreased PMI data from the U.S. could be attributed to the increased number of coronavirus cases from across the U.S. On Saturday, the U.S. marked the second day with 70,000 plus new instances of coronavirus and deaths more than 1000 in 24 hours. The total number of infections in the U.S. rose to 4.1 M, and the death number reached 145,324.

Next week, the FOMC meeting will remain dovish, and the scope for U.S. Dollars will remain on the downside. This will make investors to short USD positions that will cause further decline in the USD/JPY pair.

Daily Technical Levels

Support Resistance

105.85     106.19

105.70     106.36

105.52     106.52

Pivot Point: 106.03

 USD/JPY – Trading Tips

The USD/JPY trades with a selling bias around 105.526 level, trading within a downward channel that provides an immediate resistance at 106.120. On the lower side, the USD/JPY may find support at 105.375 level, and closing of candles below 105.375 can open further selling bias until 104.850. Overall the pair is forming lowers low and lowers high pattern, which signifies selling sentiment among traders. The RSI and MACD suggest selling signals; for instance, the RSI is holding below 50, and the MACD is staying below 104.866. Today, let’s look for sell trade below 105.800. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, July 21 – Top Trade Setups In Forex – Weaker Dollar Sentiment! 

The U.S. dollar continued to struggle because of the previous week’s latest U.S. consumer confidence data release. The less consumer confidence over the U.S. economy weighed on the greenback as the economy struggles to overcome the coronavirus situation. Today, the market is likely to focus on the Canadian retail sales figures, but these may not have any impact on gold and other currency pairs. Technical levels will matter today.

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD was closed at 1.14473 after placing a high of 1.14676 and a low of 1.14022. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD exchange rate extended its gains on Monday and reached the highest level since March 9. The Euro rose against many rival currencies on hopes over a crucial milestone as the Eurozone’s governments showed consensus on a COVID-19 recovery fund. Although lower than the initial proposal of 500 billion euros in grants, the new agreed grant is now 390 billion euros, which is still a significant boost for the Eurozone’s struggling economy. 

On Monday, the European Council President Charles Michel said that he was confident a deal on the bloc’s coronavirus recovery package could be reached after putting forward a new proposal. The latest proposal offered by him provided significant concessions to the so-called frugal four countries, Austria, Denmark, Netherlands, and Sweden. In the new proposal fund, the grants were decreased to 390 Billion euros from the initial 500 billion euros, and the Loans became 360 Billion Euros from 250 billion euros.

In Eurozone economic data, Germany’s Producer Price Index for June fell below consensus at 0% and weighed on single currency Euro. As a result of EUR/USD, pair investors became increasingly concerned about the Euro zone’s largest economy’s ability to recover from the COVID-19 crisis.

On the U.S. front, the U.S. dollar continued to struggle because of the previous week’s latest U.S. consumer confidence data release. The less consumer confidence over the U.S. economy weighed on the greenback as the economy struggles to overcome the coronavirus situation.

Furthermore, the U.S. Congress was set to announce a new stimulus measure as the previous unemployment benefits package will expire at the end of July. The U.S. dollar remained weak because of the investors were looking ahead of the Congress announcement. The weak U.S. dollar added gains in the EUR/USD pair on Monday.

The next day, the U.S. investors will be looking ahead to the release of June’s Chicago Fed National Activity Index. Any improvement in the index will indicate better economic conditions and would prove positive for the U.S. dollar. The single currency euro will continue to be driven by the news surrounding the European Summit’s discussions on the COvid-19 recovery fund. The euro investors will also await Luis De Guindos, the Vice President of the ECB. Any dovish comments from ECB would cut the Euro gains.

Daily Technical Levels

Support Resistance

1.1410     1.1477

1.1372     1.1506

1.1342     1.1544

Pivot point: 1.1439

EUR/USD– Trading Tip

The EUR/USD continues to follow the same technical outlook as before. It has tested the double top resistance at 1.1446 level, and now it’s finding support at 1.1410 level. The upward trendline on the hourly chart is also likely to support the pair around 1.1375 level. Chances of bullish trend seem solid today. Therefore, the bullish breakout of the 1.1445 level can lead the EUR/USD prices towards the 1.1490 level.


GBP/USD – Daily Analysis

The GBP/USD pair closed at 1.26611 after placing a high of 1.26652 and a low of 1.25180. Overall the movement of GBP/USD pair remained strongly bullish throughout the day. The GBP/USD posted its biggest daily gains since June 30 on Monday and recovered all of its previous five day’s losses on the back of positive comments from England’s FPC and JP Morgan.

Cable found its foot against the U.S. dollar on Monday after the JPMorgan Bank said that the UK was the largest capital importer within G10. The Bank added that as the Brexit process was heading to an end of the transition period, the Cable was becoming rather less dependent on general risk sentiment and started to decouple from other high-beta currencies.

The rise in Sterling was further supported by the latest comments from Jonathan Hall, an appointee to the Bank of England’s Financial Policy Committee (FPC) on Monday. According to him, Brexit will make markets less efficient, but it will not be disastrous for Britain’s economy.

Hall said that Brexit would cause fragmentation, inefficiency, and problems with regulations, but it will not be disastrous.

Meanwhile, on Monday, the Bank of England policymaker Silvana Tenreyro said that Britain might avoid an economically damaging loss of skills in its labor market as long as the rise in unemployment does not drag on.

Tenreyro said that uncertainty persisted in the economy related to COVID-19 and that the crisis may even have led some workers to upskill to adapt to new ways of working remotely. She added that as long as the current period of high unemployment remains temporary, the loss in skills would be only limited.

In contrast to this, the Bank of England economist Andy Haldane warned inflation could be a problem after the coronavirus crisis. He insisted that Britain was enjoying a V-shaped recovery and was in the middle of a quick turnaround as the economy recovered about half of the immense fall in output in March & April when the crisis was most intense. Haldane told that the economy had been growing on an average of about 1% a week since May.

The upbeat comments from all the sides surrounding Britain gave a massive push to the GBP/USD prices on Monday. Adding in the currency pair’s gains was the U.S. dollar weakness backed by the increasing number of infected cases in the U.S. U.S. reported a record-high number of infected cases in past days with death tolls crossed 140,000, and the total number of COVID-19 cases reached 3.8 Million.

On the data front, there was no macroeconomic data to be released on the day, and hence, the pair’s movement was followed by the comments related to the U.K. economy and coronavirus headlines.

Daily Technical Levels

Support Resistance

1.2564     1.2713

1.2466     1.2764

1.2415     1.2861

Pivot Point: 1.2615

GBP/USD– Trading Tip

The GBPUSD has violated the triple top resistance level at 1.2660 level, and bullish crossover of this level opens further room for buying until 1.2729, but before this, the Sterling can retrace until 23.6% Fibo level of 1.2645 level. Below this, the next support can be found at the 1.2625 level. Above 1.2625, the GBP/USD can be showing a buying trend. Let’s consider taking buy trades over 1.2615 level today. 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.270 after placing a high of 107.541 and a low of 106.999. Overall the movement of the USD/JPY pair remained bullish throughout the day. The USD/JPY pair rose to 8 days the highest level on Monday on the back of Japan’s risk sliding back into deflation and the rising numbers of coronavirus cases in the U.S.

Bank of Japan released its minutes of June meeting in which the policymakers debated at the risk of the country sliding back into deflation but stopped short of supporting stronger steps to prevent companies from going bankrupt due to coronavirus pandemic.

More companies were facing the risk of insolvency with the impact of coronavirus pandemic likely to last for a prolonged period of time, even if the companies receive immediate liquidity support. But the members of BOJ differentiate on the opinion of injecting capital into firms to help recover and prevent insolvency.

Some members insisted that injected direct capital to save the struggling firms is an action that should come from the government, and few members said that it was the role of BOJ to provide liquidity and also to cooperate with the government while clarifying the respective role.

The Bank of Japan kept its interest rates unchanged in June after easing monetary policy in March and April. Minutes revealed that the Bank maintained its view over the economy as it will gradually recover from the pandemic’s damage.

However, many members showed concern as the pandemic was picking its pace once again. Japan lifted its lockdown measures in late May, and Tokyo has seen a renewed spike in infections lately. Japan has reported over 25,000 cases, including 1,000 deaths. The downbeat comments from the latest issued meeting minutes by Bank of japan pushed the USD/JPY pair higher on Monday.

On greenback front, the currency was down on Monday as the U.S. Dollar Index decreased by 0.6% to 95.85 level. The currency was suffering from its economy’s struggle to fight the coronavirus crisis as the nation was leading in reporting infected cases worldwide.

U.S. figures related to infected people raised to 3.8 Million, and death toll count reached 140,000 making the U.S. the most affected economy by the pandemic. Despite the safe-haven status of U.S. dollar investors, they were getting out of it due to the U.S. economy’s gloomy outlook.

The rising number of cases urged some states to introduce renewed lockdown measures that weighed on economic recovery hopes, and hence, the U.S. dollar became weak. However, the weak U.S. dollar failed to turn USD/JPY’s gains on Monday.

Daily Technical Levels

Support Resistance

106.99     107.51

106.74     107.78

106.47     108.03

Pivot point: 107.26

 USD/JPY – Trading Tips

The USD/JPY is consolidating in a broad trading range of 107.400 – 107, while the overall bias seems neutral at 107.191. The USD/JPY pair has recently crossed over 50 EMA, which extended resistance at 107 level, including now the same level will work as a support. The bearish breakout of the 107 level can extend the selling trend until 106.580. Simultaneously, the bullish breakout of the 107.400 level can extend the buying trend until 107.600. The MACD and RSI support bearish bias, and we may take a selling trade below 107 and buying above the same level today. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, July 20 – Top Trade Setups In Forex – E.U. Economic Summit Ahead

On the news front, the market seems to be muted due to a lack of high impact on economic events. The Eurozone’s German Buba report and current account data will remain in focus, but I highly doubt if this will drive any market movement.

Economic Events to Watch Today 

 

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.14248 after placing a high of 1.14434 and a low of 1.13750. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD pair edged higher on Friday and rose near 1.145 level on the increased hopes for further progress on the European Union’s 750 billion euros recovery fund. As a result, the EUR/USD pair traders became optimistic that Eurozone’s economy could be on the road to recovery.

Traders expected some progress in the 2-day Summit even though the German Chancellor Angela Merkel was downbeat about a consensus between E.U. leaders over the recovery fund. She said that the differences were too large to predict that a positive result will reach this time. She added that though it would be desirable, we must be realistic. She said that to reach an agreement, a great deal of willingness to compromise was required, demanding very difficult negotiations.

Meanwhile, on the data front, at 14:00 GMT, the Final CPI from the Eurozone for the year in June came in line with the expectations of 0.3%. The Final Core CPI for the year also remained as expected, 0.8% from the Eurozone. From the U.S. side, the TIC Long-Term Purchases for May came in as 127 B compared to April’s -130.8B. At, 17:30 GMT, the Building Permits in June dropped to 1.24M against the expected 1.30M and weighed on the U.S. dollar. The Housing Starts, however, came in line with the expectations in June as 1.19M.

At 19:00 GMT, the Prelim UoM Consumer Sentiment for July dropped to 73.2 against the expected 79.0 and weighed on the U.S. dollar. The Prelim UoM Inflation Expectations in July increased to 3.1% from the previous 3.0%. The poor than expected data from the United States on Friday pushed the already rising EUR/USD pair.

Further weighing on the greenback was the escalating tensions between U.S. & China trade relations after US Trump’s administration was considering a blanket ban on all Chinese Communist Party members to the U.S.. This news made the markets cautious, and investors became seriously concerned over the economic recovery.

The greenback came under pressure due to its struggles against fighting the pandemic and coping with the increased number of unemployment claims that came in as 1.3M in recent weeks. The weak U.S. dollar helped the EUR/USD pair to gain its strength in the market.

Daily Technical Levels

Support Resistance

1.1355     1.1428

1.1326     1.1472

1.1282     1.1501

Pivot point: 1.1399

EUR/USD– Trading Tip

The EUR/USD has tested the double top resistance at 1.1446 level, and now it’s finding support at 1.1410 level. The upward trendline on the hourly chart is also likely to support the pair around 1.1375 level. Chances of bullish trend seem solid today; therefore, the bullish breakout of 1.1445 level can lead the EUR/USD prices towards 1.1490 level.


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.25645 after placing a high of 1.25742 and a low of 1.25115. Overall the movement of GBP/USD pair remained bullish throughout the day. On Friday, Bank of England’s Governor, Andrew Bailey, said that Britain’s economy was starting to recover from its coronavirus lockdown induced crisis, but some job-intense sectors remained weak. He also added that the long-term outlook for the country remained unclear as well.

During a webinar organized by the central bank, Bailey said that the visible activity return could mean the beginning of the recovery. There were signs of activity returning in the Housing market and new car sales but not in hospitality and entertainment that employ many people.

The Governor also warned against the optimism of his chief economist Andy Haldane who has declared that there would be a V-shaped recovery in the economy post Coronavirus. He said that rebound would depend on people’s return to work and go shopping and dining out. He also said that recovery would depend on the progress of medical companies in finding cures and vaccines for the COVID-19 and also the impact of the second wave.

Earlier this week, Britain’s budget forecasters said that economy could shrink by more than 14% this year if there will be lasting damages by the pandemic. The British Pound continued to grind sideways on Friday as Governor Bailey provided gloomy comments, and traders became cautious. However, the U.S. dollar’s weakness kept the GBP/USD pair on the higher track.

On Friday, at 17:30 GMT, the Building Permits from the U.S. for May dropped to 1.24M against the expected 1.30M and weighed on the U.S. dollar. The Housing Starts, however, came in line with the expectations of 1.19M. At 19:00 GMT, the Prelim UoM Consumer Sentiment was dropped to 73.2 from the expected 79.0 and weighed on the U.S. dollar. 

Due to poor than expected macroeconomic data, the weak U.S. dollar caused a surge in GBP/USD prices on Friday in the absence of any macroeconomic data from Britain. Meanwhile, on Friday, the U.K.’s 38 Billion Dollars’ worth Stimulus package announced by Rishi Sunak came under fire after the opposition Labour Party called on the country’s spending watchdog to open an investigation over it.

Daily Technical Levels

Support Resistance

1.2505     1.2610

1.2459     1.2671

1.2399     1.2716

Pivot Point: 1.2565

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.021 after placing a high of 107.359 and 106.938. Overall the movement of the USD/JPY pair remained bearish throughout the day. The U.S. dollar was marginally lower in early European trade hours on Friday as traders looked past the resurgence in coronavirus cases worldwide and the need for a safe-haven. The U.S. dollar’s focus was on the likelihood of more fiscal stimulus ahead rather than on its safe-haven status.

According to Johns Hopkins University data, the number of coronavirus cases rose to 13.84 million globally. On Thursday, the United States reported almost 77,000 new cases that raised economic recovery concerns.

The sharp increase in the central bank’s stimulus packages to protect economies from the consequences of the pandemic has weighed on the U.S. dollar. The U.S. reported 71,558 new COVID-19 cases on Saturday and made its second day in a row to post more than 70,000 cases, according to Johns Hopkins University. The average daily rise in cases improved by 18.34% as compared to one week ago.

The increasing number of cases urged U.S. lawmakers to partially shut the economies again to control the spread of the virus. This raised fears that economies will suffer from the re-imposed restrictions and calls for more stimulus packages emerged. The need for more stimulus packages from the U.S. and across the globe to save the economy for coronavirus induced lockdowns weighed on the U.S. dollar that dragged the USD/JPY pair on Friday.

On the flip side, there were also reports on the weekend that Trump’s administration was trying to block billions of dollars in an upcoming coronavirus relief fund that was allocated to states for conducting tests and contact tracing. Reports also suggested that Trump’s administration was also blocking the amount of 5 billion that was to be allotted to the Centers for Disease Control and Prevention.

Furthermore, the New York Federal Reserve President John Williams said that it could take a few years for the U.S. economy to recover from the pandemic, and it was not yet the time to think about rising interest rates. The long-lasting decreased interest rates also weighed on the U.S. dollar and kept the pair USD/JPY prices under pressure.

On the data front, at17:30 GMT, the Building Permits fell to 1.24M from the expected 1.30M and weighed on the U.S. dollar. The TIC Long-Term Purchases for May came in as 127 B in comparison to April’s -130.8B. At 19:00 GMT, The Prelim UoM Consumer Sentiment for July also declined to 73.2 from the anticipated 79.0 and weighed on the U.S. dollar. The Prelim UoM Inflation Expectations in July rose to 3.1% from the previous 3.0%.

The poor than expected macroeconomic data from the U.S. weighed on the USD/JPY pair and dragged the pair below the 107 level.

Daily Technical Levels

Support Resistance

106.93    107.51

106.59    107.75

106.35    108.09

Pivot Point: 107

 USD/JPY – Trading Tips

The USD/JPY is consolidating in a broad trading range of 107.400 – 107, while the overall bias seems neutral at 107.191. The USD/JPY pair has recently crossed over 50 EMA, which extended resistance at 107 level, including now the same level will work as a support. The bearish breakout of the 107 level can extend the selling trend until 106.580. 

Simultaneously, the bullish breakout of the 107.400 level can extend the buying trend until 107.600. The MACD and RSI support bearish bias, and we may take a selling trade below 107 and buying above the same level today. Good luck! 

Categories
Forex Signals

USD/JPY Breaking Above Downward Channel – Update on Signal!

During Monday’s European trading session, the USD/JPY currency pair succeeded in stopping its early-day losses and took some modest bids above the 107.00 marks. However, the currency pair is trading with a mild bullish bias mainly due to the risk-on market sentiment triggered by incoming positive economic data, which raised hopes of a swift economic recovery and remained supportive of the upbeat market mood. However, the risk-on market sentiment undermined the safe-haven Japanese yen and provided a modest lift to the USD/JPY pair.

On the other hand, the broad-based U.S. dollar weakness in the wake of risk-on market sentiment kept a lid on any additional gains in the currency pair, at least for now. At this moment, the USD/JPY currency pair is currently trading at 107.08 and consolidating in the range between 106.78 and 107.09.

The holding of bonds and other assets by the U.S. Federal Reserve was contracted for a fourth straight week and declined below $7 trillion. According to Central banks, the total balance sheet size of the Fed fell about $88 billion to $6.97 trillion on Thursday. It was the largest weekly drop in 11 years, from $7.06 trillion of last week to $6.97 trillion this week.
The main driver of the Fed’s balance sheet decline was the outstanding repurchase agreements (repos) – that fell to zero from $51.2 billion a week earlier.

Gilead Sciences announced that its antiviral drug Remdesivir could reduce the risk of death for severely sick coronavirus patients by 62%; however, more research was needed. This positive news weighed on the safe-haven Japanese Yen and capped on additional losses in USD/JPY pair.

Moreover, the risk-on market sentiment was further bolstered by the hopes of further stimulus from the U.S. due to the downbeat Producer Price Index (PPI), also backed by the comments from the President and CEO of the Federal Reserve Bank of Dallas Robert Kaplan.



Technically, the USD/JPY is crossing over 106.850, which will provide support to the Japanese pair. The pair is trading with a bullish bias of above 106.850 support, and crossing above 106.850 is likely to lead the USD/JPY prices towards 107.400 level. Here’s a quick update on our signal.

Entry Price – Buy 107.134

Stop Loss – 106.734

Take Profit – 107.534

Risk to Reward – 1

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

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

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Categories
Forex Signals

USD/JPY Breaks Below Sideways Range – Brace for Sell!

The USD/JPY failed to stop its Asian session early losses and took additional offers around below the mid-108.00 level. The risk-off market sentiment backed the move in the wake of the second wave of coronavirus, which eventually underpinned the safe-haven Japanese yen and contributed to the currency pair declines.

The Japanese yen gains could also be associated with upbeat reports about easing travel restrictions. However, the worries over the resurgence of the Covid-19 virus exerted bearish pressure on the risk sentiment and underpinned the safe-haven Japanese yen. As per the latest report, the U.S. cases crossed a total of 3.0 million marks and reported over 60,000 cases on Thursday.

Furthermore, over 12.2 million cases and 550,000 deaths globally were reported as of July 10, as per John Hopkins University data. Most of the states like Florida, Texas, and California, said a record-high number of new cases on Thursday. According to Goldman Sachs, hospital capacity in Arizona, Texas, and Florida has filled up by COVID-19 patients, and state officials are forced to consider additional measures.

As a result, the risk-off market sentiment is expected to extend into Europe, as witnessed by the S&P 500 futures’ sharp losses. However, the losses in the U.S. stock futures help boost the safe-haven bids for the safe-haven Japanese yen.

Apart from the Virus woes, the tussle between the U.K. and China over Beijing’s Hong Kong security law remained on the card but refrained from offering any further negative news.

At the USD front, the broad-based U.S. dollar succeeded in extending its previous session gains due to new coronavirus cases in the United States that further undermined the case for a quick economic recovery, which pushes the traders towards safe-haven assets. However, the U.S. dollar gains become a key factor that kept the lid on the pair’s additional losses.

As per the Kyodo news agency report, Japan has shown willingness to discuss ten countries and regions, including China, South Korea, and Taiwan, about easing travel restrictions. Whereas, the Japanese Prime Minister (PM) Shinzo Abe and Australian PM Scott Morrison talked yesterday via a virtual summit and showed readiness to accelerate preparations to resume limited travel among business people. This news also exerted some positive impact on the Japanese yen and contributed to the currency pair declines.

In the absence of the major data/events to be released on the day, the market traders will keep their eyes on the USD price dynamics and coronavirus headlines, which could play a key role in influencing the intraday momentum.


The USD/JPY was consolidating in a broad trading range of 107.800 to 107.250, which was finally violated during the Asian session. The pair is now holding at 106.850, and this is going to provide solid support to the USD/JPY pair for now. However, this level’s bearish breakout has a huge odds of driving more selling until 106.450 level today. At the moment, the pair is trading with a selling bias of above 106.850 support. Our trade got closed a bit early today, but we still secured 18 pips in it. Brace for next trades…

Entry Price – Sell 107.014

Stop Loss – 107.414

Take Profit – 106.614

Risk to Reward – 1

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

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

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Categories
Forex Market Analysis

Daily F.X. Analysis, June 30 – Top Trade Setups In Forex – Eyes on U.S. News! 

On the news front, it’s going to be a busy day in the wake of U.S. Chicago PMI, C.B. Consumer Confidence, and Fed Chair Powell Testifies. The European session may exhibit muted trading, but the New York session is likely to bring sharp movements in the market, and we can expect breakouts.

Economic Events to Watch Today 

 

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.12423 after placing a high of 1.12876 and a low of 1.12149. Overall the movement of the EUR/USD pair remained bullish throughout the day. During the Monday session, Euro broke higher and reached near 1.1300 level; however, U.S. dollar strength caped on any additional gains and took the prices away from that level. European Union has been praised for its handling of coronavirus crisis through its stimulus plans, and despite the increasing numbers of infected cases around the world, the E.U. has decided to open its gates for 15 countries.

European Union revealed a new list of countries that will be permitted to enter the E.U. from July 1 when external borders will be officially reopened. However, the U.S. was excluded from the permitted countries to enter the E.U. due to coronavirus developments. This raised Euro across the board on the hopes that tourism will aid in the fast E.U. economic recovery.

China was also excluded from the “safe list” of the European Union; however, if the Chinese government would offer a reciprocal travel deal for E.U. citizens, then the E.U. will add China to its “safe list.” E.U. has said that the safe list will be reviewed every two weeks and will be adjusted according to the coronavirus developments in each country.

Furthermore, Germany’s finance minister and lawmakers said on Monday that the European Central Bank (ECB) had met the principle of proportionality with its stimulus package that ended the legal conflict threatening to undermine central bank policy. The German Constitutional Court last month gave ECB 3 months to justify bond purchases under its stimulus plan –PSPP or lose German central bank as a participant. This raised Euro in the financial market and pushed EUR/USD pair higher on Monday.

On the data front, The German Prelim CPI for June surged to 0.6% from the expected 0.3% and supported Euro. At 12:00 GMT, the Spanish Flash CPI for the year was dropped by 0.3% against the expected drop by 0.9% and supported the single currency Euro.

The better than expected CPI data from Germany and Spain gave strength to Euro, which added in the gains of EUR/USD pair on Monday.

On the other hand, from the American side, the Pending Home Sales for May increased to 44.3% against 18.9%, which gave strength to the U.S. dollar that exerted downward pressure on EUR/USD at 19:00 GMT.

The U.S. Dollar was also intense because of its safe-haven status during increased US-China tensions and China-India conflict and rising number of coronavirus cases in the U.S. & many other countries. This dragged the rising EUR/USD and limited the gains of the pair on Monday.

Daily Support and Resistance

  • R3 1.1241
  • R2 1.1235
  • R1 1.1229

Pivot Point 1.1223

  • S1 1.1217
  • S2 1.1211
  • S3 1.1205

EUR/USD– Trading Tip

The EUR/USD is holding below a strong resistance level of 1.1245 level, the closing of candles below this level is suggesting chances of selling bias until 1.1218 level. Continuation of selling trend below 1.1218 level can extend selling until 1.1195 level today. Conversely, a bullish breakout of the 1.1245 level can extend buying until 1.1289. The RSI and MACD are still in a bearish zone, while the 50 EMA also suggests selling bias. Therefore, we should look for selling trades below 1.1223levels.  


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.22980 after placing a high of 1.23893 and a low of 1.22513. Overall the movement of GBP/USD pair remained bearish throughout the day. The Pound was already weak against the U.S. dollar, and the decline in Pound gained speed after the risk-off market sentiment gained traction and made the U.S. dollar stronger on Monday in the late trading session.

On Monday, face-to-face negotiations on the post-Brexit trade deal between the E.U. & U.K. began after both parties pledged to intensify talks. It would be the first time the U.K.’s chief negotiator David Frost will meet in person with his E.U. counterpart Michel Barnier since the talks began in March. Negotiations were continued through the pandemic but virtually not in person due to coronavirus pandemic.

Boris Johnson has said that a deal could be reached this month with new momentum. PM Johnson met E.U. Commission President Ursula von der Leyen in a video conference this month and exclaimed that there were very good chances of getting a trade deal by Dec. The traders were cautious ahead of talks as to how they would go; so, British Pound came under pressure on Monday and dragged GBP/USD pair with itself.

Furthermore, Boris Johnson promised “an active approach to economy” while speaking at a school construction site. His comments came ahead of the launch of a task force to speed up the delivery of infrastructure projects. PM Boris Johnson said that “the cash is there” for long-term investment to help the U.K. recover from the coronavirus crisis and its impact on the economy. He announced that $1.23 B would be delivered to build the first 50 projects, including schools. The U.K. economy was contracted by 20.4% in April, the largest monthly fall on record due to the coronavirus crisis.

On the data front, The M4 Money Supply in May was released at 13:30 GMT, from the United Kingdom, which increased to 2.0% from the forecasted 1.6% and supported British Pound. The Mortgage Approvals from the U.K. in May were decreased to 9K against the forecasted 25K and weighed on British Pound. At 13:32 GMT, the Net Lending to Individuals for May decreased to -3.4B from the -4.0B and supported British Pound.

On the other hand, the Pending Home Sales from the United States for May came in as 44.3% against the expected 18.9%and supported the U.S. dollar. Better than expected data from the U.S. gave strength to the U.S. dollar, which added in the downward trend of GBP/USD on Monday.

The U.S. dollar was strong across the board due to its safe-haven status that was high due to the increased geopolitical tensions and intensified numbers of coronavirus cases around the world. Strong U.S. dollar weighed on GBP/USD pair on Monday.

Daily Support and Resistance

  • R3 1.2381
  • R2 1.2367
  • R1 1.2354

Pivot Point 1.234

  • S1 1.2327
  • S2 1.2313
  • S3 1.23

GBP/USD– Trading Tip

The GBP/USD is trading with a bearish bias, primarily upon the release of worse than expected GDP figures. The cable is trading at 1.2275 level, and it’s finding immediate support at 1.2258 level. Closing of candles below 1.2258 level can open further room for selling until 1.2175 level while the resistance continues to hold at 1.2400 level. On the 4 hour chart, the GBP/USD has also formed a downward channel, which is extend selling bias, along with the 50 EMA, MACD, and RSI as all of the technical indicators are in support of selling. Let’s consider taking sell trades below 1.2345 level today.


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 107.570 after placing a high of 107.882 and a low of 106.979. Overall the movement of USD/JPY remained bullish throughout the day. The USD/JPY extended its gains and raised for the 4th consecutive day on Monday on the back of improving risk sentiment that made it difficult for safe-haven Japanese Yen to find demand.

On Monday, China said that it would impose visa restrictions on certain United States individuals in response to the same move by Washington on Chinese officials over the Hong Kong issue. The Chinese Ministry of Foreign Affairs spokesman Zhao Lijian said that the visa restrictions would be imposed on confident Americans with egregious conduct relating to Hong Kong.

He added that national security law for Hong Kong was purely China’s internal affairs, and foreign countries had no right to interfere. He said that attempts from Washington to destruct China’s legislation for safeguarding national security in Hong Kong would never succeed. This increased the risk sentiment, and hence, the USD/JPY pair gained.

On the data front, the Retail Sales for the year from Japan was released at 4:50 GMT, which dropped by 12.3% against the forecasted decline by 11.6% and weighed on Japanese Yen that raised USD/JPY across the board. At 19:00 GMT, the Pending Home Sales from the United States on Monday for May increased to 44.3% against the forecasted 18.9% and supported the U.S. dollar, which helped USD/JPY to gain traction in the market. Meanwhile, the U.S. Dollar Index, which dropped to a daily low of 96.11, gained traction and reached 97.50 and helped the USD/JPY pair to surge further.

Daily Support and Resistance    

  • R3 107.39
  • R2 107.31
  • R1 107.27

Pivot Point 107.19

  • S1 107.14
  • S2 107.07
  • S3 107.02

USD/JPY – Trading Tips

Technically, the USD/JPY pair is trading with a bullish bias of around 107.660. On the three hourly charts, the USD/JPY is gaining bullish support by the regression channel. The upward channel has the potential to support the USD/JPY pair around 107.395 level. Closing of candles above this level can drive buying until 107.950, while below 107.390, the USD/JPY may drop until 106.835 level. The 50 EMA is supporting bullish bias; therefore, we should look for buying over 107.350 today. Good luck! 

Categories
Forex Signals

USD/JPY Bearish Engulfing & 50 EMA Crossover Signals Sell – Who’s Up?