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Forex Market Analysis

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

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

Economic Events to Watch Today  

 


 


EUR/USD – Daily Analysis

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

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

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

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

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

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

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

Daily Technical Levels

Support   Resistance

1.1766      1.1891

1.1717      1.1969

1.1640      1.2017

Pivot point: 1.1843

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

Daily Technical Levels

Support   Resistance

1.2997      1.3222

1.2851      1.3301

1.2771      1.3448

Pivot point: 1.3076

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support   Resistance

103.82      106.29

102.27      107.21

101.35      108.75

Pivot point: 104.74

USD/JPY – Trading Tips

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

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Forex Market Analysis

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

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

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support    Resistance

1.1733      1.1884

1.1647      1.1947

1.1583      1.2034

Pivot point: 1.1797

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

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

Daily Technical Levels

Support    Resistance

1.2997      1.3222

1.2851      1.3301

1.2771      1.3448

Pivot point: 1.3076

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

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

Daily Technical Levels

Support    Resistance

103.09      104.22

102.70      104.95

101.97      105.34

Pivot point: 103.83

USD/JPY – Trading Tips

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

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Forex Signals

USDJPY Swing Failure BUY

Flow Assessment

  • Sellers have tried with high volatility to create a lower low and failed, suggesting that a higher price may be needed

Location Assessment

  • Next set of liquidity for H1 sellers (aqua line) are still higher up, thus giving space for the buys, especially after buyers have halted seller progress in this swing

Momentum Assessment

  • On M15, price has initiated an up-flow with higher high and higher low. We look to trade the buys after the 1st sign of a strong buyer
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Forex Market Analysis

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

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

Economic Events to Watch Today  

  


EUR/USD – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support    Resistance

1.1733      1.1881

1.1648      1.1944

1.1585     1.2029

Pivot point: 1.1796

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

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

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

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

Daily Technical Levels

Support    Resistance

1.2997      1.3222

1.2851      1.3301

1.2771      1.3448

Pivot point: 1.3076

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

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

Daily Technical Levels

Support    Resistance

103.09      104.22

102.70 104.95

101.97 105.34

Pivot point: 103.83

USD/JPY – Trading Tips

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

Categories
Forex Signals

USDJPY Breakout Retest SELL

Flow Assessment

  • There has been a very large trap on daily in terms of an SL hunt. The strong force of buyers would have enticed people on the wrong side of the market, providing lots of liquidity for sellers to build up positions at good, high prices to prepare for a big move

Location Assessment

  • Price has broken down below the weekly support, which is stale, having been tested 4 times already without any buy swing making even an equal high
  • This indicates that the weekly support is weak and is about to break

Momentum Assessment

  • The sellers have created a lower-low, showing that they are in control
  • We enter upon signs of rejection at the logical breakout retest area that coincides with the lower high.
Categories
Forex Market Analysis

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

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

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

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

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

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

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

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

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

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

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

Daily Technical Levels

Support    Resistance

1.1650      1.1757

1.1588      1.1802

1.1543      1.1864

Pivot point: 1.1695

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support   Resistance

1.2913      1.2941

1.2898      1.2954

1.2884      1.2969

Pivot point; 1.2926

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

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

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

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

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

Daily Technical Levels

Support   Resistance

104.32      104.71

104.19      104.95

103.94      105.09

Pivot point: 104.57

USD/JPY – Trading Tips

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

Categories
Forex Market Analysis

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

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

Economic Events to Watch Today  

 


 


EUR/USD – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

1.1624     1.1657

1.1607     1.1673

1.1591     1.1690

Pivot point: 1.1640

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

1.2913     1.2941

1.2898     1.2954

1.2884     1.2969

Pivot point; 1.2926

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

104.56     104.92

104.40     105.12

104.20     105.28

Pivot point: 104.76

USD/JPY – Trading Tips

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

Categories
Forex Signals

USDJPY Swing Failure SELL

Location Assessment

  • Price has reached the H4 seller’s area for the first time and the overall daily flow (purple line in picture) is downwards
  • This makes us interested for sells

Flow Assessment

  • The overall daily flow is downwards and importantly, the move back up to the H4 sellers area is coming in multiple pushes, indicating that this is not a fresh trend swing
  • Hence, we maintain our overall sell bias

Momentum Assessment

  • We wait for signs of sellers showing interest at the H4 seller area via evidence of lower highs (LHs)
  • To be able to have smaller SL and better risk-reward, we wait for more confirmation via 2LHs first, then enter the trade with SL above the last LH
  • For targets, we simply look at the equal low marked by the weekly support (in yellow)
Categories
Forex Market Analysis

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

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

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

1.1637     1.1651

1.1631     1.1659

1.1623     1.1665

Pivot point: 1.1645

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

1.2913     1.2941

1.2898     1.2954

1.2884     1.2969

Pivot point; 1.2926

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

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

Daily Technical Levels

Support Resistance

104.51     104.66

104.45     104.75

104.35     104.81

Pivot point: 104.60

USD/JPY – Trading Tips

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

Categories
Forex Market Analysis

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

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

Economic Events to Watch Today  

 


 


EUR/USD – Daily Analysis

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

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

1.1798     1.1789

1.1672     1.1834

1.1626     1.1870

Pivot point: 1.1753

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

1.2909     1.3057

1.2839     1.3135

1.2762     1.3205

Pivot point: 1.2987

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

104.07     104.53

103.86     104.78

103.62     104.99

Pivot point: 104.32

USD/JPY – Trading Tips

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

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Forex Market Analysis

Daily F.X. Analysis, October 30 – Top Trade Setups In Forex – Series of GDP Ahead! 

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

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD pair’s prices were closed at 1.16742 after placing a high of 1.17587 and a low of 1.16500. The EUR/USD pair extended its previous daily losses and continued its bearish streak for the 4th consecutive session on Thursday. EUR/USD pair dropped to its more than one month lowest level on Thursday amid the broad-based U.S. dollar strength along with the rising number of lockdown restrictions in Europe.

The sharp decline in Euro against the U.S. dollar was derived by the European Central Bank’s decision on Thursday to hold its interest rates but gave signals that another monetary policy tool remains, and the bank would recalibrate its policy tools in December. As per the President of the European Central Bank, Christine Lagarde, it was necessary to cushion the European economy through pandemic and recalibrate its instruments at their next Governing Council meeting.

Lagarde refrained from expressing that the bank was looking at using all instruments rather than just topping up the 1.35 trillion euros PEPP at its upcoming Dec.10th meeting. Lagarde warned that the risks to the Eurozone recovery were tilted to the downside and suggested the pace to recovery or lack thereof would largely depend on the efforts of the economic bloc to contain the virus spread.

The growth of the Eurozone economy has come under pressure as the two biggest economies of the European Union, France, and Germany, have been forced to re-impose lockdown measures and raised the urgency to deliver more easing at the end of the year.

The Euro currency remained under pressure on Thursday after Lagarde’s comments and the central bank’s decision that ultimately added pressure on EUR/USD pair.

For October, the German Prelim CPI raised to 0.1% from the forecasted 0.0% and supported the single currency Euro on the data front. At 13:00 GMT, the Spanish Flash CPI for the year declined to -0.9% from the forecasted -0.4% and weighed on the single currency Euro that added pressure on EUR/USD pair. At 13:55 GMT, the German Unemployment Change for September came in as -35K against the forecasted -5K and supported the single currency Euro.

At 17:30 GMT, the Advanced GDP for the quarter raised to 33.1% from the estimated 32.0% and supported the U.S. dollar from the U.S. side. The Unemployment Claims for the previous week slipped to 751K from the anticipated 773K and supported the U.S. dollar. At 17:32 GMT, the Advance GDP Price Index for the quarter surged to 3.6% from the projected 2.9% and supported the U.S. dollar. At 19:00 GMT, the Pending Home Sales for September dropped to -2.2% from the projected 3.1% and weighed on the U.S. dollar. Most of the US-supported data weighed on EUR/USD pair towards the downside and added in the losses of the currency pair on Thursday.

Daily Technical Levels

Support Resistance

1.1798 1.1789

1.1672 1.1834

1.1626 1.1870

Pivot point: 1.1753

EUR/USD– Trading Tip

The EUR/USD traded with a bearish bias, having dropped to the support area of 1.1653. Above this, the pair has strong odds of taking a bullish turn until the 1.1700 area. Continuation of an upward trend may lead the EUR/USD price towards 1.1758, and bullish crossover of this area can lead the pair towards the 1.1820 level. Conversely, a bearish crossover of 1.1653 support level can extend selling until the 1.1613 area as a double bottom support area extends the level.  

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29126 after placing a high of 1.30255 and a low of 1.28806. The GBP/USD pair extended its previous daily losses and remained bearish on Thursday. The GBP/USD pair moved to its lowest level in almost 2-weeks and then recovered some of its losses in the late trading session on Thursday. The strength of the U.S. dollar drove the decline in the GBP/USD pair.

The U.S. dollar was strong due to the emerging risk-averse market sentiment and the strong macroeconomic data for the day. The delayed U.S. stimulus measure also helped the U.S. dollar to remain strong in the market. The U.S. Dollar Index (DXY) climbed above 94.00 level, its highest in almost a month, on Thursday as the risk-averse market sentiment emerged. The strong U.S. dollar added pressure on GBP.USD pair and dragged them to its 10-days lowest level.

On the data front, at 14:30 GMT, the M4 Money Supply for September raised 0.9% from the forecasted 0.3% and supported British Pound. At 14:32 GMT, the Mortgage Approvals raised to 91K from the forecasted 76K and supported British Pound. The Net Lending to Individuals came in line with the expectations of 4.2B. Britain’s data supported the local currency Sterling that capped further losses in the GBP/USD pair on Thursday.

From the U.S. side, at 17:30 GMT, the Advanced GDP for the quarter surged to 33.1% from the projected 32.0% and supported the U.S. dollar. The Unemployment Claims for the previous week fell to 751K from the estimated 773K and supported the U.S. dollar. At 17:32 GMT, the Advance GDP Price Index for the quarter advanced to 3.6% from the anticipated 2.9% and supported the U.S. dollar. At 19:00 GMT, the Pending Home Sales for September fell to -2.2% from the expected 3.1% and weighed on the U.S. dollar. The better than expected data from the U.S. supported the local currency U.S. dollar that added pressure on the declining GBP/USD pair’s prices.

On the Brexit front, the negotiations between the E.U. and U.K. were in progress with no headlines for the time being. However, the hopes were high that a deal could be reached this time as both sides were eager to solve the impasse given the limited time left for the end of the transition period. If a deal is reached, then British Pound will see a sharp rise in prices; however, analysts believe that a Brexit deal would likely offer only temporary relief for British Pound. They believe that Sterling’s near-term outlook will continue to be dominated by the late-stage Brexit negotiations that would include the significant trade frictions, the threat of tariffs and quotas.

It means that a Brexit deal between the E.U. and U.K. would not remove all the risks for British Pound and that sterling will still have to face further difficulties even after an agreement is reached.

Daily Technical Levels

Support Resistance

1.2909 1.3057

1.2839 1.3135

1.2762 1.3205

Pivot point: 1.2987

GBP/USD– Trading Tip

The GBP/USD is trading sharply bearish since the violation of the symmetric triangle pattern at the 1.3017 level, and the formation of bearish candles below the 1.3017 level has driven strong selling until the 1.2913 support area. For the moment, the Cable my lead GBP/USD price towards 1.3046 level for the sake of bullish correction. Conversely, the GBP/USD pair may find immediate support at 1.2913, and a bearish breakout of this level can be captured until the 1.2840 level.  

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.593 after placing a high of 104.725 and a low of 104.023. The USD/JPY pair rose on Thursday and posted gains after falling for two consecutive sessions on the back of the strong U.S. dollar and the better than expected macroeconomic data from the U.S., along with the disappointing data from Japan.

At 04:50 GMT, the Retail Sales from Japan for September dropped to -8.7% from the forecasted -7.5% and weighed on the Japanese Yen that added strength to the USD/JPY pair. At 10:00 GMT, the Consumer Confidence for October in Japan declined to 33.6 from the forecasted 35.2 and weighed on the Japanese Yen that supported the USD/JPY pair’s bullish move.

From the U.S. side, at 17:30 GMT, the Advanced GDP for the quarter advanced to 33.1% from the estimated 32.0% and supported the U.S. dollar. The Unemployment Claims for the previous week slipped to 751K from the anticipated 773K and supported the U.S. dollar. At 17:32 GMT, the Advance GDP Price Index for the quarter raised to 3.6% from the estimated 2.9% and supported the U.S. dollar. At 19:00 GMT, the Pending Home Sales for September declined to -2.2% from the projected 3.1% and weighed on the U.S. dollar.

The better than expected data from the U.S. gave strength to the U.S. dollar that ultimately added further gains to the USD/JPY pair on Thursday. Meanwhile, the U.S. dollar was also strong due to the comments from the Head of Congress and White House that signaled a tough road ahead for a coronavirus stimulus even after the next week’s U.S. election.

The U.S. Congress delivered a Coronavirus Aid, Relief, and Economic Security (CARES) stimulus worth about $3 trillion. Since then, the Democrats and the Republicans have been locked in a stalemate on a successive package to CARES. The differences have been over the size of the next relief bill among both parties. Over the last two weeks, the hopes that a coronavirus relief package will be delivered before elections faded away despite the months of negotiations between Democrats & Republicans. The investors thought that a deal might be reached after the election, regardless of the winner.

However, the Speaker of the House of Representatives, Nancy Pelosi, revealed on Thursday that these hopes that a package will be delivered after the elections without any difficulty were not right as Republicans were yet to answer her on funding for several critical areas. The uncertainty and lack of hopes that a stimulus will be delivered even after elections raised the U.S. dollar and added further gains in the USD/JPY pair on Thursday. However, the USD/JPY currency pair’s gains were limited due to the emerging risk-averse market sentiment in the market on Thursday.

Daily Technical Levels

Support Resistance

104.07 104.53

103.86 104.78

103.62 104.99

Pivot point: 104.32

USD/JPY – Trading Tips

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

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Forex Market Analysis

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

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

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

1.1779     1.1825

1.1762     1.1856

1.1732     1.1872

Pivot Point: 1.1809

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

1.3001     1.3081

1.2961     1.3121

1.2921     1.3161

Pivot Point: 1.3041

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

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

Daily Technical Levels

Support Resistance

104.22     104.73

104.05     105.07

103.70     105.25

Pivot point: 104.56

USD/JPY – Trading Tips

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

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Forex Videos

Forex! USDJPY Forecast – Support & Resistance Areas Explained!

Where next for USDJPY – Support and Resistance areas explained

Thank you for joining this Forex academy educational video. In this session, we will be looking at a daily chart of the US dollar Japanese yen pair and looking at support and resistance lines.

It has been a tumultuous few months for the US dollar Japanese yen pair. With a high in February of 112.00 down to a low a few weeks later in March of 101.16. Many investors will have been completely caught offside, and wins and losses for those who got it right or wrong will have been substantial.
When analyzed on the daily chart adding simple support and resistance lines, we see clear patterns emerging of price action and where the exchange rate forms peaks and troughs.
The fall in the pair from position A to position B was down to the coronavirus’s impact and where the Japanese yen is favored in times of such crisis due to its safe-haven status. However, this huge move had to become oversold, and of course, it did just above the key 101.00 level, and where we saw a rally back to position C, which incidentally is a step lower than position A. Typically, we find that institutional traders will pull out of a huge upside momentum trade slightly before a previous high, or a previous low if the situation was reversed because they fear that in this situation sellers are lurking at the previous high level, and that is proved when the pair pulls lower.


We then see a period of consolidation between positions D E and F. And a subsequent lower step to G and where the pair only manages a following high at position H, again a defined step lower than the previous high of position F.
Now things become interesting because price action fades in a tight consolidation period and at position 1 does not reach the previous high of position H and collapses down to position I. Again, we have a shift lower to position J and where we again see price not able to pull back to that resistance line at position 2, and price again begins to fade down to position K which incidentally is a double bottom formation aligned with position I.
These fading areas of price action are unable to reach previous highs, as shown by positions 1 and 2 and very strong telltale signs that price action is about to move lower. Obviously, the opposite applies. But with the USDJPY pair, we are looking for reasons to go short due to the overall fading trend and the nature of the yen being bought in times of uncertainty.


And with the market being extremely volatile right now and US elections only a few weeks, we can reasonably expect a continuation in the strength of the Japanese yen and, therefore, more movement to the downside in this pair.
Add these simple trend lines of resistance and support to your own charts and look out for fading price action to these lines, such as described in positions 1 and 2.

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Forex Market Analysis

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

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

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

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

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

1.1787     1.1845

1.1766     1.1882

1.1729     1.1904

Pivot point: 1.1824

EUR/USD– Trading Tip

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

GBP/USD – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

1.2985     1.3067

1.2947     1.3113

1.2902     1.3150

Pivot point: 1.3030

GBP/USD– Trading Tip

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

USD/JPY – Daily Analysis

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

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

104.18     105.35

103.68     106.00

103.02     106.51

Pivot point: 104.84

USD/JPY – Trading Tips

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

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Forex Market Analysis

Daily F.X. Analysis, October 27 – Top Trade Setups In Forex – C.B. Consumer Confidence in Play! 

On the news side, the eyes will remain on the economic events coming out of the U.S. economy. The Core Durable Goods Orders m/m and Durable Goods Orders m/m are expected to report mixed data that may or may not drive price action in dollar related events. While the C.B. Consumer Confidence will be the major highlight of the day, economists expect a slight movement on consumer confidence from 101.8 to 102.1 that may underpin the U.S. dollar today. 

Economic Events to Watch Today  

 


 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18-93 after placing a high of 1.18596 and a low of 1.18031. The EUR/USD pair moved in a bearish trend on Monday and lost most of its previous day gains. The EUR/USD pair fell on Monday amid the strong U.S. dollar and the rising number of coronavirus infections through Europe. The market turned risk-averse and weighed on the riskier EUR/USD pair that reversed its movement on Monday.

The rising number of coronavirus cases in Europe kept the shared currency under bearish pressure at the starting day of the week. Spain declared a state of emergency on Sunday for six-months and imposed a national curfew to control the spread of coronavirus. France has already placed a curfew, and it reported more than 50,000 new infections in a single day. On Monday, Italy also announced a national curfew to curb the coronavirus spread. Germany will reportedly introduce more restrictions later in the week.

On Monday, as the coronavirus situation was out of control in Europe, Germany’s DAX 30 and the Euro Stoxx 50 indexes lost more than 2%, reflecting the risk-off market sentiment that ultimately weighed on EUR/USD pair. Another factor involved in the market’s dismal sentiment was the lack of progress in the U.S. stimulus aid package. The U.S. advisor Larry Kudlow said that talks were slowed but not ended as the chances of a deal before the election were null, but investors were awaiting the post-election stimulus.

On the data front, at 14:00 GMT, the German Ifo Business Climate for October dropped to 92.7 from the projected 93.1 and weighed on single Currency Euro that added in the losses n EUR/USD pair on Monday. At 19:00 GMT, the New Home Sales from the U.S. also declined to 959K against the expected 1025K and weighed on the U.S. dollar that ultimately helped to limit the losses of the EUR/USD pair. The U.S. dollar was strong on Monday as the U.S. Dollar Index was up to 93 levels due to its safe-haven nature. The greenback rose on Monday as the global COVID-19 cases continue to soar and weigh on market sentiment. Furthermore, the rising number of infections in China decreased the appetite of risky assets like EUR/USD pair as the world’s second-largest economy could suffer a setback.

Looking forward, the Euro traders will await tomorrow for the release of the European Central Bank’s Lending Survey, and the U.S. dollar investors will be looking to September’s U.S. Durable Goods Orders report. The fresh developments surrounding the coronavirus outbreak in the continent will also remain under observation by EUR/USD pair’s investors.

Daily Technical Levels

Support Resistance

1.1839      1.1861

1.1828      1.1872

1.1817      1.1882

Pivot point: 1.1850

EUR/USD– Trading Tip

The EUR/USD is trading with a slightly bearish bias at the 1.1836 level, holding mostly below an immediate resistance level of 1.1865 area. Closing of candles below the 1.1866 level may drive selling bias until the 1.1811 level that marks 38.2% Fibonacci retracement level. Continuation of a selling bias may lead the EUR/USD pair further lower until 1.1770, the 50% Fibo level. Conversely, the bullish breakout of the 1.1866 area can open further room for buying until the 1.1910 level today. 


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.30230 after placing a high of 1.30749 and a low of 1.29928. The GBP/USD pair dropped and continued its previous bearish trend. The GBP/USD pair extended its losses on Monday and continued its bearish streak for the 4th consecutive day, dropping below 1.3000 level despite the Brexit deal optimism in the market mainly due to the broad-based U.S. dollar strength on the day.

The British Pound held steady against the rising U.S. dollar on Monday and shrugged off the renewed demand for the safe-haven greenback on expectations that the U.K. and the E.U. will eventually reach a Brexit deal after both sides agreed to push out the deadline to reach a consensus.

Last Thursday, Brexit talks were resumed and were extended to comping Wednesday when E.U. Brexit negotiator Michel Barnier is expected to attempt to bridge some of the differences between the U.K. and E.U.

It is also assumed that Barnier’s efforts to clinch a deal could revive hopes that German Chancellor Angela Merkel might be able to persuade French President Emmanuel Macron to ease his stance on one of the key sticking points of fishing rights. The United Kingdom has stressed that it would take control over the access to its waters after the Brexit transition period ends. On the other hand, Macron fears that a softer stance over fisheries will sacrifice the French fishermen.

On the other hand, the optimism on progress this week had been mitigated somewhat following reports that the U.K. was waiting until after the U.S. election to reveal its negotiation strategy as a blue wave could weaken Britain’s negotiation stance. Joe Biden has previously said that a UK-US deal would depend on Britain securing a deal with the E.U. These concerns also weighed on British Pound and GBP/USD. However, the British Prime Minister Boris Johnson said that Brexit and the U.S. election results were entirely separate.

On the data front, at 19:00 GMT, the U.S. economic docket released the report of New Home Sales that dropped to 959K from the anticipated 1025Kand weighed on the U.S. dollar that eventually helped GBP/USD pair in capping further losses. Moreover, the GBP/USD pair’s losses could be attributed to the rising number of coronavirus cases in the U.K. As well as the rising fears of the second wave of coronavirus and its impact globally raised the safe-haven demand for greenback that ultimately added pressure on GBP/USD pair on Monday.

The developments surrounding the U.S. stimulus package also kept the U.S. dollar stronger as the package will not be delivered before the election. The stronger U.S. dollar weighed further on the GBP/USD pair on the day.

Daily Technical Levels

Support Resistance

1.3040      1.3064

1.3028      1.3076

1.3016      1.3088

Pivot point: 1.3052

GBP/USD– Trading Tip

The GBP/USD traded with a selling bias below an immediate resistance area of 1.3075. Below this, Cable has closed a bearish engulfing candle that may drive selling bias until the 1.3013 level. Violation of 1.3013 level can open further room for selling until 1.2965 area, the level that’s extending support due to upward trendline on the 4-hour timeframe. The MACD and RSI are in support of selling bias today. Consider opening sell trades below the 1.3075 level today. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.866 after placing a high of 105.053 and a low of 104.651. The USD/JPY pair remained bullish on Monday and recovered most of the previous daily losses. The USD/JPY pair rose to its highest level in five days above 105 level on Monday. However, it erased a large portion of its gains on the day during the American session.

The broad-based U.S. dollar strength caused the rise in the USD/JPY pair on the day due to its safe-haven status. The selling pressure surrounding the major European currencies on concerns over the rising number of coronavirus cases in the continent also helped the U.S. dollar outperform its rivals. The U.S. Dollar Index that was dropped 1% last week posted a decisive recovery on the starting day of this week and was up by 0.32% on the day at 93.04.

The rising U.S. dollar Index pushed the USD/JPY pair above the 105 level on Monday. However, investors saw this as a selling opportunity regardless of the U.S. dollar strength, and hence, the pair started losing most of its daily gains in the late trading hours. On the data front, at 04:50 GMT, the SPPI for the year from Japan raised to 1.3% against the forecasted 1.0% and supported the Japanese Yen that capped further gains in the USD/JPY pair on Monday.

At 19:00 GMT, the New Home Sales from the U.S. for September fell to 959K from the forecasted 1025K and weighed on the U.S. dollar that also limited further upside in the USD/JPY pair on the day.

The U.S. dollar was also strong on Monday as the talks for the next round of U.S. stimulus measures were stalled till the election. Both parties were moving forward to reach a consensus over the stimulus aid package’s size, but they delayed the delivery of major measures after the election. This raised the U.S. dollar on board and pushed the USD/JPY pair even higher on Monday. Other than that, the U.S. dollar was also up due to rising demand for its safe-haven nature amid the rising number of coronavirus cases globally. France reported 50,000 new cases in a single day and introduced a curfew to curb the virus’s spread. 

Just like that, many European nations, including Italy and Spain, also introduced curfews and restrictive measures. Germany was set to impose restrictions this week and not only in European nations, but the second wave of coronavirus was also spreading worldwide. These concerns weighed on market risk sentiment and raised demand for the greenback that ultimately added strength to the USD/JPY pair on Monday.

Looking forward, the investors will await the release of Durable Goods Orders and the Conference Board’s Consumer Confidence data that will release on Tuesday.

Daily Technical Levels

Support Resistance

104.18      105.35

103.68      106.00

103.02      106.51

Pivot point: 104.84

USD/JPY – Trading Tips

The oversold USD/JPY pair is taking a bullish turn now, perhaps to complete Fibonacci retracement at 104.900 level. A 38.2% Fibonacci retracement level extends this level, and it may extend resistance to the USD/JPY pair today. Continuation of a bullish bias over the 104.900 level can lead the USD/JPY pair further higher until the 105.225 level. The MACD and RSI are also supporting bullish bis in the USD/JPY pair today. However, the pair seems to have formed a bearish flag on the 4-hour timeframe that typically breakout on the lower side; if that happens, we may see USD/JPY price dropping until the 104.350 mark. Good luck! 

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Forex Market Analysis

Daily F.X. Analysis, October 26 – Top Trade Setups In Forex – New Home Sales in Play! 

On Monday, the market is likely to exhibit thin trading volume and volatility in the wake of the Labor day holiday in New Zealand, while the other economies are expecting to release low impact events that may keep the market unchanged. Most of the focus will stay on the U.S. New Home Sales data that may help drive some market volatility today. 

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18562 after placing a high of 1.18646 and a low of 1.17865. The movement of the EUR/USD pair was bullish on Friday. Things in European nations were getting out of control and led the governments to impose further restrictions to curb coronavirus’s effect on the economy. France, Italy, and Spain reported a record rise in the daily infection cases that urged their governments to impose curfews and lockdowns.

However, the single currency managed to remain bullish on Friday despite the rising number of coronavirus cases in Europe as the focus of traders shifted more towards the U.S. dollar. The coronavirus condition in the U.S. was also not better as the country reported a record-high number of 82,668 cases in a single day and weighed on the U.S. dollar that ultimately supported the bullish trend of the EUR/USD pair on Friday.

On the data front, at 12:15 GMT, the French Flash Services PMI for October dropped to 46.5 against the forecasted 47.0 and the previous 47.5 and weighed on Euro. The French Flash Manufacturing PMI came in as 51.0 against the expected 51.3 and previous 51.2. AT 12:30 GMT, the German Flash Manufacturing PMI raised to 58.0 against the expected 55.0 and previous 56.4 and supported the single currency. Simultaneously, the German Flash Services PMI raised to 48.9 against the expected 49.6 and previous 50.6 and weighed on the single currency Euro.

At 13:00 GMT, the Flash Manufacturing PMI from Eurozone for October raised to 54.4 against the projected 53.0 and previous 53.7 and supported the single currency Euro. Whereas the Flash Services PMI from the whole bloc dropped to 46.2 from the anticipated 47.1 and the previous 48.0, it also weighed on the single currency Euro. At 17:59 GMT, the Belgian NBB Business Climate from Europe came in as -8.5 against the forecasted -11.2 and supported the single currency. The Eurozone’s macroeconomic data was mixed and failed to provide any meaningful direction to the currency pair EUR/USD on Friday.

From the U.S. side, at 18:45 GMT, the Flash Manufacturing PMI came in line with the expectations of 53.5 for October. The Flash Services PMI from the U.S. for October advanced to 56.0 from the projected 54.7 and supported the U.S. dollar that ultimately capped further gains in EUR/USD pair.

Another factor that kept the additional gains in EUR/USD pair supported was the improved risk sentiment as President Donald Trump and Democratic Joe Biden took part in the final debate of the presidential election campaign in Nashville, Tennessee. The final debate was far more civilized than the previous one, and it potentially led to an additional tightening in the polls that raised the risk sentiment in the market and supported the EUR/USD pair.

Daily Technical Levels

Support Resistance

1.1796     1.1853

1.1776     1.1888

1.1740     1.1909

Pivot point: 1.1832

EUR/USD– Trading Tip

The EUR/USD is trading with a slightly bearish bias at the 1.1836 level, holding mostly below an immediate resistance level of 1.1865 area. Closing of candles below the 1.1866 level may drive selling bias until the 1.1811 level that marks 38.2% Fibonacci retracement level. Continuation of a selling bias may lead the EUR/USD pair further lower until 1.1770, the 50% Fibo level. Conversely, the bullish breakout of the 1.1866 area can open further room for buying until the 1.1910 level today. 


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.30400 after placing a high of 1.31221 and a low of 1.30189. Overall the movement of the GBP/USD pair remained bearish throughout the day. The GBP/USD pair was down on Friday as the U.S. dollar gained traction on board and made GBP/USD pair weak. As well As, the retreat inequity and risk sentiment also hit the Pound that dropped to fresh lows.

Wall Street’s equity prices went lower on Friday and raised the greenback on board that ultimately dragged GBP/USD pair on the downside. The Dow Jones was down by 0.10%, and NASDAQ was down by 0.18%. The expectations for a new round of fiscal stimulus by the U.S. government before elections faded away and supported the U.S. dollar that ultimately weighed on GBP/USD pair.

Meanwhile, the Chief EU Brexit negotiator Michel Barnier will provide his weekly assessment of the talks and could point to a lack of meaningful progress despite intensifying talks. The British Brexit negotiator, David Frost, could also do that, and these concerns kept the British Pound under pressure at the ending day of the week.

However, the cautious optimism was prevailing in the market as the E.U. and U.K. had resumed talks related to the Brexit deal. The French President has said to the local fishing industry to brace for an impact that indicated a close deal. Whereas the investors were still cautious as talks could be bent on either side, British Pound remained under pressure ahead of the talks’ results. Moreover, the rising number of coronavirus cases in the United Kingdom pressured the authorities to impose a new full lockdown; however, some were refusing to do so as it had already cost the economy too much. These tensions in the local country also kept the British Pound under pressure.

On the data front, at 04:01 GMT, the GfK Consumer Confidence from Great Britain dropped to -31 against the expected -28and weighed on British Pound and added losses in GBP/USD pair. At 13:30 GMT, the Flash Manufacturing PMI for October remained flat with the anticipated 53.3, and the Flash Services PMI dropped to 52.3 against the projected 53.4 and weighed on British Pound and pulled the pair GBP/USD even lower.

From the U.S. side, at 18:45 GMT, the Flash Manufacturing PMI came in line with the anticipations of 53.5 for October. The Flash Services PMI from the U.S. for October raised to 56.0 from the expected 54.7 and supported the U.S. dollar that ultimately dragged the GBP/USD pair on the downside on Friday.

Daily Technical Levels

Support Resistance

1.3049     1.3129

1.3021     1.3179

1.2970     1.3208

Pivot point: 1.3100

GBP/USD– Trading Tip

The GBP/USD traded with a selling bias below an immediate resistance area of 1.3075. Below this, the cable has closed a bearish engulfing candle that may drive selling bias until 1.3013 level. Violation of 1.3013 level can open further room for selling until 1.2965 area, the level that’s extending support due to upward trendline on the 4-hour timeframe. The MACD and RSI are in support of selling bias today. Consider opening sell trades below the 1.3075 level today. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.695 after placing a high of 104.934 and a low of 104.545. The USD/JPY pair moved in a bearish trend throughout Friday. The USD/JPY pair fell on Friday after the final presidential debate between U.S. President Donald Trump and Joe Biden before the November 3rd election.

The Final debate between two presidential candidates took place in Nashville, Tennessee. This final debate was more restrained than the first one. The center of the discussion was on policy rather than a personal attack.

It looked like investors were closing their long positions ahead of the elections and were hesitant to place any big position ahead of November 3 as polls before the final debate turned, so it became difficult to project the outcome of elections.

Investors were also keeping a close eye on the negotiations between House of Representative Speaker Nancy Pelosi and the U.S. Treasury Secretary Steven Mnuchin over the next round of U.S. stimulus package. Pelosi has expressed optimism that a consensus could be reached. In contrast, the expectations that a U.S. stimulus package could be delivered before elections faded away as the date of the election has come closer.

These hopes that a stimulus relief bill could not be delivered ahead of elections, whether both parties agreed on the package’s size as the election was only a week away, supported the U.S. dollar and capped further losses in the USD/JPY pair on Friday.

On the data front, at 04:30 GMT, the National Core CPI from Japan for the year came in as -0.3% against the forecasted -0.4% and supported the Japanese Yen that added in the USD/JPY’s losses. At 05:30 GMT, the Flash Manufacturing PMI dropped to 48.0 from the projected 48.4 and weighed on the Japanese Yen.

Daily Technical Levels

Support Resistance

104.18     105.35

103.68     106.00

103.02     106.51

Pivot point: 104.84

USD/JPY – Trading Tips

The oversold USD/JPY pair is taking a bullish turn now, perhaps to complete Fibonacci retracement at 104.900 level. This level is extended by a 38.2% Fibonacci retracement level, and it may extend resistance to the USD/JPY pair today. Continuation of a bullish bias over the 104.900 level can lead the USD/JPY pair further higher until the 105.225 level. The MACD and RSI are also supporting bullish bis in the USD/JPY pair today. However, the pair seems to have formed a bearish flag on the 4-hour timeframe that typically breakout on the lower side; if that happens, we may see USD/JPY price dropping until the 104.350 mark. Good luck! 

Categories
Forex Market Analysis

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

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

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support    Resistance

1.1828     1.1889

1.1795     1.1915

1.1768     1.1949

Pivot Point: 1.1855

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support    Resistance

1.3049     1.3129

1.3021     1.3179

1.2970     1.3208

Pivot point: 1.3100

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

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

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

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

Daily Technical Levels

Support    Resistance

104.18     105.35

103.68     106.00

103.02     106.51

Pivot point: 104.84

USD/JPY – Trading Tips

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

Categories
Forex Market Analysis

Daily F.X. Analysis, October 22 – Top Trade Setups In Forex – U.S. Jobless Claims In Focus! 

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

Economic Events to Watch Today  

  


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18609 after placing a high of 1.18806 and a low of 1.18209. The EUR/USD pair extended its previous day’s gains and rose for the 4th consecutive session on Wednesday to reach its highest since mid-September. Despite the alarming comments from ECB President Christine Lagarde, the EUR/USD pair managed to post gains on Wednesday over the U.S. dollar’s weakness and improved risk sentiment.

The U.S. Dollar Index was down by 0.5% and fell to its seven-week lowest level on Wednesday to 92.46 over fresh hopes that the U.S. stimulus package for coronavirus would release soon. The hopes were encouraged by the comments of U.S. President Donald Trump, who said that he was ready to accept a larger coronavirus-relief package. This boosted investor’s optimism that eventually led to rising risk sentiment and increasing pressure on the safe-haven U.S. dollar. The U.S. dollar weakness added further strength to the already rising EUR/USD pair’s prices on Wednesday.

According to the White House spokesperson, Allysa Farah, she was optimistic that a fiscal deal between Democrats and Republicans would reach soon as Trump has suggested that he accept the $2.2 trillion bill proposed by Democrats. However, Senate Republicans have made it public that they will oppose a larger bill.

On Wednesday, the President of the European Central bank, Christine Lagarde, said in a pre-recorded interview that the economic outlook was under clear risk due to an unexpected early pickup in coronavirus infections. She said that more scientists in the Eurozone were expecting the epidemic’s resurgence in November or December with the cold. Lagarde’s concerning statements weighed on the single currency Euro and capped further gains in EUR/USD pair on Wednesday.

The central bank of Europe is set to hold a governing council next week to decide on its monetary policy. The majority of economists expect no change in policy until December. ECB is expected to ramp up its 1.35 trillion pandemics bond-buying program at its last policy meeting in 2020.

These expectations also weighed on the single currency Euro and capped further gains in currency pair EUR/USD.

Meanwhile, the number of coronavirus cases in Europe is continuously setting fresh records. However, market participants are ignoring the issue; it still holds some importance in driving the EUR/USD pair as there was no macroeconomic data to be released from Europe or the U.S. On Thursday, Europe will publish the Consumer Confidence Report, and the U.S. will publish its initial jobless claims from last week that will have a major impact on EUR.USD pair’s movements.

Daily Technical Levels

Support Resistance

1.1773     1.1854

1/1725     1.1889

1.1691     1.1936

Pivot point: 1.1807

EUR/USD– Trading Tip

The EUR/USD is trading sharply bullish amid a weaker U.S. dollar to trade at 1.1848 level, and the has formed inside bar down, which suggests that the bullish bias is getting weaker and sellers may dominate the market. On the lower side, the EUR/USD can go for bearish correction until the 1.1819 level that marks the 38.2% Fibonacci retracement level. Continuation of further selling trends can lead the EUR/USD price towards a 1.1800 mark, and below this, the next support level stays at 1.1765. The MACD and RSI are also supporting the bearish bias now. The bearish bias remains dominant today. 


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.31461 after a high of 1.31765 and a low of 1.29332. On Wednesday, the GBP/USD pair followed its previous daily trend and rose for 3rd consecutive day. The British Pound jumped higher on the day by 1.6% and reached its highest since September 7.

The recent jump in British Pound against the U.S. dollar came in as the E.U. and the U.K. were set to resume talks after Britain welcomed the bloc’s desire to break the impasse in negotiations. The post-Brexit talks are set to resume on Thursday after the E.U. Brexit negotiator Micheal Barnier said a deal was in reach and pledged to seek the necessary compromises on both sides. He added that an agreement has reached within and if both sides were willing to work constructively and compromise despite the difficulties.

Great Britain signaled that it was ready to intensify talks to soften the key sticking issues included fisheries and sovereign aid. Micheal Barnier believed that sovereignty was a legitimate concern for the U.K., and E.U. would have to compromise. These developments in Brexit talks gave strength to British Pound and supported GBP/USD pair on Wednesday to post gains.

On the data front, at 11:00 GMT, the CPI for the year from Great Britain was released as 0.5% against the forecasted 0.4% in September and supported British Pound. The Core CPI for the year was also released and came in as expected by 1.3%. The Public Sector Net Borrowing advanced to 35.4B against the forecasted 32.5B and weighed on GBP. The RPI for the year also dropped to 1.1% against the expected 1.2% and weighed on GBP.

At11:03 GMT, the United Kingdom’s PPI input raised to 1.1% against the forecasted -0.9% and raised British Pound. However, at 12:30 GMT, the PPI output remained flat at -0.1%. The Housing Price Index for the year from Pound also came in line with 2.5% expectations.

The rising CPI and PPI Input data supported the bullish momentum of the GBP/USD pair on Wednesday.

The British Pound was also helped by easing fears over negative interest rates after Deputy Bank of England Governor Dave Ramsden said that cutting rates below zero could hamper lending activity. He also said that there might be an appropriate time to use negative interest rates, but this was not that time. These comments also gave strength to British Pound and raised the GBP/USD pair on Wednesday.

Meanwhile, the U.K. reported 26,688 coronavirus cases on Wednesday in comparison to Tuesday’s 21,331 cases. The rising number of coronavirus infections from the U.K. forced the government to impose new lockdown measures in the country’s parts. These lockdowns also held the upward trend of the GBP/USD pair on Wednesday.

On the U.S. front, the stimulus package talks were resumed after U.S. President Donald Trump agreed to increase the stimulus package’s size. The renewed hopes for a stimulus package before elections weighed on the U.S. dollar, which added further strength to the rising GBP/USD pair on Wednesday.

Daily Technical Levels

Support Resistance

1.2997     1.3220

1.2864     1.3310

1.2774     1.3443

Pivot point: 1.3087

GBP/USD– Trading Tip

The GBP/USD soared sharply to trade at the 1.3170 level, and recently, it has entered the overbought zone. Below 1.3170, we may see the GBP/USD price trading bearish to complete 23.8% Fibo level and 38.2% Fibo level at 1.3100 and 1.3068 level. Continuation of a bearish trend can lead the Cable towards the 1.3006 level that marks a 61.8% Fibo level. The cable may face resistance at 1.3170 level today. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 104.580 after placing a high of 105.523 and a low of 104.339. The USD/JPY pair reversed its previous day momentum and fell on Wednesday to its one-month lowest level on the back of fresh U.S. dollar weakness. The pair hit 104.339 level, the lowest level since September 21 after U.S. President Donald Trump boosted for a larger stimulus package. This report prompted some investors to move toward riskier assets and dampened the safe-haven appeal for the greenback.

The price action from the USD/JPY traders suggested that traders were betting heavily on the news that there might be a stimulus by this weekend and ignored the signs of opposition from Trump’s Republican Party.

The Senate Majority Leader Mitch McConnell provided no timetable for a relief bill and said that he was not in favor of larger stimuli before elections. Whereas, the White House Chief of Staff Mark Meadows preserved the hopes for a stimulus deal and said on Wednesday that he was very hopeful that progress was being made in the negotiations. He added that both parties would remain under talks over the coming days.

The U.S. Treasury yields held near their highest levels in four months on Wednesday over the expectations that a deal might be reached. The 10-year Treasury yield was up by 1.5 basis points and touched its fresh four months high at 0.84%. This weighed on the U.S. dollar and added further pressure on the USD/PY pair.

The Federal Reserve issued it Beige Book on Wednesday that revealed that economic activity was continuously increasing across all districts with a pace of growth characterized as slight to modest in most districts.

The USD/JPY pair’s main driver on Wednesday remained fresh hopes for a stimulus package as there was no macroeconomic data to be released on the day. The focus was entirely on the relief bill, where Nancy Pelosi also affirmed that she was optimistic about the chances of reaching an agreement before the U.S. Presidential elections.

Daily Technical Levels

Support Resistance

104.18     105.35

103.68     106.00

103.02     106.51

Pivot point: 104.84

USD/JPY – Trading Tips

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

Categories
Forex Market Analysis

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

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

Economic Events to Watch Today  

 


 


EUR/USD – Daily Analysis

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

1.1773     1.1854

1.1725     1.1889

1.1691     1.1936

Pivot point: 1.1807

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support Resistance

1.2910     1.2980

1.2875     1.3015

1.2841     1.3049

Pivot point: 1.2945

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

These faded hopes also supported the U.S. dollar and added further strength to the rising USD/JPY pair on Tuesday.

Meanwhile, on Tuesday, the U.S. Federal Reserve Vice Chair Randal Quarles said that the nonbank financial system was significantly more fragile than its traditional counterparts, and it has been confirmed by the market stresses created by the coronavirus pandemic. Furthermore, the Philadelphia Federal Reserve Bank President Patrick Harker said that Fed’s new framework should help address shortfalls in employment and help affected workers find new opportunities. He said that tolerating higher inflation will be worth it to help achieve employment goals. These comments from Fed officials also supported the USD/JPY pair’s bullish move on Tuesday.

Daily Technical Levels

Support Resistance

105.33     105.69

105.18     105.90

104.96     106.05

Pivot point: 105.54

USD/JPY – Trading Tips

The USD/JPY trades with a bearish bias around the 105.250 level, having violated the upward channel at the 105.450 level. Closing of candles below this level may lead the USD/JPY pair towards the 105 mark; however, it needs to violate the immediate support area of 105.285. Closing of candles below 105.285 may help us capture quick selling trades until the 105 level. The USD/JPY has recently closed a bearish engulfing candle, and it has also violated the upward channel; both of these are supporting further selling trend in the USD/JPY pair today.  

Good luck!  

Categories
Forex Market Analysis

Daily F.X. Analysis, October 20 – Top Trade Setups In Forex – European Events in Highlights! 

On the news front, the economic calendar is filled with a series of low impact economic events. However, the focus will remain on the German PPI m/m and Current Account from the Eurozone, and the point to note is that both of the data are expected to be positive so that it may underpin the Euro today. Besides, the FOMC Member Williams and Quarles speeches will be monitored for further price action. 

Economic Events to Watch Today  

 


 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17708 after placing a high of 1.17936 and a low of 1.17030. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD pair was up on Monday and tried to approach the 1.1800 arear as the hopes of a U.S. stimulus package weighed on the U.S. dollar. 

The U.S. dollar was weak across the board due to mounting hopes that the U.S. stimulus package will be delivered soon and the encouraging Chinese data published on the day in early trading sessions. It was revealed that Republicans added 0.1 trillion dollars to its previous $1.8 trillion package offer to reach a consensus with Democrats. The Democrats, however, still found it difficult to reach a deal with republicans.

However, the hopes were increased in the market for U.S. stimulus as Republicans were making progress in compromising. This weighed on the U.S. dollar and helped the EUR/USD pair to extend its gains. On China’s front, the data from there reported its GDP at 4.9% in Q3 that was below the expectations of 5.2% and above the previous 3.2%. The U.S. dollar came under pressure because of China’s good performance in Q3 than Q2 and supported the EUR/USD pair’s upward momentum.

On Monday, the European Central Bank President Christine Lagarde said that she wanted E.U. governments to consider the possibility of making E.U. debt a permanent fixture of the bloc’s economic response to the crises. When asked about the 750 billion euros debt-fueled response to the coronavirus crisis, the E.U. commission will borrow on financial markets and disburse to E.U. countries as grants and loans; Lagarde said that this stimulus tool was a response to an exceptional situation like a pandemic. She added that there should be a discussion about this stimulus’s possibility to remain in the European toolbox to be mobilized again in identical circumstances.

Lagarde added that a debate on a common budgetary tool specific to the Euro area should take place and learn lessons from the situation that has happened recently. These comments from Lagarde added further strength to the already rising Euro currency and added additional gains. On the coronavirus front, Belgium extended its restrictions on bars and restaurants for the next four weeks as the infection rate rose continuously. The health minister warned that Belgium could soon be overwhelmed by new coronavirus infections.

Italy recorded its highest daily infection rate on Sunday and announced a raft of measures to control infection spread. Meanwhile, nine major French cities were also placed under curfew. However, these lingering coronavirus tensions failed to reverse the rising EUR/USD pair, and the currency pair remained on the positive track on Monday.

Daily Technical Levels

Support Resistance

1.1709     1.1723

1.1703     1.1731

1.1695     1.1737

Pivot point: 1.1717

EUR/USD– Trading Tip

The EUR/USD is consolidating below a strong resistance level of 1.1793 level, extended by a downward trendline on the 4-hour timeframe. On the lower side, the EUR/USD may find support at the 1.1735 level, and violation of this support level can extend selling until the 1.1690 level. On the higher side, bullish trend continuation can lead the EUR/USD price towards the next target level of the 1.1830 mark. The MACD supports bullish bias; therefore, we should look for buying trades upon today’s breakout of the 1.1790 level. 


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29827 after placing a high of 1.30244 and a low of 1.28912. The British Pound eased from session highs on Monday against the U.S. dollar but remained supported as the E.U. assured that it would remain committed to intensifying Brexit-deal talks with the U.K. The E.U. Brexit negotiator Michel Barnier confirmed that the E.U. remained available to intensify negotiations in London. This marked a change in tone after E.U. leaders dropped their pledge to intensify trade talks last week and called on the U.K. to make concessions for a deal. Barnier’s statement raised the possibility of a Brexit deal and helped GBP/USD pair to remain positive on Monday.

The U.K. Cabinet Office Minister Michael Gove had suggested that the U.K. would not resume talks before acknowledging signs of progress. He also said that he welcomes the constructive move on the part of the E.U. However, he said that there was no basis to find an agreement and that Brussel’s proposals were inconsistent with sovereign status. He also labeled potential talks as meaningless.

The pair GBP/USD was raised during the early trading session but failed to extend gains and eased due to Gove’s statement. Michael Gove said that the U.K. was increasingly well-prepared for an Australian-style exit from the E.U., meaning no-deal. The mixed statements from Barnier and Gove confused the traders, and the currency pair suffered from it as it moved on the upside in the early session and lost most of its gains in the late session.

On the data front, at 04:01 GMT, the Rightmove Housing Price Index for October came in as 1.1% compared to the previous 0.2%. From the U.S. side, the NAHB Housing Market Index rose to 85 from the forecasted 83 and supported the U.S. dollar that limited GBP/USD pair gains on Monday.

Meanwhile, the rising number of coronavirus in the U.K. also weighed on GBP/USD pair as an 18,804 new cases were reported for COVID-19 in the U.K. on Monday with 80 new deaths. This also kept the pair under pressure and its gains limited on the day.

Daily Technical Levels

Support Resistance

1.2900     1.2941

1.2874     1.2956

1.2859     1.2982

Pivot point: 1.2915

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

The USD/JPY pair was closed to 105.430 after placing a high of 105.501 and a low of 105.299. Overall the movement of the USD/JPY pair remained bullish throughout the day. Despite the U.S. dollar weakness, the USD/JPY pair posted gains on Monday and remained bullish as the U.S. stimulus package deal’s developments started moving on the positive side. The market mood was also better and played against the greenback after releasing the GDP report from China.

The Republicans extended its previous offer of $1.8 trillion to a $1.9 trillion packages on Monday, which was again failed by Democrats. The U.S. President Donald Trump has expressed his willingness for a larger stimulus package, but he still has to convince Republicans. Whereas, the U.S. House Speaker Nancy Pelosi has set out a 48-hour deadline for U.S. stimulus talks in the last effort to reach a deal before the elections.

Before elections, the hopes for a stimulus package dimmed and supported the U.S. dollar and raised the USD/JPY pair on Monday.

Meanwhile, China published its GDP report for the third quarter that came in as 4.9% and fell short of the forecasted 5.5% but extended compared to the previous 3.2%. The U.S. dollar came under pressure because of the Chinese GDP report and further capped gains in the USD/JPY pair on Monday.

On the data front, at 04:50 GMT, the Trade Balance from Japan for September came in as 0.48T against the forecasted 0.85T and weighed on the Japanese Yen. At 19:00 GMT, the NAHB Housing Market Index for October raised to 85 from the forecasted 83 and supported the U.S. dollar that pushed the USD/JPY pair even higher. Meanwhile, the Fed Chair Jerome Powell said in his speech on Monday that it should be more important for the U.S. to get the development of CBDC- cross-border digital currency right than being the first one to issue it.

China has given away about $1.5 million for its digital currency trials and has said that it would become the first to issue a CBDC. China wanted to reduce its dependence on the global dollar payment system and has taken the initiative to issue its digital currency.

Following China’s move, many central banks worldwide have started examining the possibility of issuing a digital currency. Facebook has also announced introducing Libra, its digital currency, given the increased demand for digital payments during the COVID-19 pandemic.

The Bank for International Settlements (BIS) and the seven other central banks, including the U.S. Fed and Bank of England, have released a report that tells the importance of CBDC to catch up with China’s move be the first one. According to Powell, the U.S. Fed has not yet decided on the issuance of digital currency, but it has been an active participant in research into the issue.

Moreover, the Federal Reserve Vice Chair Richard Clarida said on Monday that after taking a substantial hit from the pandemic, the U.S. economy was rebounded strongly. He said that it might take another year to reach pre-pandemic economic levels, but the labor market could take more than that to recover the pandemic’s damage. Fed officials’ comments also weighed on the U.S. dollar and caped further gains in the USD/JPY pair on Monday.

Daily Technical Levels

Support Resistance

105.37     105.50

105.28     105.56

105.23     105.64

Pivot point: 105.42

USD/JPY – Trading Tips

The USD/JPY trades with a bullish bias around the 105.550 level, holding below the double bottom area. Bullish crossover of 105.550 level may lead USD/JPY pair further higher until 105.800 level. On the 2 hour chart, the USD/JPY has formed an upward channel, which is likely to support the USD/JPY pair around the 105.300 level. Below this, the next support is likely to be found around 105.250 and 105.06. Let’s consider opening sell trade beneath 105.60 and buying over 105.050 level today. Good luck!  

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Forex Signals

USDJPY Swing Failure Buy

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Forex Market Analysis

Daily F.X. Analysis, October 16 – Top Trade Setups In Forex – Retail Sales in Focus! 

On the news side, the economic calendar is likely to offer another round of central bankers’ speeches worldwide. BOC Gov Council Member Lane, U.S. FOMC officials, is due to speak today. Simultaneously, the main highlight of the day is likely to be ECB President Lagarde Speaks and Unemployment Claims from the U.S. economy.

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17068 after placing a high of 1.17576 and a low of 1.16883. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD pair dropped on Thursday to its nine-day lowest level over the strength of the U.S. dollar and rising fears of a second wave of coronavirus in Europe. 

The U.S. dollar was strong across the board on Thursday, with the market ruling out the chance of more fiscal stimulus before the November elections despite the surge in coronavirus cases. Furthermore, the unexpected rise in the Philadelphia Fed Manufacturing Index also helped raise the U.S. dollar across the board on Thursday. At 17:30 GMT, it raised to 32.3 in October against the expectations of 14.4 and supported the U.S. dollar. The advanced index encouraged hopes that the U.S. economy could demonstrate greater resilience in the year’s final months.

This raised the U.S. dollar despite the rise in initial jobless claims and weighed on EUR/USD pair.

Meanwhile, the E.U. Summit started on Thursday. E.U. leaders met in Brussels to seek a way out of the Brexit impasse as the bloc remained divided over-ambitious targets to slash greenhouse gas emissions.

E.U. leaders also agreed to extend the trade negotiations with Britain. In a joint statement, E.U. leaders called on the U.K. to make the necessary moves to make an agreement possible and shift from their red lines to make a Brexit deal possible.

The E.U. chief negotiator Michel Barnier said that he wanted talks to continue with the U.K. till next month. Whereas, the German Chancellor Angela Merkel said that the E.U. should also compromise with the U.K. to reach a final agreement. On the data front, the French Final CPI for September came in line with -0.5% expectations. The data from Europe failed to impact the prices of a single currency.

Moreover, the European Central Bank President Christine Lagarde said on Thursday that ECB would be prepared to inflict additional emergency measures to seize the economic fallout from the coronavirus crisis, with the region facing a rapid surge in coronavirus infections. As per the World Health Organization, Europe has recorded more than 7.4 million coronavirus cases, with more than 251000 deaths and an alarming hospitalization rate. Lagarde said that as the second wave of coronavirus was hitting Europe’s coastline, ECB should make sure all the resources that ECB has available will be used to deal with the situation. She added that many resources, including asset purchases and interest rates, were still available, and ECB was ready to use them in need.

The ECB’s concerns and readiness to use further stimulus in need also weighed on Euro currency and dragged the EUR/USD pair downward.

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 at 1.29037 after placing a high of 1.30299 and a low of 1.28903. Overall the movement of the GBP/USD pair remained bearish throughout the day. The British Pound fell dramatically against the U.S. dollar on Thursday after the E.U. leaders urged U.K. to make necessary moves to secure an agreement instead of committing to work intensively with the U.K. to reach a trade deal. 

After the first day of the E.U. Summit, the chief EU negotiator Michel Barnier said that the level playing field, fisheries, and governance issues remained, as the key sticking points that held up the progress on trade talks. E.U. officials also criticized the U.K. Brexit negotiator David Frost and called on the U.K. to make further concessions to reach a deal on trade. Prime Minister Boris Johnson will announce his decision on whether the U.K. will walk away or continue talks on Friday.

One of many reasons behind the lack of progress in talks was the U.K. facing an aggressive second wave of the coronavirus that has forced the government to impose lockdown restrictions that could slow the recovery.

In Great Britain, talks continued between the government and local leaders over expanding the strictest coronavirus restrictions to more parts of England. The rising number of coronavirus cases in the U.K. raised the need for restrictions that will affect the economic recovery. These recovery fears weighed on local currency and ultimately dragged the GBP/USD pair on the downside.

On the data front, the C.B. Leading Index from the United Kingdom came in as 0.5% for August compared to July’s 0.8% and weighed on GBP that added further pressure on GBP/USD pair. From the U.S. side, the Philly Fed Manufacturing Index rose in October to 32.3 from September’s 15.0, and the forecasted 14.4 supported the U.S. dollar. The strong U.S. dollar added further strength to the rising GBP/USD pair on Thursday.

Meanwhile, the U.S. dollar was also strong onboard after Nancy Pelosi said that Trump only wanted to secure his position. That is why he was forcing a smaller stimulus package ahead of elections. She added that he did not have any concern about the struggling Americans and refused to pass a half stimulus measure. These lingering tensions confusion related to U.S. stimulus measures raised uncertainty and supported the U.S. dollar. The main driver of the GBP/USD pair’s downward momentum on Thursday was E.U. leaders’ calls for the U.K. to make necessary moves to reach consensus on the Brexit deal and the rising number of restrictions in England. 

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 105.420 after placing a high of 105.491 and a low of 105.060. Overall the movement of the USD/JPY pair remained bullish throughout the day. On Thursday, the U.S. dollar appreciated across the board due to its safe-haven status after the rising concerns about tightened coronavirus restrictions. The rising number of coronavirus infections with little expectations of a fiscal stimulus deal kept the investors away from risk.

On Thursday, the U.S. Treasury Secretary Steven Mnuchin said he was open to a targeted deal with the House Speaker Nancy Pelosi. He said that Pelosi should move 300 billion dollars to needy Americans from the previous fund’s leftovers. In response, she replied that Donald Trump only wanted to seek a symbolic victory and genuinely had no intentions to help the struggling poor people. Pelosi also said that she would not go for a half stimulus measure and stick to her $2.2 trillion packages.

These tensions surrounding the U.S. stimulus package dropped the hopes that any measure will release before elections and supported the U.S. dollar. The rising U.S. dollar help provides further support to the USD/JPY pair.

The Philly Fed Manufacturing Index for October raised to 32.3 from the forecasted 14.4 and the previous 15.0 and supported the U.S. dollar. At 17:30 GMT, the Unemployment Claims from the U.S. for last week raised to 898K from the forecasted 810K and weighed on the U.S. dollar. The Empire State Manufacturing Index from the U.S. dropped to 10.5 from the expected 13.9 and weighed on the U.S. dollar. The Import Prices from September remained flat with the expectations of 0.3%. From the Japan side, the Tertiary Industry Activity for August was released at 09:30 GMT that fell short of expectations of 1.2% and came in as 0.8% and weighed on the Japanese Yen that ultimately supported the additional gains in USD/JPY pair on Thursday.

Traders ignored the rising number of unemployment claims and shifted their focus towards the rising Philly Fed Manufacturing Index and supported the USD/JPY pair’s bullish movement. The advanced index refreshed hopes that the U.S. economy could reveal greater flexibility in the final months of the year.

Furthermore, the Dallas Federal Reserve President Robert Kaplan said that minorities and women who have been affected by the job losses due to the coronavirus pandemic would need help to get back to work. Kaplan said that the economic activities were shifting more towards the less dependent sectors on face-to-face interaction due to the fears of coronavirus spread. Whereas, the Fed’s vice chair of supervision, Randal Quarles, said a need for more aid in the short-term funding market.

The rising number of coronavirus in the absence of any approved vaccine has raised fears for an economic recovery that has already been under pressure due to ongoing geopolitical tensions, the trade war between the U.S. & China, and the deep recession. These uncertainties kept the U.S. dollar supportive due to its safe-haven status and helped the USD/JPY pair post gains on Thursday.

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

USDJPY Swing Failure Buy

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Forex Market Analysis

Daily F.X. Analysis, October 15 – Top Trade Setups In Forex – ECB President Lagarde Speaks

On the news side, the economic calendar is likely to offer another round of central bankers’ speeches worldwide. BOC Gov Council Member Lane, U.S. FOMC officials, is due to speak today. Simultaneously, the main highlight of the day is likely to be ECB President Lagarde Speaks and Unemployment Claims from the U.S. economy.

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17459 after placing a high of 1.17708 and a low of 1.17197. Overall the movement of the EUR/USD pair remained flat yet slightly bullish throughout the day. The EUR/USD pair followed its previous day’s bearish trend and extended its decline in the first half of the day but started to recover losses in the second half of the day as the U.S. dollar became weak. However, the gains were also limited due to the increased uncertainty in the market related to Europe’s coronavirus situation.

The risk sentiment in the market supported the consolidated movement of the EUR/USD pair on Wednesday and turned the prices on the upside after the European Union agreed to pay more than 1 billion euros, about 1.2 billion dollars to Gilead GILD.O. The amount will be paid for a six-month supply of its antiviral drug Remdesivir shortly before the publication of the coronavirus medication’s biggest trial. This news helped EUR/USD pair to recover some losses of the day on Wednesday.

Other than that, the U.S. dollar was weak across the board on Wednesday after the Federal Reserve Vice Chairman Richard Clarida said that the U.S. economic data since May has been surprisingly strong; however, it will still take another year for output to reach back to its pre-pandemic level. 

The rising uncertainty about the economic recovery weighed on risk sentiment and dragged the EUR/USD prices on Wednesday to the downward direction.

On the data front, at 14:00 GMT, the Industrial Production from Eurozone dropped to 0.7% from the expected 0.8% and weighed on the Euro currency. At 17:30 GMT, the Core PPI & PPI data from the U.S. for September raised to 0.4% from the projected 0.2% and supported the U.S. dollar. The macroeconomic data from both sides weighed on EUR/USD pair and kept the pair under pressure on Wednesday.

On October 14, the European Central Bank President Christine Lagarde said that European countries would need to invest 290 billion euros each year to meet their commitments under the 2015 Paris climate agreement. 

The little gains in EUR/USD could also be attributed to the latest Brexit optimism that emerged after U.K. Prime Minister Boris Johnson suggested that the U.K. continue to work on Brexit deal past the October 15 deadline. This raised hopes that no-deal will be out of option soon and raised EUR/USD pair on Wednesday.

Furthermore, the downward pressure on the EUR/USD pair was due to the latest moves from Eli Lilly and Co. to halt the government-sponsored clinical trials of its coronavirus vaccine. This move after a day when Jonson & Johnson halted its vaccine’s clinical trials due to an unexpected illness found in one participant raised economic recovery concerns and weighed on the riskier EUR/USD pair.

Daily Technical Levels

Support Resistance

1.1720     1.1773

1.1694     1.1798

1.1668     1.1825

Pivot point: 1.1746

EUR/USD– Trading Tip

The EUR/USD pair traded sharply bearish to break below a solid support area of 1.1780 extended by an upward channel. On the lower side, the EUR/USD is gaining support at the 1.1732 level, and the bearish breakout of the 1.1732 level may lower the EUR/USD price further than the 1.1697 level. The MACD and RSI favor selling bias, but we may see a slight upward movement until the 1.1764 level before seeing further selling in the pair.


GBP/USD – Daily Analysis

The GBP/USD closed at 1.30113 after placing a high of 1.30642 and a low of 1.28627. Overall the movement of the GBP/USD pair remained bullish throughout the day. The currency pair GBP/USD raised on Wednesday amid the renewed hopes of a Brexit deal and the U.S. dollar weakness. On Wednesday, the U.S. dollar was weak as the U.S. Treasury Secretary Steven Mnuchin said that the U.S. stimulus package would not be delivered before November Presidential elections. The hopes for stimulus measure faded away and weighed on the U.S. dollar, ultimately helping the GBP/USD pair’s upward momentum.

Meanwhile, the upward trend in GBP/USD pair was also supported by the latest extension to the reach a Brexit deal by PM Boris Johnson. The U.K. government allowed Brexit talks to extend beyond the former deadline of October 15, announced by the PM Boris Johnson.

The extension raised renewed hopes to reach a Brexit deal and supported the local currency that favored the additional gains in GBP/USD pair.

However, the gains were limited by the rise of coronavirus cases in the United Kingdom, as it reported almost 20,000 new coronavirus cases on Wednesday. PM Boris Johnson said on the issue of coronavirus spread that the latest three-tier regional approach was productive in controlling the spread as the aim was to avoid the nationwide lockdown.

Moreover, the Brexit headlines overshadowed the coronavirus threats, and the pair kept moving in the upward direction on Wednesday. The main operator of the GBP/USD pair on Wednesday was the optimism about the Brexit deal in the market. On the flip side, the Bank of England chief Andy Haldane said that he was hopeful that Britain’s economic recovery from coronavirus’s initial impact would persist despite the risks. He said it because of the adaptability of businesses and households in the region.

He said that the consumption patterns and work practices of Britain’s had been changed since March lockdowns. This positive comment also raised the British Pound bars that helped the GBP/USD pair’s upward movement. The Core PPI for September and the PPI data rose to 0.4% from the forecasted 0.2% and capped further gains in GBP/USD pair from the U.S. side.

However, the comments from Federal Reserve member Clarida that it will take another year for economic output to reach its pre-pandemic level weighed on the U.S. dollar that helped additional gains in GBP/USD pair on Wednesday.

Daily Technical Levels

Support Resistance

1.2894     1.3098

1.2777     1.3183

1.2691     1.3301

Pivot point: 1.2980

GBP/USD– Trading Tip

The GBP/USD is trading at 1.3020 level, having supported over 1.3005 level. Above this, the next target is likely to be found around 1.3050 and 1.3070 level. At the same time, a bearish breakout of the 1.3005 support level can extend selling bias until 1.2959. The bullish bias remains strong over 1.3005. The leading indicators, such as MACD and RSI, support selling; therefore, it’s worth taking a selling trade below 1.2944 today. 

USD/JPY – Daily Analysis

The USD/JPY currency pair successfully stopped its previous day losing streak and took some fresh bids near two-week highs, around the 105.30 regions in the last hour. However, the reason for the pair’s prevalent bullish bias could be attributed to the stronger U.S. dollar. Hence, the U.S. dollar remained supportive on the back of fading hopes over additional U.S. fiscal stimulus measures and surging COVID-19 cases in the leading European countries, which keeps the market trading sentiment under pressure and increase demand for traditional safe-haven assets. Apart from this, the latest halts in the COVID-19 vaccine trials are also weighing on the market risk tone. On the contrary, the prevalent risk-off market sentiment underpinned demand for traditional safe-haven assets, including the Japanese yen, which could be considered one of the key factors that kept the lid on any additional gains currency pair. At this particular time, the USD/JPY is currently trading at 105.25 and consolidating in the range between 105.10 – 105.30.

However, the market risk sentiment extended the previous two-day slumps to 3,478, down 0.08% intraday on the day. The market trading sentiment was being pressured by the fears of no U.S. stimulus ahead of the U.S. presidential election. Moreover, the S&P 500 Futures’ losses were further bolstered by the intensifying coronavirus (COVID-19) conditions in Europe amid pauses in the (COVID-19) virus vaccine trials. In the meantime, the on-going Brexit woes and downbeat U.S. inflation also exerted downside pressure on the market trading sentiment, which underpinned the demand for traditional safe-haven assets, including the U.S. dollar and Japanese yen.

As per the latest report, the U.S. Treasury Secretary Steve Mnuchin blamed the opposition Democratic Party to stop the stimulus package from keeping President Donald Trump lagging the election polls. Across the pond, the rising COVID-19 cases in notable European countries, such as Spain, France, Germany, and the U.K., orders for strict local lockdowns in recent days. Whereas, Johnson and Johnson’s pause in vaccine trials and Eli Lily also dragged the market sentiment down.

Moreover, the market risk-off sentiment was further bolstered by the reports suggesting that no deal was signed between the European Union (E.U.) and the U.K. Furthermore, the intensifying tussle between the U.S. and China also exerted downside pressure on the market. This, in turn, underpinned the safe-haven Japanese yen, which becomes the key factor that kept the lid on any additional gains in the currency pair.

The broad-based U.S. dollar managed to keep its gains throughout the Asian session as the traders still cheering the risk-off marker mood. However, the U.S. dollar gains seem rather unaffected by the intensifying political uncertainty ahead of the upcoming U.S. presidential election on November 3. However, the incoming polls suggest a clear-cut presidential victory for the Democrat candidate Joe Biden, which might cap further upside momentum for the U.S. dollar. However, the U.S. dollar gains become the key factor that helps the currency pair to stay bid. Simultaneously, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies inched up 0.02% to 93.398 by 9:58 PM ET (1:58 AM GMT).

Looking forward, the traders will keep their eyes on the weekly U.S. Initial Jobless Claims, which is expected 825K versus 840K prior. Apart from this, the continuous drama surrounding the US-China relations and updates about the U.S. stimulus package will not lose their importance. 

Daily Technical Levels

105.05 105.70

104.82 106.12

104.40 106.36

Pivot point: 105.47

USD/JPY – Trading Tips

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

Categories
Forex Market Analysis

Daily F.X. Analysis, 14th October – Top Trade Setups In Forex – U.S. PPI Figures Ahead! 

On the news side, the focus will remain on the Core PPI and PPI figures that are likely to underperform compared with the previous month’s data, with this, the dollar may get weaker against other currencies. However, the FOMC members’ speeches will be worth monitoring to predict further market action. 

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD closed at 1.17451 after placing a high of 1.18154 and a low of 1.17301. The EUR/USD pair dropped on Tuesday amid the strength of the U.S. dollar, dampened hopes of a coronavirus vaccine, and the rising number of coronavirus cases from the Eurozone along with the rising unemployment fears in the Euro area.

Euro currency remained stressed on Tuesday due to the strength of its rival U.S. dollar across the board. The impasse over the U.S. stimulus package after the comments from U.S. House Speaker Nancy Pelosi that the newly proposed stimulus relief bill from the U.S. President was not sufficient to meet Americans’ requirements gave strength to the U.S. dollar. The strength of the U.S. dollar weighed on EUR/USD pair on Tuesday.

Meanwhile, the market’s risk appetite was declined by Johnson & Johnson’s recent decision to halt the trials of their COVID-19 vaccine. The dampened hopes of a coronavirus vaccine weighed on the riskier currency Euro and dragged the prices of the EUR/USD pair further on the downside.

Furthermore, the coronavirus pandemic situation in European nations escalated and raised fears for the Eurozone’s economic recovery. The Eurozone’s economic prospects were also down because of the increased uncertainty about the Brexit deal and the U.S. presidential elections. The rising uncertainty caused an increased demand for safe-haven greenback that ultimately added to the EUR/USD pair’s losses on Tuesday.

Moreover, at 10:59 GMT, the German Final Consumer Price Index (CPI) for September remained in-line with the expectations of -0.2%. At 14:00 GMT, the ZEW Economic Sentiment from Eurozone dropped to 52.3 against the forecasted 72.0 and the previous 73.9 in October and weighed on a single currency added further in EUR/USD pair. The German ZEW Economic Sentiment also dropped in October to 56.1 from the forecasted 74.1 and the previous 77.4 and weighed on Euro that ultimately dragged EUR/USD prices on the downside.

The rising number of coronavirus cases in European nations has forced authorities to impose restrictions, which has raised fears for unemployment. The official data suggested that U.K. unemployment started to grow even before the government imposed new restrictions to control the virus’s spread. These fears continuously weighed on the euro currency and EUR/USD pair.

From the U.S. side, the NFIB Small Business Index came in as 104.0 against the projected 100.9 and supported the U.S. dollar added in the EUR/USD pair’s losses on Tuesday. Simultaneously, the CPI and Core CPI data from the U.S. remained flat with the expectations of 0.2% and had no impact on the U.S. dollar and EUR/USD pair.

Daily Technical Levels

Support Resistance

1.1791    1.1832

1.1767    1.1851

1.1749    1.1874

Pivot point: 1.1809

EUR/USD– Trading Tip

The EUR/USD pair traded sharply bearish to break below a solid support area of 1.1780 extended by an upward channel. On the lower side, the EUR/USD is gaining support at 1.1732 level, and the bearish breakout of 1.1732 level may lower the EUR/USD price further than the 1.1697 level. The MACD and RSI favor selling bias, but we may see a slight upward movement until the 1.1764 level before seeing further selling in the pair.


GBP/USD – Daily Analysis

The GBP/USD pair was close at 1.29340 after placing a high of 1.30678 and a low of 1.29216. The British Pound fell sharply on Tuesday amid the rising concerns about the no-deal Brexit and fears over a looming lockdown hurt sentiment.

The chances that the U.K. will leave the E.U. without a trade deal increased after the French government appeared reluctant to give in to U.K. demands over its fisheries’ control. The French foreign minister Jean-Yves Le Drian said that the possibility of the U.K. leaving the E.U. without a trade deal was a credible hypothesis.

The French government has already said that it will not accept any bad deal in fisheries, and this has raised the uncertainty over the deal just ahead of October 15-16 European summit. The E.U. Brexit negotiator Michel Barnier will provide updates on Brexit negotiations at the E.U. summit. Barnier will elaborate on the E.U. summit’s situation on the Brexit’s key sticking points with the details about priorities and the red lines. 

The British Pound remained under pressure as the concerns were raised after the French government’s warning about the no-deal Brexit. This weighed ultimately on the GBP/USD prices. Furthermore, the rising number of coronavirus in the United Kingdom forced the local government to impose further restrictions to control the virus’s spread. PM Boris Johnson said that the rising number of cases in the U.K. was flashing at them like dashboard warnings in a passenger jet. 

Boris Johnson unveiled a new three-tier system that categories areas based on the medium, high, and very high alert levels due to an uptick in coronavirus cases across the country. The U.K. government’s rising restrictions to control the spread of the virus raised fears of economic recovery that weighed on the local currency, which added further losses in the GBP/USD pair.

On the data front, at 04:01 GMT, the BRC Retail Sales Monitor for the year from Britain rose in September to 6.1% from the expected 3.5% and the previous 4.7% and supported British Pound and caped further losses in GBP/USD pair. AT 11:00 GMT, the Claimant Count Change in September dropped to 28.1K against the forecasted 78.8K and the previous 39.5K and supported British Pound. In September, the Unemployment Rate rose to 4.5% from the forecasted 4.3% and weighed on British Pound and added the GBP/USD pair’s additional losses.

At 11:02 GMT, Britain’s Average Earnings Index came in as 0.0% for the quarter against the expected -0.6% and supported GBP. On the other hand, the NFIB Small Business Index was released from the United States at 15:30 GMT and raised to 104.0 from the anticipated 100.9 and supported the U.S. dollar that dragged the GBP/USD pair even downward.

Daily Technical Levels

Support Resistance

1.3018    1.3098

1.2971    1.3131

1.1938    1.3177

Pivot point: 1.3051

GBP/USD– Trading Tip

The GBP/USD is trading at 1.2894 level, holding right below an immediate resistance level of 1.2944. The resistance is extended by an intraday horizontal level on the two-hourly timeframes. Below the 1.2944 resistance level, the Sterling can trigger selling until the 1.2894 level and 1.2845 level. On the flip side, a bullish breakout of 1.2944 levels can trigger buying until the 1.2994 level. The leading indicators, such as MACD and RSI, support selling; therefore, it’s worth taking a selling trade below 1.2944 today. 


USD/JPY – Daily Analysis

The USD/JPY closed at 105.475 after placing a high of 105.625 and a low of 105.234. The risk aversion market sentiment kept the USD/JPY pair on the high on Tuesday. The impasse supported the market sentiment over the U.S. stimulus package, the pandemic spread worldwide, and the pause of vaccine trials by Johnson & Jonson along with the Australian and Chinese recent clash.

The latest talks between Republicans & democrats for a fresh round of stimulus measures also failed to provide meaningful results and weighed on market sentiment. The U.S. House Speaker Nancy Pelosi downplayed the hopes for another round of stimulus package further after saying that the newly proposed package by US Trump was insufficient to meet the United States’ needs.

These dampened hopes over the next round of coronavirus relief bill raised risk aversion market sentiment and supported the U.S. dollar due to its safe-haven status and supported USD/JPY pair. Furthermore, the risk-off market bias was underpinned by the rising number of coronavirus cases across the globe and the governments’ restrictive measures to curb coronavirus’s effect on the economy. The economic recovery concerns raised even further after the IMF report that revealed that business and other economic activities were highly disturbed by the coronavirus pandemic-induced lockdowns. 

However, the IMF projection for the global recession somewhat improved on Tuesday to 4.4% than the previous projection of 5.2% in summer. This projection helped improve the risk sentiment and weighed on the safe-haven Japanese yen that added further gains in the USD/JPY pair.

The U.S. Dollar Index was up by 0.5% on Tuesday after the risk sentiment suffered due to the pause of vaccine trials by Johnson & Johnson. The company paused its trials after an unexpected illness was found in one of the participants. This pause increased the uncertainty over the economic recovery and supported the safe-haven greenback that pushed the USD/JPY pair.

On the data front, at 04:50 GMT, the M2 Money Stock for the year from Japan dropped to 9.0% from the expected 9.1% and weighed on the Japanese Yen that added strength to the USD/JPY pair on Tuesday. At 15:00 GMT, the NFIB Small Business Index for September advanced to 104.0 against the expected 100.9 and previous 100.2 and supported the U.S. dollar that lifted the USD/JPY pair. At 17:30 GMT, the CPI and the Core CPI data from September remained flat with the anticipated 0.2% and had a null-effect on the U.S. dollar.

Furthermore, China reportedly banned imports of Australian coal and left Australian vessels stuck at Chinese ports. These tensions between China and Australia increased concerns and raised uncertainty that helped improve the safe-haven Japanese yen and capped further gains in the USD/JPY pair on Tuesday.

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 105.250 level today. Good luck!  

Categories
Forex Market Analysis

Daily F.X. Analysis, 13th October – Top Trade Setups In Forex – U.S. Inflation in Highlights! 

Investor’s eyes will stay on the Final CPI and Final core CPI due to the U.S. Economy. The analysts are forecasting no significant changes in the inflation rate; thus, it may go muted. However, the Claimant Count Change and Unemployment Rate data from the U.K. is likely to drive market movements. Let’s keep an eye on U.K. labor market figures and U.S. CPI m/m later today.

Economic Events to Watch Today  

  

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.18109 after placing a high of 1.18265 and a low of 1.17865. Overall the movement of the EUR/USD pair remained flat throughout the day. The EUR/USD pair was flat on Monday, as the European Central Bank members reportedly downplayed expectations that it would adopt the Federal Reserve’s average inflation targeting measure, cooling bets on central banks allowing inflation to run above target.

Several ECB policymakers appeared reluctant to follow the Fed with an average inflation target on concerns it could lead to unrealistic expectations about future policy decisions. The European Central Bank has targeted an inflation policy of below but close to 2% for years. If ECB adopts average inflation targeting like Fed, this move will see the ECB allow inflation to run above its 2% target for some time to make up for periods of sluggish price increases. 

Recently, Eurozone inflation has remained short of the bank’s target. Following U.S. Federal Reserve on inflation targeting measure could allow inflation to rise above 2% and makeup periods of lagging price pressures.

Meanwhile, the signs that the second wave of coronavirus has started to weigh on growth have attracted the central bank’s attention and caused a sluggish move in the single currency Euro. On the data front, at 10:59 GMT, the German Wholesale Price Index dropped to 0.0% from the forecasted 0.2% and weighed on single currency Euro that ultimately weighed on EUR/USD pair.

On the U.S. front, the U.S. dollar remained strong onboard on Monday amid the rising hopes that a small coronavirus relief bill will be passed before elections as the talks over the massive stimulus bill stalled on the day. The new proposed bill by Trump of 1.8 trillion dollars faced rejection from both Republicans and Democrats. Republicans were reluctant to add more to the government debt pile, and Democrats wanted their 2.2 trillion packages.

After this, Trump Administration called on Congress for a small stimulus package to be funded from leftover funds and used for hardly-hit sectors like airline and small businesses. The hopes that a small package will be delivered before elections gave strength to the U.S. dollar that added pressure on EUR/USD, and the pair remained flat throughout the day.

Daily Technical Levels

Support Resistance

1.1791 1.1832

1.1767 1.1851

1.1749 1.1874

Pivot point: 1.1809

EUR/USD– Trading Tip

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

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.30644 after placing a high of 1.30824 and a low of 1.30052. Overall the movement of the GBP/USD pair remained bullish throughout the day. The GBP/USD pair remained positive on Monday despite broad-based U.S. dollar strength. The pair traded at its four-week highest level, but the prospect remained depressed as the local country’s coronavirus situation escalated and forced to impose new restrictive measures.

The U.S. dollar was high on board after the talks for massive stimulus measures stalled again, and the Chinese yuan depreciated. The strong U.S. dollar helped cap further gains in GBP/USD pair on Monday. The latest move also weighed the gains in the GBP/USD pair from the Bank of England, who asked commercial banks earlier today about their readiness to cope with negative interest rates. On Monday, the Bank of England wrote banks to ask them how ready they were to cope with adopting negative interest rates.

This move from BoE raised concerns that it was considering cutting interest rates further to cope with the rising coronavirus cases in the U.K. The rising speculations over further rate cuts from BoE in the coming months weighed on British Pound and limited the additional gains in GBP/USD pair.

Meanwhile, the Governor of Bank of England, Andrew Bailey, said on Monday that the central bank thought Britain’s economy could struggle more than it has forecasted to recover from the coronavirus pandemic crisis. Bailey said that risk was, unfortunately, all on the downside, which added further pressure on British Pound.

Moreover, British Prime Minister Boris Johnson implemented a three-tiered system of restrictions with the closure of pubs in certain parts of England as the country was trying to deal with the rising number of coronavirus cases. These restrictive measures also exerted downside pressure on GBP/USD pair on Monday.

Furthermore, on the U.S. front, the U.S. dollar remained strong across the board after the Chinese yuan was depreciated. The Chinese city gave away 10M yuan in a lottery trial of digital currency. The latest digital currency trial was aimed at stimulating consumer spending to aid China’s economic recovery from the coronavirus pandemic.

Other than that, the U.S. dollar was also strong as the talks for a massive stimulus bill stalled again when Republicans and Democrats disagreed with passing the newly proposed bill by Trump of worth $1.8 trillion. After this, Trump Administration called on Congress to small stimulus aid for airline and small businesses. The strong U.S. dollar also kept the GBP/USD pair’s gain limited on Monday.

On the Brexit deal front, the concerns rose that negotiations could collapse as the differences between E.U. & U.K. demands were only rising. The deadline to reach a deal is just three days far, and no progress has been reported as of yet that has raised the risk sentiment in the market. The improved risk sentiment kept the GBP/USD pair higher on board.

Daily Technical Levels

Support Resistance

1.3018 1.3098

1.2971 1.3131

1.1938 1.3177

Pivot point: 1.3051

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 105.317 after placing a high of 105.817 and a low of 105.240. Overall the movement of the USD/JPY pair remained bearish throughout the day. The USD/JPY pair failed to cheer the Chinese Yuan depreciation and U.S. dollar strength on Monday and continued decline over the fresh hopes that the U.S. stimulus aid package will be delivered before the elections.

The people’s Bank of China removed a 20% reserve requirement ratio for yuan forward settlements that undermined the cost of shorting yuan and weighed on the Chinese currency. But investors failed to take advantage of this depreciation in yuan, and the pair USD/JPY remained depressed in the market.

The rising number of coronavirus cases worldwide and the increased restrictions to curb the coronavirus pandemic’s effect raised the safe-haven appeal and supported the Japanese Yen that weighed on the USD/JPY pair. Meanwhile, the absence of key macroeconomic events due to the U.S. and Canada celebrating Columbus Day and Thanksgiving respectively exerted more pressure on the USD/JPY pair.

On the Japan front, the Bank Lending for the year was released at 04:50 GMT that remained flat at 6.4%. The Core Machinery Orders raised to 0.2% from the forecasted -1.0% and supported the Japanese Yen that weighed on the USD/JPY pair. Whereas, the PPI for the year from Japan decreased to -0.8% against the forecasted -0.5%. At 10:58 GMT, the Prelim Machine Tool Orders for the year remained flat at -15.0%.

Furthermore, the newly proposed U.S. stimulus measure of $1.8 trillion by Trump also faced rejection from both parties. In response to this, the Trump administration asked Congress to provide Americans with a small relief fund specifically for airlines and small businesses before elections.

The hopes that a small package could be passed before elections and a massive stimulus package after elections weighed on the U.S. dollar and added further losses in the USD/JPY pair on Monday.

Moreover, the White House physician Sean Conley said that U.S. President Donald Trump was free of transmission risk to others on Saturday. On Sunday, Trump claimed that he was now immune from the coronavirus, but the chances to get infected remained again. Trump was tested positive for coronavirus on first October, and he has been getting medical assistance since then. The news that Trump was getting better and has no transmission risk raised risk sentiment and capped further losses in the USD/JPY pair by weighing on safe-haven Japanese yen.

Daily Technical Levels

105.05 105.70

104.82 106.12

104.40 106.36

Pivot point: 105.47

USD/JPY – Trading Tips

On Tuesday, the USD/JPY traded sharply bearish to drop from 105.900 level to the 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 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 Market Analysis

Daily F.X. Analysis, 09th October – Top Trade Setups In Forex – U.K. GDP in Highlights 

On the news front, the eyes will remain on the series of economic events from the U.K., especially the GDP m/m, Goods Trade Balance, and Industrial Production m/m. The sterling may suffer today as the GDP and Construction Output are forecasted to be worse than before. Besides, the Canadian economy will also remain in highlights for the release of Employment Change and Unemployment Rate as both of these are expected to report negative data.

Economic Events to Watch Today  


 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17599 after placing a high of 1.17815 and a low of 1.17325. Overall the movement of the EUR/USD pair remained flat throughout the day. The EUR/USD pair remained flat on Thursday as it closed its day on the same level it was started with. The earlier decline in the EUR/USD pair was due to the rising concerns mentioned in monetary policy accounts. At the same time, the surge in the EUR/USD pair was caused by the latest comments from President Trump about the U.S. stimulus deal.

The ECB issued its September’s monetary policy meeting minutes on Thursday that suggested that ECB could roll out more stimulus later this year as the Bank was more concerned about the pandemic hit economy than analysts had previously thought. 

The minutes revealed that ECB was more concerned about the inflation trajectory and Euro than market participants anticipated. The Euro struggled to find demand after the release of minutes that suggested that further stimulus was not too distant in the future amid an uncertain economic outlook. The ECB officials’ tone in the September meeting minutes was in contrast to the ECB President Christine Lagarde’s speech that showed no concerns about the rising Euro and was optimistic about the Eurozone economy.

Lagarde had said that the strong rebound in activity was broadly in line with previous projections. Whereas, the ECB accounts showed that members preferred the Bank to remain flexible on policy and have concerns about the pace of inflation.

Furthermore, the Vice President of the European Central Bank, Luis de Guindos, said that ECB has to use its tools at its disposal as the coronavirus pandemic depresses inflation expectations. These concerns weighed on single currency euro and dragged the prices of the EUR/USD pair in the early trading session. Whereas, in the late trading session, the U.S. President Donald Trump said that he favored a mini-accord focused on airlines and checks to all Americans. After terminating talks with Democrats for further stimulus, these comments raised hopes that some packages will be announced soon. This weighed on the U.S. dollar and raised the EUR/USD pair in the late trading session and closed the day at the opening level that provided flat movement in the pair.

On the data front, at 10:59 GMT, the German Trade Balance for August dropped to 15.7B from the projected 17.1B and weighed on single currency Euro. Whereas from the U.S. side, the Unemployment claims during last week rose to 840K against the expected 820K and weighed on the U.S. dollar that added strength to 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

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


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29340 after placing a high of 1.29702 and a low of 1.28913. Overall the movement of the GBP/USD pair remained bullish throughout the day. The Governor of the Bank of England’s positive comments and Trump’s support for the U.S. stimulus package pushed GBP/USD pair higher on grounds on Thursday. GBP/USD pair raised and extended its previous day’s gains despite rising concerns over the coronavirus situation in the U.K. and Brexit deal.

On Thursday, the Bank of England Governor Andrew Bailey said that the Bank was not out of power to handle the downside risks faced by the economy as the country focus was shifted to the second wave of the coronavirus crisis. Bailey said that economic recovery has been very uneven, with different sectors gaining more than others. He also said that there was an unprecedented level of uncertainty at the moment, and the risk was very much on the downside, but the Bank was not out of ammunition to fight the crisis yet. 

He added that the Bank has many policy tools that could be used promptly in response to the second wave and third wave if needed. 

Britain experienced a record decline in economic output in the second quarter of this year by a GDP contraction of 19.8%, the biggest drop since the record began in 1955. Bailey said that the country was still in a very big recession, with the economic recovery from the pandemic height very uneven. These comments from Bailey raised British Pound and helped GBP/USD pair to post gains.

The upward trend of the GBP/USD pair was further supported by the latest Trump’s call for a small stimulus package from the U.S. Congress for airline and small businesses. The change of view by Trump over stimulus measure within a day weighed on the U.S. dollar and supported the upward movement of the GBP/USD pair.

 Furthermore, the U.S. dollar was also weighed by the last week’s Unemployment Claims that rose to 840K from the projected 820K last week. The weak U.S. dollar pushed GBP/USD further on the upside on Thursday and extended its gains.

Whereas, the coronavirus cases in the north of England were getting out of control and were under a serious situation. The minister defended the government plans to introduce new restrictions that would include a ban on overnight stays and closing the pubs and restaurants in the worst-affected areas. These potential restrictions to control the coronavirus situation in the U.K. weighed on GBP and capped further gains in GBP/USD pair on Thursday.

On the data front, at 04:01 GMT, the RICS House Price Balance raised to 61% from the expected 39% and supported British Pound that added strength to GBP/USD pair. On the Brexit front, the hopes for a Brexit deal were fading in the market and weighing on British Pound with Boris Johnson giving threats to walk away from talks if the deal was not reached by 15th October. At the same time, E.U. officials have dared Johnson to walk away if he views a deal as impossible. 

According to Bloomberg, the E.U. officials are working on a plan that will find a way to carry on discussions into the second half of October despite some differences remaining on both sides. The uncertain Brexit developments have weighed on British Pound and limited the additional gains in GBP/USD on Thursday.

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 1.2960 level, holding right below an immediate resistance level of 1.2960. The resistance is extended by a double top resistance level on the hourly timeframe. Below the 1.2960 resistance level, the Sterling can trigger selling until the 1.2920 level and 1.2900 level. On the higher side, a bullish breakout of 1.2960 levels can trigger buying until the 1.3000 level. The fundamental side is busy today, and the U.K. economy is due to release series of economic events, with a special focus on the U.K. GDP data. A positive date is likely to drive a bullish breakout until 1.3000. At the same time, the negative GDP figures may lead the GBP/USD price towards 1.29350. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 106.026 after placing a high of 106.106 and a low of 105.923. Overall the movement of the USD/JPY pair remained bullish throughout the day. The pair USD/JPY consolidated in a range of around 106 marks on Thursday amid mixed statements from President Trump, House Speaker Pelosi, and Treasury Secretary Mnuchin related to U.S. stimulus measure. 

Earlier this week, President Trump halted further negotiations with Democrats for a stimulus measure package and said he would provide a massive stimulus measure to win the election. However, the next day, Trump backed from his statement amid the need for financial support to airlines and small businesses that had been hit hardest by the pandemic crisis. 

Trump called for a small stimulus aid for airlines, which weighed on the U.S. dollar that was moving higher due to his previous comments. U.S. stocks, however, rallied after the new call for a small package by President Trump. These statements helped the USD/JPY pair to post gains due to improved risk sentiment in the market on Thursday.

On the other hand, the House Speaker Nancy Pelosi said that a mini-accord was not possible without passing a big stimulus in response to calls for a small aid package. These contrasting statements from both sides frustrated the traders and increased concerns in the market. After Pelosi’s comments, the rally in equities that started earlier suffered and was reversed on Thursday.

On the data front, at 04:50 GMT, the Current Account Balance from Japan raised in August to 1.65T against the forecasted 1.50T and supported the Japanese Yen. At 10:02 GMT, the Economy Watchers Sentiment increased to 49.3 from the projected 45.0 and supported the Japanese Yen.

From the U.S. side, the Consumer Credit for August was released at 00:00 GMT, which dropped to -7.2B against the forecasted 14.9B and weighed on the U.S. dollar. At 17:30 GMT, the Unemployment Claims from last week raised to 840K from the anticipated 820Kand weighed on the U.S. dollar.

Despite Japan’s positive data and negative data from the United States, the currency pair USD/JPY managed to remain bullish throughout the day on Thursday. Meanwhile, the risk sentiment was also improved by the latest news that the United States has enough coronavirus vaccine for every American by March. The Health and Human Services (HHS) Secretary Alex Azar said that Americans could use vaccines by March to be available for every one of them. This improved risk sentiment weighed on the safe-haven Japanese Yen and supported the USD/JPY pair on Thursday.

Daily Technical Levels

Support Resistance

105.66    106.18

105.36    106.42

105.13    106.71

Pivot point: 105.89

USD/JPY – Trading Tips

The USD/JPY pair has violated the ascending triangle pattern at 105.800 level, and now the same level is working as a support for the safe-haven pair. On the higher side, the USD/JPY pair can continue its bullish bias until the 106.270 level. However, we can expect USD/JPY to retrace back until the support level of 105.800 level before showing us a bullish trend. Let us wait to buy over 105.800, but the next support will prevail at the 105.450 level. Let’s consider staying bullish over the 105.800 level today, and selling should also be considered only below this level today. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, 08th October – Top Trade Setups In Forex – ECB Monetary Policy Meeting! 

On the news side, the economic calendar is likely to offer another round of central bankers’ speeches worldwide. BOC Gov Macklem, BOE Gov Bailey, and SNB Chairman Jordan are due to speak today. Simultaneously, the day’s main highlight is likely to be ECB Monetary Policy Meeting Accounts and Unemployment Claims from the U.S. economy.

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17637 after placing a high of 1.17816 and a low of 1.17248. On Wednesday, the EUR/USD pair recovered most of its previous day’s losses after the U.S. dollar became weak on the back of U.S. President Trump’s support to multiple aid measures. This raised the risk-on market sentiment and helped the EUR/USD pair to gain traction in the market.

On Tuesday, the U.S. president called off negotiations with Democrats over the next round of stimulus measure and spurred the risk-off market sentiment that weighed on currency pair. Just a day after this announcement, Trump flipped and changed his statement and called for checks to all Americans, especially Airlines and payroll protection. 

On the data front, the German Industrial Production for August dropped to -0.2% against the forecasted 1.5% and weighed on Euro. At 11:45 GMT, the French Trade Balance dropped to -7.7B against the projected -6.5B and weighed on single currency Euro. At 13:00 GMT, the Italian Retail Sales for August increased to 8.2% from the projected 3.8% and raised the EUR/USD pair.

Meanwhile, the European Central Bank’s President Christine Lagarde said that ECB would not remove monetary support until the coronavirus crisis remains. She reinforced that the central Bank and fiscal authorities must work together. Lagarde said that ECB should guard against premature withdrawal of stimulus and stated that the risk of more divergence in the euro area would remain even after the coronavirus crisis. Lagarde’s comments did not have any major impact on the EUR/USD currency pair as she did not provide any new information.

Whereas, on the U.S. front, the FOMC published its September meeting minutes on Wednesday. Minutes revealed that economic data was recovering faster than expected from the Q2 decline. The outlook for the Eurozone economy assumed additional fiscal support, and Fed lawmakers urged U.S. Congress to deliver the next round of aid packages. However, the Federal Reserve September meeting minutes also had no major impact on the EUR/USD pairs.

Moreover, as the U.S. President Donald Trump has repeatedly pushed for approving a vaccine before elections, the U.S. Food and Drug Administration (FDA) said that a coronavirus vaccine would not be approved by Election Day. This news raised the risk sentiment in the market and appreciated the EUR/USD pair.

Daily Technical Levels

Support Resistance

1.1729    1.1788

1.1697    1.1815

1.1670    1.1846

Pivot point: 1.1756

EUR/USD– Trading Tip

On Thursday, the EUR/USD is trading with a slight bullish bias around 1.1740 level, holding within an upward channel providing support at 1.1759 level and resistance at 1.1800. Bullish trend continuation may lead the EUR/USD exchange rate towards 1.1840 mark, and continuation of upward movement may lead the pair towards 1.1865. While on the lower side, support stays at 1.1760 and 1.1725 level today. The ECB Monetary Policy Meeting Accounts will be in highlights to determine the next movement in the market.  


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29181 after placing a high of 1.29294 and a low of 1.28449. The GBP/USD pair followed its previous day bearish trend dropped further in the earlier trading session; however, the pair managed to reverse its direction in the late session and posted gains for the day. The improving risk sentiment in the market helped GBP/USD pair to move upward on Wednesday.

The U.S. President Donald Trump flipped from its Tuesday’s statement that negotiations between Republicans and Democrats will not proceed until after the election. On Wednesday, Trump backed from it and called for additional support to Americans, especially Airline workers. This turn back from Trump was not expected and supported the risk sentiment that ultimately added strength to the GBP/USD pair.

Meanwhile, the statement by Michael Gove gave new optimism about the Brexit deal and supported British Pound. The Chancellor of Lancaster’s duchy said that there were 66% chances that a Brexit deal would be reached amid fresh optimism over a breakthrough on one stocking point of state aid. 

It seems like just like state aid, other sticking points will break, and the Brexit deal will be reached before the end of this year. This optimism lifted British Pound in the market against its rivals and pushed GBP/USD pair on the upside. However, some concerning news also circulated about the European Union being hard on fisheries issues in the market. E.U. had hardened its stance over the fisheries issue and said that Britain should be forced to hand over the same amount of fish as it used to do when it was an E.U. member. The rising concerns over fisheries sticking point limited the British Pound gains on Wednesday.

On the data front, at 12:32 GMT, the Halifax HPI from the United Kingdom for September rose to 1.6% from the projected 1.5% and supported British Pound. At 13:30 GMT, the Housing Price Index for the year in August dropped to 2.3% from the forecasted 3.4% and weighed on British Pound.

From the U.S. side, the Federal Reserve issued its meeting minutes from September, which showed that lawmakers were urging U.S. Congress to deliver the next round of stimulus package, and they were stressing the need for it. 

The economic data was recovering much better than expected in Q2, but the fiscal government still needed support. Minutes failed to impress the U.S. dollar, and the pair GBP/USD continued to move higher.

British Pound investors will closely look forward to the speech of Governor of Bank of England Andrew Bailey to find fresh clues about the U.K. economic condition. On the data front, the Unemployment Claims form the U.S. will also greatly impact the GBP/USD pair’s prices on Thursday.

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 1.2930 level, heading north to complete Fibonacci retracement, especially after breaking the bullish channel at 1.2930. For the moment, the same level is anticipated to produce resistance to the GBP/USD pair. We may notice a bullish movement in Sterling, particularly in the wake of bullish correction unto 1.2930. Failure to violate this mark or closing candles beneath the 1.2930 mark is anticipated to drive selling bias unto the 1.2865 level. The MACD and RSI support bullish bias. However, the recent smaller histograms of MACD advise neutral bias among traders. Let’s consider taking buy over 1.2956 or selling below the same.


USD/JPY – Daily Analysis

The USD/JPY closed at 105.962 after placing a high of 106.105 and a low of 105.593. The USD/JPY pair rose to its highest level since 14th September on Wednesday on the back of improved risk sentiment and U.S. dollar strength. Trump’s latest flip from his own words gave a push to risk sentiment in the market and supported the USD/JPY pair’s an upward trend on Wednesday.

The Federal Reserve issued minutes from its recent meeting, which showed that officials were worried about what would happen if financial aid decreased or disappeared. Furthermore, on Wednesday, the Minneapolis Federal Reserve President Neel Kashkari said that the U.S. economy would face enormous consequences if the next round of stimulus packages were not approved soon. He stated that there were no moral hazards in issuing more aid, and further delay would cause a much worse downturn. 

Kashkari added that unlike the 2008 financial crisis, the 2020 pandemic crisis was not born of financial system weakness, so financial aid must be approved to support airlines and other industries that were facing big damages. The comments from Kashkari raised concerns and helped improve risk sentiment that supported the USD/JPY pair’s bullish stance on the day.

Meanwhile, the Bank of Japan’s Governor Haruhiko Kuroda said that Japan’s economy was difficult, but it has started to pick up. He said that the impact of COVID-19 would be watched carefully to take additional steps in monetary easing. He added that Bank would not hesitate to further assess in time of need. Kuroda said that the Consumer Prices in Japan are likely to fall for the time being and will start to increase as the economy will improve. The comments from Kuroda also failed to provide any meaningful impact on the USD/JPY pair prices.

On the data front, the Leading Indicators from Japan were released at 10:00 GMT that came in line with 88.8% expectations. Furthermore, the U.S. President Donald Trump said that Republicans would not proceed with the negotiations on the U.S. Stimulus package with Democrats as they were proposing a $2.4 trillion package and Republicans were ready for only a $1.6 trillion packages. However, on Wednesday, Trump backed from his statement and asked for more aid from U.S. Congress for Americans, especially for airline workers and small businesses.

 

The flip of Trump raised risk sentiment in the market and weighed on the safe-haven Japanese Yen that lifted the USD/JPY pair. Moreover, the risk-sentiment was further bolstered by the news that the US FDA has said that the developed vaccine’s availability will be delayed until after the U.S. presidential elections on 03rd November. It also affected the Japanese Yen due to its safe-haven status and supported the USD/JPY pair is an upward trend.

Daily Technical Levels

Support Resistance

105.66    106.18

105.36    106.42

105.13    106.71

Pivot point: 105.89

USD/JPY – Trading Tips

The USD/JPY pair has violated the ascending triangle pattern at 105.800 level, and now the same level is working as a support for the safe-haven pair. On the higher side, the USD/JPY pair can continue its bullish bias until the 106.270 level. However, we can expect USD/JPY to retrace back until the support level of 105.800 level before showing us a bullish trend. Let us wait to buy over 105.800, but if the pair breaks below this level, the next support will prevail at the 105.450 level. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, October 07 – Top Trade Setups In Forex – FOMC Meeting Minutes Ahead! 

It’s going to be another busy day from the news front as the ECB and Fed officials are due to speak during the U.S. and European session today. The ECB President Lagarde is expected to speak at the Paris Europlace online International Financial Forum. Simultaneously, FOMC Member Kashkari is scheduled to discuss racism and the economy at a virtual event series. However, the investor’s focus will also stay on the FOMC Meeting Minutes from the U.S. In can be a big market mover during the mid-U.S. session.

Economic Events to Watch Today  


EUR/USD – Daily Analysis

The EUR/USD closed at 1.17824 after placing a high of 1.17973 and a low of 1.17047. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD pair rose to its nine-day highest level amid the broad-based U.S. dollar weakness and the strong positive macro-economic data from the European side.

The U.S. dollar was lower after the news about U.S. President Donald Trump’s health came into the market. Another factor helping the risk sentiment was the hopes that U.S. stimulus measures will now be delivered soon as Trump’s infection has brought the virus to Capitol Hill. Both Democrats and Republicans will now realize the urgency of responding to the virus impact and reach a consensus over the aid bill’s size. The renewed stimulus hoped also added strength to the risk sentiment and helped the EUR/USD pair to gain further.

At 13:00 GMT, the Final Services PMI for the whole Eurozone also rose to 48.0 from the anticipated 47.6 and supported the Euro currency. At 13:30 GMT, the Sentix Investor Confidence came in as -8.3 against the forecasted -9.2 and supported Euro. At 14:00 GMT, the Retail Sales from Europe rose to 4.4% from the expected 2.4% and supported Euro.

The Retail Sales in August from Eurozone raised nearly double than expectations to 4.4% and supported the local currency against its rival U.S. dollar and pushed the EUR/USD pair higher.

The Services PMI from all over European nations also rose and showed that the service industry improved from their previous levels and helped Euro to post gains. Furthermore, the Eurogroup meeting and the Financial Affairs Council meeting will start on 5-6th October. The Eurogroup will discuss its priorities under its new presidency and adopt a work program. The Eurozone’s policy priorities in the context of economic recovery and the draft budgets for 2021 will be discussed. Traders will look forward to meeting results for finding fresh clues about the EUR/USD pair in the coming days.

Daily Technical Levels

Support Resistance

1.1726     1.1817

1.1670     1.1854

1.1634     1.1909

Pivot point: 1.1762

EUR/USD– Trading Tip

The EUR/USD is trading at 1.1740 level, having reviolated the upward channel at 1.1750 level, mostly traded in line with our forecast to test the resistance level of 1.1801 level. On Tuesday, the EUR/USD is trading below a resistance level of 1.1801 level. Below this mark, the EUR/USD can plunge until the support resistance level of 1.1760 and 1.1740. In contrast, an upward breakout of 1.1801 can lead the EUR/USD pair towards 1.1840 areas. 


GBP/USD – Daily Analysis

The GBP/USD closed at 1.29726 after placing a high of 1.29920 and a low of 1.28995. Overall the movement of the GBP/USD pair remained bullish throughout the day. The GBP/USD pair extended its previous daily gains and reached its 11-day highest level above 1.299 level amid the broad-based U.S. dollar weakness and renewed Brexit deal hopes along with the improving risk sentiment around the market.

The British Pound to U.S. dollar exchange rate moved higher on rising expectations that the U.K. and E.U. will reach a consensus on the post-Brexit trade deal. The Goldman Sachs forecasted that both parties would reach a deal by early November.

Another factor involved in the Brexit deal’s raised hopes was the report that suggested that E.U. chief negotiator Michel Barnier aimed to hold talks with European coastal states to get the freedom to negotiate terms with the U.K. on the fisheries issue. It is one of the sticking points that have caused a delay in the Brexit deal progress. The Brexit hopes were further bolstered after Prime Minister Boris Johnson and European Commission president Ursula von der Leyen agreed that talks should be intensified to close the significant gap that has stalled the negotiations’ progress. 

All these above optimistic reports helped the local currency and pushed the GBP/USD pair on the above side. The bullish calls were supported by Goldman Sachs that urges investors to buy Sterling. However, the Goldman Sachs Bank did not completely take the prospect of no-deal Brexit out off the table and said that No-Deal Brexit’s perceived probability would remain intact beyond the next European Council meeting in mid-October.

If no deal is reached between the E.U. and U.K., Britain will leave the E.U. without a deal at the end of the transition period on December 31.

Meanwhile, on the data front, at 13:30 GMT, the Final Services PMI from Great Britain for September rose to 56.1 against the 55.1 and supported GBP. The stronger than expected Services PMI showed an expansion in the U.K. services activities and supported the already rising GBP/USD pair.

However, the U.S. dollar was weaker due to the rising risk sentiment on the reports of the quick recovery of the U.S. President Donald Trump from coronavirus infection. The stronger U.S. dollar onboard, along with the improved risk sentiment, also helped the GBP/USD pair’s plunge.

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

On Wednesday, the GBP/USD is trading at 1.2890 level after violating the upward channel at 1.2930. For the moment, the same level is expected to provide resistance to the Cable pair. We may see a slight upward movement in Sterling, especially in the wake of bullish correction until 1.2930. Failure to break this level or closing candles below the 1.2930 level is likely to drive selling bias until the 1.2865 level. The MACD and RSI are supporting selling bias, but the recent smaller histograms of MACD suggest sellers are exhausted, and we may see a slight upward correction in the market today. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.735 and a high of 105.792 and a low of 105.228. Overall the movement of the USD/JPY pair remained bullish throughout the day. After posting hefty losses on Friday, USD/JPY reversed its direction and moved higher amid the improved risk sentiment and rising optimism in the market. 

The market’s mood was improved after a bumpy weekend related to the concerning news about the health of U.S. President Donald Trump. The Leader of the world’s largest economy was tested positive for coronavirus on Friday and was shifted to a military medical facility for treatment. The Contradictory headlines about his health and its effects on upcoming Presidential elections were raising concerns throughout the weekend. 

This news canceled the above fears and raised optimism around the market, boosting risk sentiment. The U.S. equities and the U.S. Treasury yields raised on the day, giving a boost to the U.S. dollar. Simultaneously, the rising risk sentiment weighed on the safe-haven Japanese Yen and pushed the USD/JPY pair.

On the data front, at 18:45 GMT, the Final Services PMI in September from the United States remained flat with the forecasts of 54.6. While at 19:00 GMT, the highlighted ISM Services PMI from the United States rose to 57.8 against the forecasted 56.3 and supported the U.S. dollar.

The ISM Services PMI showed an expansion in U.S. services activities in September and raised hopes for the quick economic recovery that helped improve the market’s risk sentiment and weighed on the Japanese Yen due to its safe-haven nature and ultimately pushed the USD/JPY pair even higher.

Moreover, the risk sentiment was also supported by the better than expected Retail Sales report from the European Union that doubled the expected number and supported riskier assets. The European stocks raised after this report, and U.S. stocks followed them that raised the market’s risk sentiment and helped the riskier GBP/USD pair gain further in the market.

Meanwhile, the USD/JPY pair’s gains remain limited by the rising fears of a second wave of coronavirus globally in the winter season. From all across the globe, the reports were suggesting a rising number of coronavirus cases. Europe struggled hard to fight against the pandemic and contained the spread as France, and the U.K. saw a continuous rise in daily count on infection cases. 

Meanwhile, other countries like Oman, Israel, India, France, Canada, UK, and Japan also reported a rise in infected people. This raised global concerns, supported the safe-haven appeal, and capped further gains in the USD/JPY pair.

Daily Technical Levels

Support Resistance

105.39     105.91

105.08     106.12

104.88     106.43

Pivot point: 105.60

USD/JPY – Trading Tips

On Wednesday, the USD/JPY is also trading bullish at 105.750 over the stronger U.S. dollar; however, the recent bullish bias in safe-haven Japanese yen drives a slight bearish correction in the market. On the 4 hour chart, the double top resistance level of the 105.800 level keeps the pair bearish. In case of a bullish breakout, the 105.800 resistance level may lead the USD/JPY pair towards the next target level of 106.240. On the lower side, the USD/JPY may find support at 105.400 level today. I will be looking to take a buy position over the 105.810 level. Good luck! 

Categories
Forex Signals

USDJPY Swing Failure Sell

Flow Assessment

Buyers slowing down at a key sell area on H4.

Location Assessment

Price is close to H4 sellers area and buyers are not breaking through.

Momentum Assessment

Buyers are showing signs of failure on the 2nd try to make a higher high.

Entry Price – Sell 105.611

Stop Loss – 105.945

Take Profit – 104.400

Risk to Reward – 1:3.63

Profit & Loss Per Standard Lot = -$315.7/ +$1145

Profit & Loss Per Micro Lot = -$31.57/ +$114.50

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Categories
Forex Signals

USDJPY Swing Failure Sell

Flow Assessment

Buyers slowing down at a key sell area on H4.

Location Assessment

Price is close to H4 sellers area and buyers are not breaking through.

Momentum Assessment

Buyers are showing signs of failure on the 2nd try to make a higher high.

Entry Price – Sell 105.611

Stop Loss – 105.945

Take Profit – 104.400

Risk to Reward – 1:3.63

Profit & Loss Per Standard Lot = -$315.7/ +$1145

Profit & Loss Per Micro Lot = -$31.57/ +$114.50

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

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Categories
Forex Market Analysis

Daily F.X. Analysis, October 06 – Top Trade Setups In Forex – U.S. and ECB Central Bankers to Speak!

On the news front, the eyes will remain on the Central Bank officials such as Fed Chair Powell Speaks and ECB President Lagarde Speaks. The ECB President Lagarde is due to speak at a fireside chat at the Wall Street Journal’s online CEO Summit while Fed Chair Powell is due to talk about the U.S. economic outlook at the National Association of Business Economics annual meeting, via satellite. Audience questions are also expected.

Economic Events to Watch Today  


EUR/USD – Daily Analysis

The EUR/USD closed at 1.17824 after placing a high of 1.17973 and a low of 1.17047. Overall the movement of the EUR/USD pair remained bullish throughout the day. On Monday, the EUR/USD pair rose to its nine days highest level amid the broad-based U.S. dollar weakness and the strong positive macro-economic data from the European side.

The U.S. dollar was lower on Monday after the news about U.S. President Donald Trump’s health came into the market. The hopes that Trump will recover soon and be discharged from his military hospital as soon as Monday raised risk sentiment in the market and weighed on the safe-haven U.S. dollar. The fears that U.S. Presidential elections might not take place on schedule also dropped after the reports of Trump’s possible release from the hospital.

Another factor helping the risk sentiment was the hopes that U.S. stimulus measures will now be delivered soon as Trump’s infection has brought the virus to Capitol Hill. Both Democrats and Republicans will now realize the urgency of responding to the virus impact and reach a consensus over the aid bill’s size. The renewed stimulus hoped also added strength to the risk sentiment and helped the EUR/USD pair to gain further.

On the data front, at 12:15 GMT, the Spanish Services PMI for September dropped to 42.4 against the expected 46.4. AT 12:45 GMT, the Italian Services PMI rose to 48.8 from the projected 46.7 and supported Euro. At 12:50 GMT, the French Final Services PMI came in line with the expectations of 47.5. At 12:55 GMT, the German Final Services PMI rose to 50.6 against the forecasted 49.1 and supported Euro. 

At 13:00 GMT, the Final Services PMI for the whole Eurozone also rose to 48.0 from the anticipated 47.6 and supported the Euro currency. At 13:30 GMT, the Sentix Investor Confidence came in as -8.3 against the forecasted -9.2 and supported Euro. At 14:00 GMT, the Retail Sales from Europe rose to 4.4% from the expected 2.4% and supported Euro.

The Retail Sales in August from Eurozone raised nearly double than expectations to 4.4% and supported the local currency against its rival U.S. dollar and pushed the EUR/USD pair higher.

The Services PMI from all over European nations also rose and showed that the service industry improved from their previous levels and helped Euro to post gains. Furthermore, the Eurogroup meeting and the Financial Affairs Council meeting will start on 5-6th October. The Eurogroup will discuss its priorities under its new presidency and adopt a work program. The Eurozone’s policy priorities in the context of economic recovery and the draft budgets for 2021 will be discussed. Traders will look forward to meeting results for finding fresh clues about the EUR/USD pair in the coming days.

Daily Technical Levels

Support Resistance

1.1726    1.1817

1.1670    1.1854

1.1634    1.1909

Pivot point: 1.1762

EUR/USD– Trading Tip

On Monday, the EUR/USD has mostly traded in line with our forecast to test the resistance level of 1.1801 level. On Tuesday, the EUR/USD is trading below a resistance level of 1.1801 level. Below this mark, the EUR/USD can plunge until the support resistance level of 1.1760 and 1.1740. In contrast, an upward breakout of 1.1801 can lead the EUR/USD pair towards 1.1840 areas. Let’s keep an eye on the Fed Chair Powell and ECB President Lagarde Speaks to determine further market trends. The bullish bias remains dominant today.


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.29726 after placing a high of 1.29920 and a low of 1.28995. Overall the movement of the GBP/USD pair remained bullish throughout the day. The GBP/USD pair extended its previous daily gains and reached its 11-day highest level above 1.299 level on Monday amid the broad-based U.S. dollar weakness and renewed Brexit deal hopes along with the improving risk sentiment around the market.

The British Pound to U.S. dollar exchange rate moved higher on Monday on rising expectations that the U.K. and E.U. will reach a consensus on the post-Brexit trade deal. The Goldman Sachs forecasted that both parties would reach a deal by early November.

Another factor involved in the Brexit deal’s raised hopes was the report that suggested that E.U. chief negotiator Michel Barnier aimed to hold talks with European coastal states to get the freedom to negotiate terms with the U.K. on the fisheries issue. It is one of the sticking points that have caused a delay in the Brexit deal progress. The Brexit hopes were further bolstered after Prime Minister Boris Johnson and European Commission president Ursula von der Leyen agreed that talks should be intensified to close the significant gap that has stalled the negotiations’ progress. 

All these above optimistic reports helped the local currency and pushed the GBP/USD pair on the above side. The bullish calls were supported by Goldman Sachs that urges investors to buy Sterling. However, the Goldman Sachs Bank did not completely take the prospect of no-deal Brexit out off the table and said that No-Deal Brexit’s perceived probability would remain intact beyond the next European Council meeting in mid-October.

If no deal is reached between the E.U. and U.K., Britain will leave the E.U. without a deal at the end of the transition period on December 31.

Meanwhile, on the data front, at 13:30 GMT, the Final Services PMI from Great Britain for September rose to 56.1 against the 55.1 and supported GBP. The stronger than expected Services PMI showed an expansion in the U.K. services activities and supported the already rising GBP/USD pair on Monday.

However, the U.S. dollar was weaker on Monday due to the rising risk sentiment on the reports of the quick recovery of the U.S. President Donald Trump from coronavirus infection. The reports suggested that Trump would be released from his military hospital as soon as Monday, and he raised the risk sentiment after breaking the concerns that election might suffer from his illness. The weak U.S. dollar onboard, along with the improved risk sentiment, also helped the GBP/USD pair’s gains on Monday.

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 holding over a strong resistance become a support level of 1.2954 level. On the 4 hour timeframe, the Cable has formed an upward channel supporting the pair around 1.2950 and 1.2925 level. Whereas, the resistance stays at 1.3003 and 1.3058 level. The MACD and 50 EMA support bullish bias, which may keep the GBP/USD pair bullish over 1.2956 level. Let’s consider taking buying trades over 1.3000 level and bearish below the same level to target 1.2956. 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.735 and a high of 105.792 and a low of 105.228. Overall the movement of the USD/JPY pair remained bullish throughout the day. After posting hefty losses on Friday, USD/JPY reversed its direction and moved higher on Monday amid the improved risk sentiment and rising optimism in the market. 

The market’s mood was improved on Monday after a bumpy weekend related to the concerning news about the health of U.S. President Donald Trump. The Leader of the world’s largest economy was tested positive for coronavirus on Friday and was shifted to a military medical facility for treatment. The Contradictory headlines about his health and its effects on upcoming Presidential elections were raising concerns throughout the weekend. However, after the weekend, the news suggested that Trump was recovering, and he will be released from the hospital as soon as Monday. 

This news canceled the above fears and raised optimism around the market, boosting risk sentiment. The U.S. equities and the U.S. Treasury yields raised on the day, giving a boost to the U.S. dollar. Simultaneously, the rising risk sentiment weighed on the safe-haven Japanese Yen and pushed the USD/JPY pair on Monday.

On the data front, at 18:45 GMT, the Final Services PMI in September from the United States remained flat with the forecasts of 54.6. While at 19:00 GMT, the highlighted ISM Services PMI from the United States rose to 57.8 against the forecasted 56.3 and supported the U.S. dollar.

The ISM Services PMI showed an expansion in U.S. services activities in September and raised hopes for the quick economic recovery that helped improve the market’s risk sentiment and weighed on the Japanese Yen due to its safe-haven nature and ultimately pushed the USD/JPY pair even higher.

Moreover, the risk sentiment was also supported by the better than expected Retail Sales report from the European Union on Monday that doubled the expected number and supported riskier assets. The European stocks raised after this report, and U.S. stocks followed them that raised the market’s risk sentiment and helped the riskier GBP/USD pair gain further in the market.

Meanwhile, the USD/JPY pair’s gains remain limited by the rising fears of a second wave of coronavirus globally in the winter season. From all across the globe, the reports were suggesting a rising number of coronavirus cases. Europe struggled hard to fight against the pandemic and contained the spread as France and the U.K. saw a continuous rise in the number of daily count on infection cases. 

Meanwhile, other countries like Oman, Israel, India, France, Canada, UK, and Japan also reported a rise in the number of infected people. This raised global concerns supported the safe-haven appeal and capped further gains in the USD/JPY pair.

Daily Technical Levels

Support Resistance

105.39    105.91

105.08    106.12

104.88    106.43

Pivot point: 105.60

USD/JPY – Trading Tips

The USD/JPY is also trading bullish at 105.650 over the stronger U.S. dollar; however, the recent bullish bias in safe-haven Japanese yen drives a slight bearish correction in the market. On the 4 hour chart, the double top resistance level of the 105.800 level keeps the pair bearish. In case of a bullish breakout, the 105.800 resistance level may lead the USD/JPY pair towards the next target level of 106.240. On the lower side, the USD/JPY may find support at 105.400 level today. I will be looking to take a buy position over the 105.810 level. Good luck! 

Categories
Forex Market Analysis

Daily F.X. Analysis, October 02 – Top Trade Setups In Forex – Brace for Non-farm Payroll! 

On the news front, it’s going to be a busy day, as the U.S. economy will be releasing it’s Non-farm payroll figures. For all the new members, the NFP is the most awaited data, and it’s expected to show an 8.2% unemployment rate along with a 0.5% average hourly earnings. Such a figure should drive buying in the dollar, and gold may dip on the positive news release today. However, the 900K Non-farm employment change is below 1371K figures beforehand, which may burden on the U.S. dollar. The mixed movement is expected from the dollar today.

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD prices were closed at1.17455 after placing a high of 1.17695 and a low of 1.17170. Overall the movement of the EUR/USD pair remained bullish throughout the day. On Thursday, EUR/USD prices rose on the back of upbeat European stock market amid improved risk sentiment due to rising hopes of U.S. stimulus measure and some positive corporate news.

Different European companies reported gains, and increased sales in September gave signals of a significant recovery in the European corporate sector. It raised the European currency against its rival U.S. dollar and supported the upward trend of the EUR/USD pair on Thursday.

Meanwhile, the optimism raised in the market related to the U.S. stimulus measures after U.S. Treasury Secretary Steven Mnuchin confirmed that talks with Nancy Pelosi had a significant breakthrough. However, the differences were still there. The fact that both sides were showing a willingness to reach a consensus and issue the next round of aid raised bars that the U.S. Congress would announce the package sooner.

These hopes in the market supported the risk sentiment that helped the riskier Euro currency to post gains against its rival U.S. dollar and push the EUR/USD pair even higher.

On the data front, at 12:15 GMT, the Spanish Manufacturing PMI for September remained flat with the expectations of 50.8. At 12:45 GMT, the Italian Manufacturing PMI dropped to 53.2 from the forecasted 53.6 and weighed on Euro. At 12:50 GMT, the French Final Manufacturing PMI for September increased to 51.2 against the forecast of 50.9. At 12:55 GMT, the German Final Manufacturing PMI remained flat with the projected 56.4. At 13:00 GMT, the Final Manufacturing PMI for the whole Eurozone also came in line with the expectations of 53.7. The Italian Monthly Unemployment Rate for August dropped to 9.7% against the expectations of 10.2% and supported Euro. 

At 14:00 GMT, the Producer Price Index for Eurozone dropped to 0.1% against the expectations of 0.2% and weighed on local currency. Whereas, the Unemployment Rate for the whole bloc remained flat with forecasts at 8.1%. Most data from Europe on Thursday came in as expected and supported Euro that also added further gains in EUR/USD pair.

On the U.S. side, the U.S. dollar remained depressed on Thursday after the release of negative ISM Manufacturing PMI and Personal Income data. At 17:30 GMT, the Personal Income for August dropped to -2.7% from the expected -2.0% and weighed on the U.S. dollar. At 19:00 GMT, the ISM Manufacturing PMI from the U.S. fell short of expectations of 56.0 and came in as 55.4 and weighed on the U.S. dollar.

The U.S. dollar index also fell by 0.2% on Thursday, and this weakness drove the EUR/USD pair in the upward direction, but the gains remained limited as the European countries were forced to implement renewed restrictions due to the second wave of coronavirus. 

On Wednesday, European countries like Finland, Spain, the Czech Republic, Slovakia, Spain, and Poland implemented new restrictions as the infection cases were continuously increasing. These restrictions kept the local currency under pressure, and the gains in EUR/USD pair limited on Thursday.

Daily Technical Levels

Support Resistance

1.1718      1.1771

1.1691      1.1797

1.1665      1.1824

Pivot point: 1.1744

EUR/USD– Trading Tip

The EUR/USD has violated the upward trendline support level of 1.1728 level, and now the same level is working as a resistance for the EUR/USD. Below this, the EUR/USD can trade with a bearish bias until the 1.1695 level. Conversely, negative NFP figures may lead the EUR/USD price towards the 1.1755 level. The bearish bias remains strong today.

GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.28859 after placing a high of 1.29785 and a low of 1.28194. Overall the movement of the GBP/USD pair remained bearish throughout the day. After posting gains for six consecutive days, the GBP/USD pair dropped on Thursday amid different headlines in the market related to Brexit talks. The talks between the U.K. and the E.U. suggested some progress in breaking the deadlock in Brexit talks.

The comments after the latest round of talks between the U.K. & E.U. over the post-Brexit deal provided differing reports of progress that suggested that both sides were far from reaching a consensus. This weighed on the Sterling and dragged the pair GBP/USD from its previous daily gains.

The differences over the key sticking issues like fisheries and level playing fields remain intact in the latest trade negotiations. Some reports suggested that a landing zone on state aid has been identified between the E.U. & the U.K., and the only fishing issue was left. Both reports were providing different information, and this confused the market traders and raised fears of a no-deal Brexit that weighed on local currency and ultimately on the GBP/USD pair.

The Cabinet Office Minister Michael Gove said that the U.K. has already made it clear that it will not look into the demands to take control over the access to its waters and fish after the Brexit-transition period. He said that the U.K. would rather leave the E.U. without a Brexit deal than sticking with the E.U.’s Common Fisheries Policies. 

The U.K. has also issued an internal market bill that undermines the withdrawal agreement, and this has already made the E.U. angry. The chances for a no-deal Brexit are increasing day by day as the E.U. has threatened to take legal actions against the U.K. in response to the internal market bill. The pressure over negotiators has been increased to reach a consensus before the European Summit on October 15 as the top E.U. negotiator Michel Barnier will have to address the latest updates on Brexit negotiations.

Meanwhile, on the data front, the Final Manufacturing PMI from the U.K. came in line with the expectations of 54.1. And from the U.S. side, the ISM Manufacturing PMI dropped to 55.4 from the forecasted 56.0 and weighed on the U.S. dollar that capped further losses in the GBP/USD pair on Thursday.

Moreover, on Thursday, the Bank of England’s governor Andy Haldane said that the corporate sector needed to spend more and hire more people to make the economic recovery smooth. He addressed that corporate investments were the missing ingredient in the economic recovery, and it should be met to see further growth in the economy.

Daily Technical Levels

Support Resistance

Support Resistance

1.2812     1.2974

1.2735     1.3057

1.2651     1.3135

Pivot Point: 1.2896

GBP/USD– Trading Tip

The GBP/USD is also supported over a strong trading range of 1.2835 – 1.2810 support levels. Above this range, the Cable will always have strong odds of bouncing off until 1.2901 and 1.2945 level. At the same time, a bearish breakout of 1.2811 level may lead the Sterling towards 1.2764 level. Today, we should look for a buy trade 1.2896 until the next target level of 1.2950 as the market is likely to stay supported. Let’s brace for the U.S. non-farm payroll data today to have further certainty about the pair. 


USD/JPY – Daily Analysis

The USD/JPY closed at 105.543 after placing a high of 105.726 and a low of 105.401. Overall the movement of the USD/JPY pair remained bullish throughout the day. Despite the broad-based U.S. dollar weakness and negative ISM Manufacturing PMI, the USD/JPY pair posted small gains on the day and climbed to a fresh daily high of 105.726 level. The upward momentum in the USD/JPY pair could be attributed to the improved risk sentiment in the market after the hopes for a U.S. stimulus package from the U.S. Congress increased.

On Thursday, the U.S. Treasury Secretary Steven Mnuchin said that he held talks with Nancy Pelosi to discuss the next round of U.S. stimulus measures, and he hoped that it would be released soon. The difference in the size of the package between Republicans & Democrats is still there, but they have agreed that consensus should be quickly reached, so the optimism surrounding the package increased and weighed on the safe-haven Japanese Yen that ultimately added Support to the USD/JPY pair. 

Meanwhile, on the data front, at 04:50 GMT, the Tankan Manufacturing Index came in as -27 against the forecast of -23 and weighed on the Japanese Yen. The Tankan Non-Manufacturing Index also dropped to -12 from the expected -9 and weighed on the Japanese Yen. The negative data from Japan gave strength to the USD/JPY pair on Thursday in early trading hours. 

However, at 05:30 GMT, the Final Manufacturing PMI from Japan rose to 47.7 against the projected 47.3 in September and supported the Japanese Yen that capped further upside momentum in the USD/JPY pair.

From the USD side, at 17:30 GMT, the Core PCE Price Index for August remained flat with the expectations of 0.3%. Personal Spending in August rose to 1.0% against the projected 0.7% and supported the U.S. dollar. The Unemployment Claims from last week also dropped to 837K against the expected 850K and supported the U.S. dollar. The Personal Income in August dropped to -2.7% against the forecasted -2.0% and weighed on the U.S. dollar.

At 18:45 GMT, the Final Manufacturing PMI for September remained flat with the expectations of 53.2. At 19:00 GMT, the ISM Manufacturing PMI dropped to 55.4 from the projected 56.0 in September and weighed on the U.S. dollar. Whereas, Construction Spending in August rose to 1.4% against the expected 0.8% and supported the U.S. dollar. The ISM Manufacturing Prices also rose to 62.8 from the forecasted 59.0 and supported the greenback.

The Wards Total Vehicle Sales from the U.S. also rose to 16.3M from the anticipated 15.5M in September and supported the U.S. dollar.

The U.S. dollar was weak across the board on Thursday, as the U.S. Dollar Index (DXY) posted 0.2% losses on the day. However, the USD/JPY pair still manage to post gains on the day due to positive data releases. Most of the data released on Thursday came in Support of the U.S. dollar except the highlighted data of ISM Manufacturing PMI. But traders tend to ignore the declining PMI and focused more on other positive releases like Personal Spending and Unemployment claims.

Daily Technical Levels

Support Resistance

Support Resistance

105.35    105.70

105.20    105.90

104.99    106.05

Pivot point: 105.55

USD/JPY – Trading Tips

The USD/JPY has violated the double bottom support level of 105.277 level amid an increased safe-haven appeal. The coronavirus news of Trump and his wife testing positive is making the market volatile. The technical side of USD/JPY continues to be bearish around 105.200, and the series for EMA is now extending resistance at 105.550 level. On the flip side, the support holds at 104.800 level. The MACD also supports the selling bias amid a stronger Japanese yen due to increased safe-haven appeal. Bearish trend continuation and violation of the 104.800 level can open additional room for selling until 104.350. Good luck! 

 

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Forex Market Analysis

Daily F.X. Analysis, October 01 – Top Trade Setups In Forex – Manufacturing PMI in Highlights! 

On the news front, the eyes will remain on the series of services PMI figures from the Eurozone and the U.K. Most of the data is expected to be neutral; however, the U.S. Unemployment Claims and Manufacturing PMI will be the main highlight of the day. Claims are expected to perform better, while the ISM Non-Manufacturing PMI is expected to report negative figures. Mixed bias prevail for the U.S. dollar today.

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD closed at 1.17208 after placing a high of 1.17548 and a low of 1.16844. After posting gains for two consistent days, the EUR/USD pair dropped on Wednesday amid the broad-based U.S. dollar strength. Another major reason behind the fall in EUR/USD prices on Wednesday was the latest comments from ECB President Lagarde of talking up an idea of moving toward the average inflation targeting measure like the U.S. Fed to fight against pandemic recession. 

Lagarde said on Wednesday that ECB was considering following the footsteps of the U.S. Federal Reserve to ditch its current policy that sets the target of inflation below but close to 2%. The debate over whether ECB should follow the Fed in setting an average inflation target and let inflation run above 2% target came in as analysts suggested that the central bank was running out of tools. Another reason could be a low appetite for cutting interest rates below zero. These dovish hopes kept the market risk sentiment under pressure, and the Euro currency suffered that led to declining EUR/USD pair prices on Wednesday. 

Meanwhile, at the data front, the German Import Prices in August rose to 0.1% from the projected 0.0% and supported Euro. At 10:59 GMT, the German Retail Sales for August also rose to 3.1% from the anticipated 0.4% and supported Euro. 

The French Consumer Spending for August rose to 2.3% from the anticipated -0.2% and supported shared currency. The French Prelim Consumer Price Index (CPI) for September declined to -0.5% against the projected -0.3% and weighed on Euro. 

At 12:55 GMT, the German Unemployment Change in August came in as -8K against the forecasted -7K. At 14:00GMT, the Italian Prelim CPI for September declined to -0.6% against the forecasted -0.5% and weighed on single currency Euro. 

On the U.S. front, at 17:15 GMT, the ADP Non-Farm Employment Change showed a job creation of 749K against the forecasted 650K in September and supported the U.S. dollar. At 17:20 GMT, the Chicago Purchasing Managers Index (PMI) advanced to 62.4 from the forecasted 52.0 and supported the greenback. At 17:30 GMT, the Final GDP for the quarter came in as -31.4% against the projected -31.7% and supported the U.S. dollar. At 19:00 GMT, the Pending Home Sales also rose to 8.8% from the projected 3.1% and supported the U.S. dollar.

Despite the strong economic data from Europe, the pair EUR/USD continued declining on Wednesday as the focus has been shifted towards the U.S. dollar and its strength. The strong greenback managed to keep the pair under heavy pressure on Wednesday amid several factors supporting U.S. dollar gains. Furthermore, the U.S. dollar also gained its strength as the hopes for a new round of U.S. stimulus measures finally increased. Steven Mnuchin, the U.S. Treasury Secretary, said that the talks between Democrats and Republicans over the next round of the coronavirus aid package have resumed. This raised optimism in the market that both parties will reach a consensus soon given Tuesday’s statement of Lagarde in which she reiterated that she had high hopes that both parties will reach a deal by the end of this week. The broad-based greenback’s strength kept weighing on the EUR/USD pair on Wednesday.

Daily Technical Levels

Support Resistance

1.1686       1.1772

1.1630       1.1802

1.1600       1.1858

Pivot Point: 1.1716

EUR/USD– Trading Tip

The bullish bias of the EUR/USD continues to play in the market as the pair is trading at 1.1740 level. On the higher side, the EUR/USD pair may find resistance at 1.1750 level along with a support level of 1.1716 level. A bearish breakout of the 1.1715 level can extend selling bias until the 1.1694 level today. Overall, the price action of the EUR/USD pair will be highly influenced by the series of manufacturing PMI figures not only from the Eurozone but also from the U.S. economy. Bullish bias will be dominant upon the breakout of 1.1750.


GBP/USD – Daily Analysis

The GBP/USD closed at 1.29232 after placing a high of 1.29424 and a low of 1.28051. Overall the movement of the GBP/USD pair remained bullish throughout the day. The GBP/USD pair continued its bullish streak for the 6th consecutive days on Wednesday despite the broad-based U.S. dollar weakness. The upward momentum of GBP/USD could be attributed to the renewed Brexit hopes and positive comments from Haldane. 

On Wednesday, the U.S. Dollar Index remained flat at 93.92 despite the strong macroeconomic releases on the day. At 17:15 GMT, the ADP Non-Farm Employment Change from the United States rose to 749K against the expectations of 650K and supported the U.S. dollar. At 17:20 GMT, the Chicago PMI also rose to 62.4 from the expected 52.0. At 17:30 GMT, the Final GDP for the quarter showed a contraction of -31.4% in the second quarter against the projected contraction of -31.7%. At 19:00 GMT, the Pending Home Sales for August rose to 8.8% against the forecasted 3.1%. All these positive data from the U.S., but still GBP/USD pair managed to post gains on the back of high Brexit hopes. 

On Wednesday, the Cable moved higher as the latest headlines out of Brexit negotiations were positive. The E.U.’s chief negotiator Michel Barnier praised the improved atmosphere around the post-Brexit deal on Wednesday. The member states ordered France to back down from its demands to secure status quo access to Britain’s fishing grounds. Barnier said that a breakthrough could be made during this week’s round of negotiation as both sides had been able to engage more closely on fishing and state aid issues.

Apart from Brexit renewed hopes, the comments from Bank of England’s chief economist Andy Haldane also provided support to the rising GBP/USD pair. Haldane said that Britain’s economy was being held back by the overly pessimistic views about the coronavirus crisis. He provided some relief when he said that none of the conditions that would lead to negative interest rates had been met. 

It means his comments ruled out the option of negative interest rates in the current period when the country is facing a healthy and robust wave of coronavirus pandemic. These positive comments from Haldane supported British Pound that pushed the GBP/USD pair on the upside for the 6th consecutive days.

From the U.K., the BRC Shop Price Index for the year dropped to -1.6% against the forecasted -1.4% and weighed on Sterling. At 10:59 GMT, the Nationwide HPI for September rose to 0.9% against the forecasted 0.5% and supported the Sterling that added gains in GBP/USD pair. At 11:00 GMT, the Current Account Balance from the U.K. showed a deficit of 2.8B against the forecasted deficit of 1.0B and weighed on British Pound. The Final GDP for the quarter showed a contraction of -19.8% against the forecasted contraction of -20.4% and supported the local currency GBP that ultimately provided added support to GBP/USD pair’s gains on Wednesday. At 11:02 GMT, the Revised Business Investment for the quarter came in as -26.5% against the forecasted -31.4% and supported the upward momentum of the GBP/USD pair.

Daily Technical Levels

Support Resistance

1.2821       1.2902

1.2781       1.2943

1.2740       1.2983

Pivot point: 1.2862

GBP/USD– Trading Tip

The GBP/USD is consolidating with a bullish bias at 1.2875 level, having violated the sideways trading range of 1.2770 to 1.2725 level. Most of the buying trend was triggered amid stronger Sterling and weakness in the U.S. dollar. The Cable has formed an upward channel on the hourly chart that may support the pair at 1.2827 level along with a resistance level of 1.2909 level. Bullish crossover of 1.2900 level can open up further buying room until 1.2998 level today. Let’s consider taking buying trades over 1.2827 level today. 

 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.436 after placing a high of 105.802 and a low of 105.400. The USD/JPY pair broke its 7-days bullish streak on Wednesday and declined on Wednesday to its lowest level at 105.400. The USD/JPY pair managed to post losses on Wednesday despite the strong macroeconomic data releases from the U.S. 

On the data front, at 04:50 GMT, the Prelim Industrial Production from the United States in August rose to 1.7% from the forecasted 1.5% and supported the Japanese yen that ultimately weighed on the USD/JPY currency pair. The Retail Sales from Japan came in as -1.9% against the forecasted -3.2% and supported the Japanese Yen that exerted weighed on the USD/JPY pair. The Housing Starts for the year came in as -9.1% against the forecasted -10.0% and supported the Japanese Yen. The strong macroeconomic data from Japan pushed the Japanese Yen higher against the U.S. dollar and weighed on the USD/JPY pair.

On Wednesday, the U.S. Dollar Index (DXY) remained flat at 93.92 level but posted monthly gains in September by 2% and losses for the 3rd quarter by 3.5%. The steady U.S. dollar was due to the un-decisive presidential debate. Both candidates Donald Trump and Joe Biden took part in the first of third presidential debate on Tuesday and discussed issues like the coronavirus pandemic, Trump’s leadership, and the U.S. economy along with taxes. However, the debate failed to provide clues about the results of upcoming elections and weighed on the U.S. dollar that dragged the USD/JPY pair’s prices.

Moreover, the renewed hopes about the Stimulus package came under headlines after Steven Mnuchin said that the White House would hold talks with Democrats over the stimulus issue. Meanwhile, the Governor of Federal Reserve, Michelle Bowman, said that economic recovery from the pandemic crisis was bumpy because of the high rate of unemployment and persisting need for support from fiscal and monetary departments of the U.S.   

The President of Federal Reserve Bank of Minneapolis, Neel Kashkari, also called the U.S. economic recovery as grinding and told the lawmakers that it would remain the same unless a dramatic change or sooner than expected breakthrough in vaccine development. He said that to smooth the economic recovery of the world’s largest economy, a dramatic policy change was needed. The above comments from Fed officials also had a role in the downward movement of the USD/JPY pair on Wednesday.

Daily Technical Levels

Support Resistance

105.41      105.82

105.17      105.99

105.00      106.23

Pivot point: 105.58

  

USD/JPY – Trading Tips

The technical side of the safe-haven pair USD/JPY continues to be steady as it’s consolidating with a bullish bias to trade at 105.460 level, and the series for EMA is now extending at 105.750 level. On the lower side, the support holds at 105.300 level. The MACD also supports the bullish bias amid a stronger U.S. dollar and diminished safe-haven appeal. A bullish crossover of the 105.750 is likely to lead the USD/JPY price towards the next resistance level of 106.250. As we can see, the 50 periods EMA is also in support of buying; therefore, we should look for buying trades in the USD/JPY pair. However, bearish trend continuation and violation of the 105.300 level can open further room for selling until 104.900. Good luck! 

 

Categories
Forex Market Analysis

Daily F.X. Analysis, September 30 – Top Trade Setups In Forex – ECB President Lagarde Speaks Ahead! 

The eyes will remain on the German Prelim CPI and Spanish CPI figures during the European session on the news front. At the same time, the C.B. Consumer Confidence and series of FOMC member’s speeches are likely to remain in the highlights today. Economists are expecting C.B. Consumer Confidence to perform better than before. Therefore the U.S. dollar can trade with a bullish bias today.

Economic Events to Watch Today  

 

 

EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.17416 after placing a high of 1.17452 and a low of 1.16569. Overall the movement of the EUR/USD pair remained bullish throughout the day. On Tuesday, the EUR/USD pair surged and recovered most of its previous 3-4 days losses on the back of broad-based U.S. dollar weakness and rising risk sentiment in the market. The U.S. dollar came under fresh pressure ahead of the U.S. first Presidential debate and provided great support to its rival currency Euro on Tuesday.

The dovish comments from the ECB president and the weakness of its rival currency U.S. dollar improved the market’s risk sentiment ahead of the U.S. presidential debate and supported the riskier EUR/USD currency pair on Tuesday.

On the data front, The German Prelim Consumer Price Index (CPI) for September dropped to -0.2% from the projected -0.1% and weighed on single currency Euro. At 12:00 GMT, the Spanish Flash CPI for the year remained flat with the projected -0.4%. The data from Europe had an almost null impact on EUR/USD pair because traders’ focus was solely on the U.S. dollar weakness amid the rising hopes of next U.S. stimulus measures.

From the U.S. side, at 17:30 GMT, the Goods Trade Balance for August dropped to -82.9B from the expected -81.8B and weighed on the U.S. dollar. In August, the Prelim Wholesale Inventories rose to 0.5% from the forecasted -0.1% and weighed on the U.S. dollar. The weak U.S. dollar added further support to the rising EUR/USD prices. The greenback was further declined after the dovish comments from Fed officials on Tuesday and the U.S. stimulus package’s rising hopes.

The U.S. Treasury Secretary Steven Mnuchin and the House Speaker Nancy Pelosi have said that the next round of coronavirus aid packages will be delivered soon. Both parties held a meeting on Monday and were optimistic that a deal between Republicans & Democrats was highly possible on the $2.2Tpackage.

These rising optimism added to the risk sentiment and provided strength to the Euro currency against the U.S. dollar. The U.S. Dollar Index was already under pressure and was testing the critical support zone near 93.40 level on Tuesday, and Euro’s regained strength pushed it even on the downside. Meanwhile, the latest move from ECB’s President Christine Lagarde over the next round of stimulus package from the European government to refrain from mentioning anything about it and saying that the bank was ready to act as need, also supported the risk sentiment and rising EUR/USD prices.

Lagarde said that coronavirus’s impact across Europe was still intact as people were continuously losing their jobs, and the prospects for the future were still uncertain. She said that economic activity in the third quarter was rebounded, but the recovery was still incomplete, uneven, and uncertain. These dovish comments kept weighing the local currency.

However, the main driver of EUR/USD’s latest surge was the weak U.S. dollar because the Euro was facing an all-time pressure of rising coronavirus cases in the region. As the coronavirus infections rose in European nations, the need for stimulus also increase and exerted downside pressure on the Euro currency. These lingering fears that the second wave of coronavirus pandemic could cause a lasting impact on the European economy kept the gains in the EUR/USD pair limited on Tuesday. As for the U.S. dollar weakness, it is expected to remain until the U.S. Presidential debate between Joe Biden and Donald Trump that will start late at night in the U.S.

Daily Technical Levels

Support Resistance

1.1625      1.1689

1.1588      1.1716

1.1561      1.1754

Pivot point: 1.1652

EUR/USD– Trading Tip

The EUR/USD is trading at 1.1722 level, facing immediate resistance at 1.1760 level that marks a double top pattern for the EUR/USD. The bullish crossover of 1.1760 level can open further room for buying until the 1.1807 area, while the bearish trend continuation below 1.1685 level may lead the EUR/USD price towards 1.1654 and 1.1627 level today. Let’s consider taking buying trades over 1.1650 today.

GBP/USD – Daily Analysis

The GBP/USD closed at 1.28527 after placing a high of 1.29027 and a low of 1.28225. Overall the movement of the GBP/USD pair remained bullish throughout the day. The GBP/USD pair extended its bullish streak for the 5th consecutive day on Tuesday. The gains in the GBP/USD pair were due to the broad-based U.S. dollar weakness. The Brexit talks were resumed on Tuesday that also helped GBP/USD pair to gain some traction. However, the gains in currency air were limited as the United Kingdom was facing a strong wave of coronavirus pandemic. The dovish comments from Bank of England’s president also capped further upside in the GBP/USD pair.

The greenback was weak across the board ahead of the first U.S. presidential debate between U.S. President Donald Trump and Former U.S. President Joe Biden that will begin late in the U.S. on Tuesday. The renewed hopes that the U.S. will announce the next round of coronavirus aid package soon after White House Speaker Nancy Pelosi said that she hoped that Democrats and Republicans would reach a consensus on the stimulus package soon.

Apart from U.S. dollar weakness, the positive data from Great Britain also helped GBP/USD pair’s gains on Tuesday. The Mortgage Approvals from the U.K. hit their highest since October 2007 on Tuesday and reached 85K against the forecasted 72K in August and supported British Pound. Meanwhile, at 13:30 GMT, the Net Lending to Individuals dropped to 3.4B from the expected 5.2B and weighed on Pound. The unexpected rise in Mortgage Approvals in the U.K. added further support to the rising GBP/USD pair on Tuesday.

Furthermore, the Final round of Brexit talks between the U.K. and E.U. resumed on Tuesday despite the British Prime Minister Boris Johnsons attempt to undermine the Brexit withdrawal agreement by proceeding with an internal market bill. The negotiations mean that the Brexit deal was still on the table and could be reached, and this renewed Brexit deal hopes they supported the GBP/USD gains on the day.

Whereas, the gains were capped by many factors, including the ongoing strong wave of coronavirus pandemic in Great Britain. PM Johnson has already imposed many restrictions, including a new bill of six-people gathering and closing pubs, bars, and theaters before 10 pm, and the situation regarding pandemic is not settling.

Further restrictions would hurt the economic recovery and lead the central bank to look into negative interest rates. The latest comments made by the governor of Bank of England, Andrew Bailey, have increased the market’s fears. He said that BoE was not out of ammunition to fight with the pandemic crisis. He added that negative interest rates were not ruled out, but they were realistic options in a challenging environment. These dovish comments from the Bank of England governor weighed on local currency GBP and forced GBP/USD pair to lose some of its earlier daily gains.

On the U.S. front, the macroeconomic data was mixed and failed to provide a significant pair movement. Whereas, the U.S. Dollar Index saw fresh pressure and fell to 93.4 level ahead of the U.S. Presidential debate. This kept supporting the upward trend of GBP/USD throughout the day.

Daily Technical Levels

Support Resistance

1.2698      1.2791

1.2647      1.2833

1.2605      1.2884

Pivot point: 1.2740

GBP/USD– Trading Tip

The GBP/USD is trading with a bullish bias at 1.2875 level, having violated the sideways trading range of 1.2770 to 1.2725 level. Most of the buying trend was triggered amid stronger Sterling and weakness in the U.S. dollar. The Cable has formed an upward channel on the hourly chart that may support the pair at 1.2827 level along with a resistance level of 1.2909 level. Bullish crossover of 1.2900 level can open up further buying room until 1.2998 level today. Let’s consider taking buying trades over 1.2827 level today. 

 

USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.677 after placing a high of 105.733 and a low of 105.340. Overall the movement of the USD/JPY pair remained bullish throughout the day. The USD/JPY pair continued its bullish streak for the 7th consecutive day on Tuesday despite the broad-based U.S. dollar weakness across the board ahead of the Presidential debate on the day. The rally in the USD/JPY pair could be attributed to the improved risk sentiment in the market as the U.S. stimulus measure’s hopes increased.

Furthermore, the gains in the USD/JPY pair could also be attributed to the unexpected rise in the Consumer Confidence from the U.S. and the statements made by Fed officials.

The CEO of the New York Federal Reserve, John C. Williams, said that full employment and growth in the labor sector was needed to recover from the pandemic induced recession. He also added that the recession was more robust than it was expected, and it would almost need 3-years to go back to pre-pandemic levels. The President of Philadelphia Federal Reserve, Patrick Harker, said that as long as the vaccine is not approved, the economic recovery depends on the mask’s usage to control the spread of the virus. He said that even if the spread of the virus were slow down, the recovery would still need the employment figures to reach the fullest and this could only be possible if people would feel safe to go to their work and that is why the usage of masks eve in indoor holds an important part in economic recovery.

Harker also said that a renewed aid package was essential for coronavirus-affected individuals and unemployed people, and small businesses. He also proposed that a $1Trillion package in aid would be needed to help the falling U.S. economy. On the other hand, the Vice Chairman of the Federal Reserve, Richard Clarida, said that Fed would not increase interest rates until the employment reached its full level, and the inflation target is met or surpassed the 2% level. According to the Fed, the inflation target could be met in 2023, not before that, and it means the interest rates will remain at the lowest level for more than three years. This weighed on the greenback but failed to reverse the USD/JPY pair’s movement.

Furthermore, the U.S. Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi said that they were hopeful that a deal would be reached between Republicans & Democrats over the $2.2Trillion package. These optimistic hopes raised the market’s risk sentiment that weighed on the safe-haven Japanese Yen and supported the upward momentum of the USD/JPY pair.

On the data front, the Tokyo Core Consumer Price Index for the year came in as -0.2% against the forecasted -0.3% and supported the Japanese Yen. While at 17:30 GMT, the Goods Trade Balance from the U.S. dropped to -82.9B from the forecasted -81.8B and weighed on the U.S. dollar. In August, the Prelim Wholesale Inventories rose to 0.5% from the forecasted -0.3% and weighed on the U.S. dollar. At 18:00 GMT, the S&/CS Composite-20 HPI for the year from the U.S. rose to 3.9% from the projected 3.6^ and supported the U.S. dollar that added further strength to the USD/JPY pair on Tuesday. At 19:00 GMT, the C.B. Consumer Confidence rose to 101.8 points against the forecasted 90.0 points and supported the U.S. dollar that ultimately pushed the USD.JPY pair on the upside. Market traders are keenly awaiting the Presidential debate to find fresh clues about the election results that would highly impact the local currency U.S. dollar.

Daily Technical Levels

Support    Resistance

105.41      105.82

105.17      105.99

105.00      106.23

Pivot point: 105.58

  

USD/JPY – Trading Tips

The technical side of the safe-haven pair USD/JPY continues to be steady as it’s consolidating with a bullish bias to trade at 105.460 level, and the series for EMA is now extending at 105.750 level. On the lower side, the support holds at 105.300 level. The MACD also supports the bullish bias amid a stronger U.S. dollar and diminished safe-haven appeal. A bullish crossover of the 105.750 is likely to lead the USD/JPY price towards the next resistance level of 106.250. As we can see, the 50 periods EMA is also in support of buying; therefore, we should look for buying trades in the USD/JPY pair. However, bearish trend continuation and violation of the 105.300 level can open further room for selling until 104.900. Good luck! 

 

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Forex Market Analysis

Daily F.X. Analysis, September 29 – Top Trade Setups In Forex – C.B. Consumer Confidence in Focus! 

The eyes will remain on the German Prelim CPI and Spanish CPI figures during the European session on the news front. At the same time, the C.B. Consumer Confidence and series of FOMC member’s speeches are likely to remain in the highlights today. Economists are expecting C.B. Consumer Confidence to perform better than before. Therefore the U.S. dollar can trade with a bullish bias today.

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD closed at 1.16696 after placing a high of 1.16798 and a low of 1.16149. Euro to U.S. Dollar exchange rate saw fresh buying on Monday amid the broad-based U.S. dollar weakness. The U.S. dollar’s safe-haven rally was ended last week; however, the EUR/USD currency pair’s recovery was still limited on Monday.

Last week, the EUR/USD pair touched its lowest since 2-months at 1.1613 due to U.S. dollar strength gathered by safe-haven status. The U.S. stimulus package and coronavirus developments, and the coronavirus pandemic helped the U.S. dollar gain strength.

However, the U.S. dollar came under fresh pressure on Monday ahead of the U.S. Presidential debates will begin from Tuesday. The U.S. President Donald Trump and Joe Biden will face each other and debate over various topics, including the coronavirus pandemic, the U.S. economy, the latest race, and the protest issue, and the election integrity. 

The local currency faced heavy pressure before the debate and helped the EUR/USD pair to regain its strength in the market. The risk sentiment in the market was also emerging in the market with the developments made in a nasal spray for coronavirus infection. Researchers have revealed that promising results from nasal spray have been seen in ferrets; however, there was still a lot of work needed.

This news raised the EUR/USD prices as it is a riskier asset and tends to gain during times of depressed risk-averse sentiment. Meanwhile, the rising equities also helped the EUR/USD pair to post gains on Monday after the release of encouraging data from China. The rising equities also helped the rising EUR/USD pair on Monday.

However, the EUR/USD pair’s gains were limited after the speech of European Central Bank’s President, Christine Lagarde. She made fresh comments on the coronavirus pandemic threat and said that despite the rebounded economic activity in Eurozone, the recovery remains incomplete, uncertain, and uneven. 

She added that consumer spending has resumed, but they are still cautious about their jobs and income prospects, so the spending is behind its margin. Similarly, the business investment has picked up, but the weak demand and pertaining uncertainty have weighed on the investment plans. She also warned that Eurozone deflation would continue to persist in the coming months. She exclaimed that PEPP was very helpful and efficient in handling the coronavirus situation and confirmed that ECB would continue to stand ready to adjust all of its instruments in need. These concerning statements from Lagarde capped further gains in EUR/USD pair on Monday.

Daily Technical Levels

Support Resistance

1.1636      1.1698

1.1600      1.1724

1.1573      1.1760

Pivot point: 1.1662

EUR/USD– Trading Tip

The EUR/USD is trading at 1.1684 level, facing immediate resistance at 1.1685 level that marks a triple top pattern for the EUR/USD. The bullish crossover of 1.1685 level can open further room for buying until the 1.1715 area, while the bearish trend continuation below 1.1685 level may lead the EUR/USD price towards 1.1654 and 1.1627 level today. 


GBP/USD – Daily Analysis

Today in the Asian trading session, the GBP/USD currency pair continues to flash green and taking bids around above 1.2860 level, mainly due to the Brexit-positive headlines triggered after the E.U. stepped back from warnings to leave the trade and security talks. Meanwhile. They also showed a willingness to prepare a joint legal agreement, which keeps buyers hopeful and extended support to the currency pair. Apart from this, the currency pair got an additional boost after the Bank of England (BoE) policymaker eased the chance of negative interest rates in the short-term, which eventually underpinned the Brtish Pound and contributed to the currency pair gans. 

Across the pond, the broad-based U.S. dollar bearish tone ahead of the presidential debate also boosted the GBP/USD currency pair’s strong intraday positive move. The GBP/USD is trading at 1.2847 and consolidating in the range between 1.2832 – 1.2880. Moving on, the currency pair traders seem cautious to place any strong position ahead of crucial departure talks in the E.U.

It is worth recalling that the U.K. and Brussels are ready to resume the 9th-round of Brexit talks on the day. Reports suggest that negotiators will start the process to finalize a deal by the end of this week to hammer out an accord in time for the next E.U. summit in mid-October. However, the hopes of a Brexit deal were further fueled after the E.U. steps back from warnings to leave trade and security talks, shows a willingness to prepare a joint legal agreement. Hence, this news also ignores the U.K. Cabinet Minister Michel Gove’s refusal to remove the Internal Market Bill (IMB) clauses that confront the Brexit Withdrawal Agreement (WAB). This, in turn, boosted the sentiment around the British Pound and extended further support to the currency pair.

Besides, the reason for the currency pair bullish bias could also be associated with the latest reports suggesting that the Bank of England (BoE) policymaker, Dave Ramsden, lessened the possibility of negative interest rates in the short-term, which tend to underpin the local currency. Ramsden declared that he still sees the effective lower bound in the bank rate at 0.10%.

Daily Technical Levels

Support Resistance

1.2698     1.2791

1.2647     1.2833

1.2605     1.2884

Pivot point: 1.2740

GBP/USD– Trading Tip

On Tuesday, the GBP/USD pair is trading with a bullish bias at 1.2875 level, having violated the sideways trading range of 1.2770 to 1.2725 level. Most of the buying trend was triggered amid stronger Sterling and weakness in the U.S. dollar. The Cable has formed an upward channel on the hourly chart that may support the pair at 1.2827 level along with a resistance level of 1.2909 level. Bullish crossover of 1.2900 level can open up further buying room until 1.2998 level today. Let’s consider taking buying trades over 1.2827 level today. 

 


USD/JPY – Daily Analysis

The USD/JPY currency pair stopped its overnight declining streak and picked up some modest bids around above the mid-105.00 level, mainly due to the risk-on market. However, the positive tone around the equity market was being supported by the hopes of the U.S. stimulus package and optimism over the virus vaccine, which tend to undermine the safe-haven Japanese yen currency and contributed to the currency pair gains. 

On the contrary, the broad-based U.S. dollar weakness, triggered by the political uncertainty in the run-up to the U.S. Presidential election in November, becomes the key factor that kept the lid on any further gains in the currency pair. Apart from this, the concerns of increasing COVID-19 cases in many countries keep challenging the market trading sentiment, which might cap further gains in the currency pair. Currently, the USD/JPY currency pair is currently trading at 105.63 and consolidating in the range between 105.34 – 105.64. 

As we already mentioned that the market trading sentiment was being supported by optimism over a possible vaccine and treatment for the highly infectious coronavirus. These hopes fueled after the U.S. pharmaceutical giant Johnson and Johnson Inc COVID-19 vaccine experiment has shown a strong immune response to the coronavirus with a single dose in the early trial stages. Apart from this, the market trading sentiment was further bolstered by the Brexit-positive sentiment. These hopes came after the European Central Bank (ECB) President Christine Lagarde repeated that the Governing Council “continues to stand ready to adjust all of its instruments. This, in turn, boosted the market trading tone and undermined the safe-haven assets. Besides, the reason for the upbeat market sentiment could also be associated with the hints of further money flow from the U.S. and Europe. As per the U.S. House Speaker Nancy Pelosi, the COVID-19 aid package deal is possible. 

Looking ahead, the market traders will keep their focus on headlines concerning Brexit, pandemic, and the U.S. Presidential Election, which may offer important clues. It’s worth mentioning that the 1st-round of the U.S. President Election debate is expected to use American President Donald Trump’s tax payments as a fresh obstacle, which may push the U.S. dollar down.

Daily Technical Levels

Support Resistance

105.22      105.56

105.04      105.72

104.88      105.90

Pivot point: 105.38

  

USD/JPY – Trading Tips

On Tuesday, the technical side of the safe-haven pair USD/JPY continues to be steady as it’s consolidating with a bullish bias to trade at 105.460 level, and the series for EMA is now extending at 105.750 level. On the lower side, the support holds at 105.300 level. The MACD also supports the bullish bias amid a stronger U.S. dollar and diminished safe-haven appeal. A bullish crossover of the 105.750 is likely to lead the USD/JPY price towards the next resistance level of 106.250. As we can see, the 50 periods EMA is also in support of buying; therefore, we should look for buying trades in the USD/JPY pair. However, bearish trend continuation and violation of the 105.300 level can open further room for selling until 104.900. Good luck! 

 

Categories
Forex Market Analysis

Daily F.X. Analysis, September 28 – Top Trade Setups In Forex – ECB President Lagarde Speaks

The Asian session has exhibited thin trading volume and volatility amid Chinese banks will be closed in observance of the Mid-Autumn Festival. However, the eyes will remain on the ECB President Lagarde Speak later during the European session.

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.16299 after placing a high of 1.16848 and a low of 1.16120. Overall the movement of the EUR/USD pair remained bearish throughout the day. The pair dropped to its 2-months lowest level below 1.16200 level on Friday as the risk-sentiment was dropped in the market, and the U.S. dollar gained renewed strength. The strength of the greenback was the main driver of the EUR/USD pair on Friday.

The greenback posted the biggest weekly gain on Friday since March and rose to 2-months high level after the safe-haven momentum rose amid the weak economic data. The safe-haven appeal was also supported by the ongoing worries about the economic fallout from a delayed U.S. stimulus measure.

On Friday, the U.S. Dollar Index rose to its 2-months highest level above 96.6 level and weighed heavily on the EUR/USD pair. The M3 Money Supply from the E.U. dropped to 9.5% from the projected 10.0% at 13:00 GMT on the data front. Private Loans from the European Union remained flat with expectations of 3.0%. The depressing data from the E.U. added further losses in the EUR/USD pair.

From the U.S. side, the Core Durable Goods Orders in August dropped to 0.4% against the projected 1.0%, and the Durable Goods Orders also declined to 0.4% from the anticipated 1.1% and weighed on the greenback. The declining goods orders raised concerns for the economic recovery and raised the safe-haven appeal that ultimately supported the greenback. The strong U.S. dollar added further in the downward momentum of the EUR/USD pair. On the coronavirus front, the second wave of the pandemic in Europe was hitting the European countries hard as the number of coronavirus infections increased day by day. The daily count of infected people rose to an all-time high in France and the U.K. on Thursday. 

France recorded 16,096 new cases in a single day, and the U.K. reported 6634 cases in 24 hours. Meanwhile, other countries also saw the highest number of infected cases since the pandemic started earlier this year. 

The European Union health commissioner said that coronavirus’s situation was even worse in some member states than during the peak in March, and this weighed heavily on the local currency Euro. The declining Euro currency supported the downward momentum of the EUR/USD pair on Friday.

The rising safe-haven market sentiment kept the EUR/USD pair under heavy pressure due to its riskier nature. The U.S. dollar regained its safe-haven status and was further supported by the uncertainty in the market related to the rising number of coronavirus cases and the rising tensions between the U.S. & China that could also lead to a new cold war. The strength of the greenback kept the pair EUR/USD under pressure throughout the whole week.

Daily Technical Levels

Support Resistance

1.1636       1.1698

1.1600       1.1724

1.1573       1.1760

Pivot point: 1.1662

EUR/USD– Trading Tip

The bearish bias of the EUR/USD continues to dominate the market as it’s providing selling bias at 1.1650. Staying below 1.1650 level can extend the selling trend until 1.1590 level while resistance stays at the 1.1680 level today. A bullish breakout of the 1.1686 level can drive the buying trend until the 1.1760 level. Mixed bias prevails in the market today. The ECB President Lagarde Speech will remain in highlights today.


GBP/USD – Daily Analysis

The GBP/USD currency pair extended its early-day bullish bias and took some further bids around well above the mid-1.2750 level despite the U.K. preparing to impose a total social lockdown across much of Northern Britain and potentially London. However, the reason for the bullish trend in the currency pair could be associated with the bearish sentiment surrounding the broad-based U.S. dollar ahead of the U.S. presidential debate on Tuesday and the release of U.S. economic data. 

Adding to the U.S. dollar’s problem could also be the market risk-on sentiment, which tends to undermine the safe-haven U.S. dollar and contributed to the currency pair gains. Apart from this, the bullish tone around the currency pair was further bolstered by the latest positive report suggesting brighter odds of success for the key Brexit talks. On the contrary, the latest fears of strict lockdown conditions in the U.K. hampering global economic growth seem to challenge the currency pair bulls and become the key factor that kept the lid on any additional currency gains pair. At this particular time, the GBP/USD currency pair is currently trading at 1.2776 and consolidating in the range between 1.2752 – 1.2778. Moving on, the currency pair traders seem cautious to place any strong position ahead of the U.S. presidential debate on Tuesday and the release of U.S. economic data later in the week.

The market trading sentiment rather unaffected by the fears of rising COVID-19 cases in the UK, Spain, and some of the notable Asian nations like India, which keeps fueling worries that the economic recovery could be halt. However, the market trading sentiment has been reporting gains since the Asian session started, possibly due to the latest headlines suggesting a strong immune response to the coronavirus vaccine with a single dose in the early trial stages. Besides this, the market sentiment was further bolstered by the hopes of the U.S. stimulus to combat the coronavirus (COVID-19). Apart from this, the Brexit optimism also exerted a positive impact on market sentiment. 

This, in turn, the broad-based U.S. dollar failed to gain any positive traction and edged lower on the day ahead of the U.S. presidential debate on Tuesday and the release of U.S. economic data later in the week. Besides, the upbeat market sentiment also keeps the USD bulls on the defensive. However, the losses in that U.S. dollar kept the GBP/USD currency pair higher. Whereas, the U.S. Dollar Index that tracks the greenback against a bucket of other currencies edged down by 0.04% to 94.588 by 10 PM ET (2 AM GMT). 

At home, the Confederation of British Industry (CBI) head Carolyn Fairbairn showed some readiness about the Brexit trade deal ahead of the 9th-phase of talks starting from Tuesday. Also on the positive side is the Internal Market Bill (IMB) has ripped off the latest round of Brexit talks. This, in turn, underpinned the British Pound and extended some support to the currency pair. 

On the contrary, the Irish leader Taoiseach Micheál Martin’s latest statement that the U.K. headed for no-deal Brexit eventually fueled the worries of losing a trade deal and becoming the key factor that cap further gains in the currency pair. It is worth reporting that the cost of losing a trade deal is estimated as near 1.0 million British jobs, as per the Financial Times. Meanwhile, the further burden on the economy that is yet to overcome the COVID-19 woes seems to push the BOE policymakers to defend the negative rate policies.

Across the ocean, the U.K. policymakers are ready to a strict ban on socializing due to the recent surge in the coronavirus (COVID-19) cases, which also keeps challenging the currency pair upside momentum. The re[orts also revealed that the new lockdown measures put forward a complete closure for all pubs, restaurants, and bars for two weeks initially. Looking ahead, the market traders will keep their eyes on headlines concerning Brexit, pandemic, and U.S. Presidential Election, which may offer important clues. Meanwhile, the USD price dynamics will be key to watch. 

Daily Technical Levels

Support Resistance

1.2698       1.2791

1.2647       1.2833

1.2605       1.2884

Pivot point: 1.2740

GBP/USD– Trading Tip

The cable is consolidating in a sideways trading range of 1.2770 to 1.2725 level, as it has formed an ascending triangle pattern on the hourly timeframe. A bullish breakout of 1.2770 level can lead the Sterling price towards 1.2819 level on the higher side. Bullish bias will be more substantial over the 1.2770 level and bearish below the same level today.

 


USD/JPY – Daily Analysis

The USD/JPY currency pair extended it’s early-day losing momentum and picked up further offers around 105.30 level mainly due to the broadly weaker U.S. dollar. That was triggered by traders’ cautious mood ahead of Tuesday’s U.S. presidential election debate between President Donald Trump and Democratic candidate Joe Biden. Apart from this, the upticks in the U.S. stock futures, which refer to market risk-on sentiment, also undermined the safe-haven U.S. dollar. This, in turn, kept the currency pair under pressure. The reason for the currency pair losses could be associated with the stronger Japanese yen across the pond. Despite the upbeat tone in the Japanese stocks, the Japanese yen remains in demand across the board, which keeps the currency pair down. 

On the contrary, the upbeat market mood, backed by the recently positive coronavirus (COVID-19) vaccine news and stimulus hopes, tends to undermine the safe-haven Japanese yen, which might help the currency pair to limit its deeper losses. Meanwhile, the latest Japanese Chief Cabinet Secretary Kato’s latest report that the government will not hesitate to deploy additional economic measures could also be considered one of the key factors that kept the lid on any additional losses in the currency pair. 

Despite the rise in the COVID-19 cases, coupled with the expected return of lockdown conditions in major economies, the market trading sentiment started to flash green during the Monday’s Asian session amid hopes of the American stimulus, which keeps the broad-based U.S. dollar under pressure. Moreover, the cautious mood of traders ahead of Tuesday’s U.S. presidential election debate between President Donald Trump and Democratic candidate Joe Biden also kept the U.S. dollar bulls on the defensive. 

The broad-based U.S. dollar failed to keep its early-day gains and edged lower before the European trading hours due to the risk-on market sentiment. Moreover, the U.S. dollar losses could also be associated with lingering doubts about the U.S. economic recovery ahead of plenty of economic data and political developments in the United States. 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 greenback against a bucket of other currencies edged down by 0.04% to 94.588 by 10 PM ET (2 AM GMT). 

However, the market trading sentiment was supported by the hopes of the U.S. stimulus to combat the coronavirus (COVID-19). As per the latest report, the U.S. House Speaker Nancy Pelosi thinks that the COVID-19 aid package deal is possible while considering the Democratic preparation for a new package. Besides this, the New York Times alleged U.S. President Donald Trump over income tax returns of $750 for 2016 and 2017, which initially left the negative impact on the government. Afterward, the Democratic leader proved it as “fake news” while showing strong belief to have tremendous victory in the election. 

Across the pond, the reason for the upbeat market mood could also be associated with the latest reports suggesting that the Confederation of British Industry (CBI) head Carolyn Fairbairn is confident about the Brexit trade deal ahead of the 9th-round of discussions, which is scheduled to start from Tuesday.  

As in result, the S&P 500 Futures keeps its Friday’s upbeat performance of Wall Street while rising 0.36% to 3,298 as of writing. Although, the risk barometer seems to await clearer signals to extend the latest recovery.

At home, the new Japanese Chief Cabinet Secretary Kato told that the government would not hesitate to deploy additional economic measures if needed. This, in turn, undermined the Japanese yen currency and helped the currency pair limit its deeper losses. Looking ahead, the market traders will keep their eyes on headlines concerning Brexit, pandemic, and U.S. Presidential Election, which may offer important clues. Meanwhile, the USD price dynamics will be key to watch. 

Daily Technical Levels

Support Resistance

105.22       105.56

105.04       105.72

104.88       105.90

Pivot point: 105.38

  

USD/JPY – Trading Tips

The USD/JPY is consolidating with a bullish bias to trade at 105.460 level, and the series for EMA is now extending at 105.550 level. On the lower side, the support holds at 104.840 level. The MACD also supports the bullish bias amid a stronger U.S. dollar and diminished safe-haven appeal. A Bullish crossover of the 105.550 level may drive more buying until 106.258. The idea is to stay bearish below 105.470 today. Good luck! 

 

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Forex Market Analysis

Daily F.X. Analysis, September 25 – Top Trade Setups In Forex – U.S. Durable Goods Orders in Highlights! 

On the news front, the eyes will remain on the U.S. fundamentals, especially the Durable Goods Orders m/m and Core Durable Goods Orders m/m, which are expected to report negative data and drive selling bias for the U.S. .dollar.

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.6680 after placing a high of 1.16867 and a low of 1.16263. Overall the movement of the EUR/USD pair remained bullish throughout the day. After declining for four consecutive days, the EUR/USD currency pair fell to its lowest level in two months in an earlier trading session but reversed its direction in the late American session rose on Thursday.

During the first half of the day, the EUR/USD pair was continuously weighed by the broad-based U.S. dollar strength amid the lack of significant macroeconomic data from the Eurozone. The DXY that measures the greenback’s performance against its rival currencies rose to its highest level since late July at 94.59. However, the U.S. dollar gains were deteriorated by the decisive rebound in Wall Street’s main indexes. The S&P 500 Index was up by 1.23% on Thursday, and the DXY was also starting to decline near 94.30 level. This provided strength to the risk sentiment that ultimately pushed the EUR/USD pair to reverse its direction.

On the data front, at 13:00 GMT, the German IFO Business Climate dropped to 93.4 from the anticipated 93.9 and weighed on single currency Euro. At 17:57 GMT, the Belgian NBB Business Climate came in as -10.8 against the forecasted -11.0. From the U.S. side, the Unemployment Claims last week surged to 870K against the forecasted 845K and weighed on the U.S. dollar. The weak U.S. dollar added strength in EUR/USD pair on Thursday.

The rise in EUR/USD pair’s prices on Thursday could also be attributed to the chief economist’s positive comments for the Eurozone and Global Head of Macroeconomics, Carsten Brezesk. He said that the German economy has already entered the next recovery stage after the strong rebound in the third quarter. This was related to the German IFO Business Climate survey’s relatively strong release on Thursday that advanced in September to 93.4 from the previous 92.6. However, the single currency remained under pressure due to the high uncertainty faced by the largest Eurozone’s economy as the COVID-19 rate continued to increase across Europe.

On Thursday, both France and the United Kingdom counted record-breaking daily cases of COVID-19, with the U.K. reporting 6634 new COVD-19 cases on a single day. It was the highest number recorded by the country even before the nationwide lockdown. The rising number of infections across Europe and countries adopting new restrictive measures to control the spread and damage by coronavirus kept weighing the EUR/USD prices on Thursday.

Daily Technical Levels

Support Resistance

Support     Resistance

1.1636       1.1698

1.1600       1.1724

1.1573       1.1760

Pivot point: 1.1662

EUR/USD– Trading Tip

The bearish bias of the EUR/USD continues to dominate the market as it’s providing selling bias at 1.1650. The bearish breakout of the 1.1650 level can extend the selling trend until the 1.1590 level, while resistance stays at the 1.1680 level today. A bullish breakout of the 1.1686 level can drive the buying trend until the 1.1760 level. Mixed bias prevails in the market today.


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.27434 after placing a high of 1.27808 and a low of 1.26902. Overall the movement of the GBP/USD pair remained bullish throughout the day. After posting losses for three consecutive days and remaining flat for a day, the GBP/USD pair finally rebounded on the upside on Thursday amid the U.S. dollar weakness and fresh actions by the U.K. government to lessen the impact of the second wave of coronavirus in the country.

The British Pound rebounded against the U.S. dollar on Thursday after the U.K. government revealed fresh measures to protect businesses and jobs. This helped decrease the ongoing fear about the economic fallout by the newly imposed restrictions on the economy. To contain the virus, the U.K. government made a law that prohibits gathering more than six people. Furthermore, the bars and pubs in the U.K. were ordered to close by 10 PM, and movie theatres and parks were closed again. However, on Thursday, the UK Chancellor Rishi Sunak attempted to ease the pandemic’s economic fallout.

According to the Tory government’s new plans, from November, the U.K. will subsidize the pay of employees who have not returned to work full time but are working at least a third of their usual hours. This came in as the furlough scheme’s expiry date at the end of October was near, and the U.K. businesses had been calling on the government to renew the support. The calls for new support increased after the fears emerged in the market that the second wave could improve the job losses.

On Thursday, the U.K. reported a record-high number of coronavirus cases in a single day with a count of 6634 cases. It was the highest single-day count even before the lockdowns. This pushed the need for new measures from the government that was also welcomed by the Bank of England’s Governor Andrew Bailey. However, the BoE governor, Andrew Bailey, was less optimistic about the economy when he said that the fast recovery pattern over the summer would not continue in the same way. The British Pound that was surged against the dollar on the back of new measures might not live for long as the uncertainty around the Brexit talks between the E.U. & the U.K. remains on the card.

The latest Brexit update shows that the E.U. has threatened to take legal actions against the U.K. over its plans to go ahead with the so-called internal market bill that would undermine some parts of the withdrawal agreement the Northern Ireland issue. The E.U. has given a deadline of the end of September to the U.K. to scrap the bill. Meanwhile, Michel Barnier, a top E.U. negotiator, has also said that despite the U.K.’s wrong intentions to halt the withdrawal agreement, the Brexit deal was still possible, but this time E.U. will remain firm and realistic in negotiations. This also kept supporting the GBP/USD gains on Thursday.

Meanwhile, on the data front, at 15:00 GMT, the CBI Realized Sales rose to 11 from the projected -10 and supported British Pound that added gains in GBP/USD pair on Thursday. On the USD front, the rise in unemployment claims during last week to 870K from the projected 845K weighed on the U.S. dollar pushed GBP/USD pair even higher.

 Daily Technical Levels

Support    Resistance

1.2698        1.2791

1.2647        1.2833

1.2605        1.2884

Pivot point: 1.2740

GBP/USD– Trading Tip

The cable is consolidating in a sideways trading range of 1.2770 to 1.2725 level, as it has formed an ascending triangle pattern on the hourly timeframe. A bullish breakout of 1.2770 level can lead the Sterling price towards 1.2819 level on the higher side. Bullish bias will be more substantial over the 1.2770 level and bearish below the same level today.

 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.409 after placing a high of 105.529 and a low of 105.203. After posting bullish bias for three consecutive days, the GBP/USD pair remained in a confined range on Thursday, but one way or another managed to close its day with modest gains.

The Governor of the Bank of Japan, Haruhiko Kuroda, and the Prime Minister of Japan, Yoshihide Suga, met on Wednesday met for the first time since the prime minister took office last week. After the meeting, Kuroda said that there was no change in the Bank of Japan’s stance that former PM Shinzo Abe set that pledged monetary easing in pursuit of a 2% inflation target. Furthermore, Kuroda said that the deadline for aid to pandemic hit firms might extend, and this weighed on the Japanese Yen that ultimately supported the USD/JPY pair’s upward momentum.

On the other hand, the persistent uncertainty over the U.S. stimulus and resurging coronavirus cases worldwide resumed the downfall momentum in Wall Street Indexes and provided support to the safe-haven greenback that added in the upward trend of USD/JPY.

In an early trading session on Thursday, the Bank of Japan published its Minutes from its latest meeting and showed that policymakers were willing to act as needed to counter the pandemic’s effects on the economy. However, the USD/JPY pair’s gains were limited by the increased number of jobless Americans who filed for Unemployment claim benefits during the last week. The actual number came in as 870K against the forecasted 845K and weighed on the U.S. dollar.

Furthermore, the Federal Reserve Chairman Jerome Powell and U.S. Treasury Secretary Steven Mnuchin testified before the Senate Banking Committee on Thursday. Both were gathered to discuss their agencies’ role in controlling the losses caused by the coronavirus crisis.

Powell said that the fears of slow economic growth have increased after the failure of the U.S. Congress to pass additional relief funds. Whereas, Mnuchin forced Congress to quickly pass the targeted relief fund by focusing on both parties’ needs and continuing the negotiations after that. The U.S. Dollar Index (DXY) rose to a two-month highest level, and this continued supporting the USD/JPY pair.

Daily Technical Levels

Support    Resistance

105.22        105.56

105.04        105.72

104.88        105.90

Pivot point: 105.38

  

USD/JPY – Trading Tips

On Friday, the USD/JPY is consolidating with a bullish bias to trade at 105.460 level, and the series for EMA is now extending at 105.550 level. On the lower side, the support holds at 104.840 level. The MACD is also in support of bullish bias amid a stronger U.S. dollar and reduced safe-haven appeal. Bullish crossover of 105.550 level may drive more buying until 106.258. The idea is to stay bearish below the 105.470 level today. Let’s wait for Jobless Claims from the U.S. to determine further trends. Good luck! 

 

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Forex Market Analysis

Daily F.X. Analysis, September 24 – Top Trade Setups In Forex – U.S. Jobless Claims in Focus! 

The economic calendar is again busy with Federal Reserve events such as today, the Fed Chair Powell Testifies. Jerome Powell is expected to testify on the CARES Act before the House Financial Services Committee in Washington DC. Besides this, the eyes will be on the Existing Home Sales from the United States. Overall, the market is likely to exhibit corrections today.

Economic Events to Watch Today  

 

 


AUD/USD – Daily Analysis

The AUD/USD failed to stop its previous losing streak and dropped to a 2-months low around below the mid-0.7000 level mainly due to the risk-off market sentiment, triggered by the renewed concern about the second wave of coronavirus infections, which continued weighing on investors sentiment and undermined the perceived riskier Australian dollar. The broad-based U.S. dollar strength, supported by the combination of factors, also dragged the currency down across the ocean. At the moment, the AUD/USD is currently trading at 0.7033 and consolidating in the range between 0.7029 – 0.7083. 

The traders seem cautious to place any strong position ahead of the testimony by the Fed Chair Jerome Powell and Treasury Secretary Steven Mnuchin, which will influence the USD price dynamics and provide some fresh direction to the currency pair.

Worries that the coronavirus pandemic’s resurgence could ruin the global economic recovery keeps the market trading sentiment under pressure and weakened the perceived riskier Australian dollar. As per the latest report, the coronavirus COVID-19 cases continue to climb in Europe, U.K., and the U.S. Whereas, some E.U. countries are now facing the starting of the second wave coinciding with the onset of the flu season. That was witnessed after the World Health Organization’s regional director for Europe said that “We have a dire situation unfolding before us,” H further added that Europe’s number of weekly infections was higher now than at the first peak in March. 

At the US-China front, the long-lasting tussle between the United States and China remains on the play as State Mike Pompeo took help from France, Germany, and the U.K. to reject China’s claims of the South China Sea at the United Nations (U.N.). This also exerted downside pressure on the market trading sentiment and contributed to the currency pair losses. 

As a result, the broad-based U.S. dollar succeeded in extending its previous session gains and remained well bid on the day as investors turned to the safe-haven in the wake risk-off market sentiment. However, the U.S. dollar gains could be short-lived or temporary due to the worries that the U.S.’s economic recovery could be stopped because of the reappearance of coronavirus cases. Besides this, the gains in the U.S. dollar was further boosted after the hawkish comments by Chicago Fed President Charles Evans, that further quantitative easing may not provide additional support to the U.S. economy. However, the gains in the U.S. dollar kept the currency pair under pressure. Whereas, the dollar index, which pits the dollar against a bucket of 6-major currencies, stood at 94.336 on the day, close to a nine-week high.

Moving Ahead, the traders will keep their eyes on the U.S. economic docket, which will show the release of Initial Weekly Jobless Claims and New Home Sales data. Apart from this, the U.S. Federal Reserve (Fed) Chair Jerome Powell’s testimony will also be closely observed. Across the ocean, the market risk sentiment and developments surrounding the coronavirus will not lose their importance. 

Daily Technical Levels

 Support      Resistance  

0.7035       0.7147  

 0.6996      0.7218  

 0.6924      0.7258  

  Pivot Point: 0.7107  

  

AUD/USD– Trading Tip

The stronger U.S. dollar has also driven sharp selling in the AUD/USD pair as it trades at 0.7042 level today. The AUD/USD pair has formed three black crows patterns on a daily timeframe, suggesting odds of selling bias in the AUD/USD. However, the AUD/USD has closed a Doji candle at 0.7042 level, and we may see some bullish correction over the 0.7001 support level until the next resistance level of 0.7098 and 0.7152 level. 


USD/CAD– Daily Analysis

The USD/CAD currency pair extended its previous session bullish bias and kept gaining positive traction around above 1.3400 level, mainly due to the broad-based U.S. dollar strength. The bullish tone around the U.S. dollar was sponsored by the concerns over rising COVID-19 cases and fears of renewed lockdown measures, which kept the market trading sentiment under pressure and supported the greenback’s status as the global reserve currency. 

On the flip side, the currency pair bullish bias could also be attributed to the weaker crude oil prices, which undermined the demand for the loonie, a commodity-linked currency, and contributed to the pair gains. Currently, the USD/CAD pair is trading at 1.3396 and consolidating in the range between 1.3370 – 1.3412.

As we already mentioned that the equity market had been flashing red since the Asian session started. The reason could be associated with the major negative catalysts. Be it the concerns about the second wave of coronavirus diseases or the fears of renewed lockdown measures, not to forget the long-lasting US-China tussle, all these factors weigh on the market trading sentiment and helping the U.S. dollar to put the safe-have bids. Apart from this, the slowdown in Europe, alongside concerns expressed by U.S. Federal Reserve officials over the U.S. economy, pushed the equity market down. 

The broad-based U.S. dollar keeps its gaining streak and still reporting gains on the day amid market risk-off sentiment. However, the U.S. dollar gains could be short-lived or temporary as worries that the U.S.’s economic recovery could be stopped amid the resurgence of the second wave of coronavirus cases. Besides this, the U.S. dollar gains were further boosted by the hawkish comments by Chicago Fed President Charles Evans, suggesting that further quantitative easing may not provide additional support to the U.S. economy. However, the gains in the U.S. dollar kept the currency pair higher. Whereas, the dollar index, which pits the dollar against a bucket of 6-major currencies, stood at 94.336 on the day, close to a nine-week high.

Across the pond, the crude oil prices failed to stop its previous session, losing streak and remained pressed around below the mid-$39.00 marks. Besides, the possibilities of Libya resuming oil exports added further bearish pressures around the crude oil prices. Thus, the declines in crude oil prices undermined demand for the commodity-linked currency the loonie and contributed to the currency pair gains. 

Looking forward, the traders will keep their eyes on the U.S. Federal Reserve (Fed) Chair Jerome Powell’s testimony. Furthermore, the U.S. Jobless Claims and Housing data will also be key to watch. Whereas, the updates concerning the US-China relations and the U.S. stimulus package will not lose their importance.

 Daily Technical Levels

Support      Resistance

  1.3323      1.3418  

  1.3260      1.3450  

  1.3228      1.3513  

  Pivot Point: 1.3355  

  

USD/CAD– Trading Tip

The USD/CAD is trading with a bullish bias at 1.3402 level, having violated the ascending triangle pattern at 1.349 level, and now it’s heading further higher until the next resistance level of 1.3460. The MACD and three white soldiers pattern is suggesting chances of bullish bias in the pair. In contrast, the pair has also crossed over 50 periods EMA at 1.3254 level. Today we should consider taking a buying trade over 1.3349 level to target the 1.3462 level. 

 


USD/JPY – Daily Analysis

The USD/JPY pair was closed at 105.362 after placing a high of 105.494 and a low of 104.847. The pair USD/JPY extended its gains on Wednesday for the third consecutive day and peaked six previous days. The rising USD/JPY prices were due to the strong rebound of the U.S. dollar’s safe-haven status and upbeat market data.

On Wednesday, the U.S. dollar was strong due to Fed officials’ more hawkish comments that raised the U.S. dollar and helped it regain its safe-haven status. The strong bullish momentum in the USD/JPY pair was also supported by Japan’s weak PMI data on Wednesday.

At 05:30 GMT, the Flash manufacturing PMI from Japan for the month of September declined to 47.3 against the projected 48.0 and weighed on the Japanese Yen. The figures showed that Japan’s manufacturing sector viewed contraction in September that was negative for local currency but positive for the USD/JPY pair. At 09:30 GMT, All Industrial Activity in September remained flat at 1.3% from Japan.

On the U.S. front, the Housing Price Index for July advanced to 1.0% against the expectations of 0.4% and supported the U.S. dollar that helped the gains of USD?JPY pair on Wednesday. At 18:45 GMT, the highly awaited Flash Manufacturing PMI also rose to 53.5 against the anticipated 52.5 and supported the greenback that added further gains in the USD/JPY pair. However, the Flash Services PMMI remained flat with a projection of 54.5.

Meanwhile, the President of the Federal Reserve Bank of Cleveland, Loretta Mester, said on Wednesday that the U.S. economy had rebounded significantly from the losses caused by the pandemic induced lockdowns. However, she also said that the recovery was still narrow and was not sustainable. The Fed Vice Chair Randal K. Quarles said that the coronavirus event was an enormous economic shock in the first half of 2020. He also said that the recovery was underway, but a full recovery was far off as the risks remain on the downside.

Apart from this, the Fed Chair Jerome Powell, in his testimony, faced many questions regarding the next round of stimulus package. He replied that the difference between Democrats & Republicans over the package’s size remains and caused a delay. Powell also urged more spending to help the economy recover from the pandemic crisis. All these developments raised the U.S. dollar prices due to its safe-haven status and boosted the USD/JPY pair.

Moreover, the tensions between the U.S. and China also escalated after U.S. President Donald Trump blamed China and called for holding it accountable for the global spread of coronavirus. In response to this, Chinese President XI Jinping accused Trump of lying and insulting the platform of the U.N. He also said that he had no intension of having a cold war with any country. These harsh comments from both sides also raised uncertainty and helped the U.S. dollar to gain traction due to safe-haven nature and post gains in the USD/JPY pair on Wednesday.

Daily Technical Levels

Support      Resistance

  105.0000      105.6100  

  104.6400      105.8600  

  104.3900      106.2100  

  Pivot Point: 105.2500  

  

USD/JPY – Trading Tips

The USD/JPY is trading with a bullish bias to trade at 105.460 level, and the series for EMA are now extending at 105.550 level. On the lower side, the support stays at 104.840 level. The MACD is also in support of bullish bias amid a stronger U.S. dollar and reduced safe-haven appeal. Bullish crossover of 105.550 level may drive more buying until 106.258. The idea is to stay bearish below the 105.470 level today. Let’s wait for Jobless Claims from the U.S. to determine further trends. Good luck! 

 

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Forex Market Analysis

Daily F.X. Analysis, September 22 – Top Trade Setups In Forex – Fed Chair Powell Testifies!

The economic calendar is again busy with Federal Reserve events such as today, the Fed Chair Powell Testifies. Jerome Powell is expected to testify on the CARES Act before the House Financial Services Committee in Washington DC. Besides this, the eyes will be on the Existing Home Sales from the United States. Overall, the market is likely to exhibit corrections today.

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

The EUR/USD pair was closed at 1.7713 after placing a high of 1.18715 and a low of 1.17315. Overall the movement of the EUR/USD pair remained bearish throughout the day. The EUR/USD pair slumped on Monday amid the reclaimed safe-haven status by the U.S. dollar and the re-imposed lockdown measures to curb the spread on the virus in Europe.

The U.S. Dollar Index was up by 0.8% to 93.69 level on Monday, its highest level since August 13. This supported the greenback on its way to reclaiming its safe-haven status and pulled the EUR/USD pair on the downside.

According to the European health minister, the second wave of coronavirus in France, Austria, and the Netherlands could spike and affect the European countries and hold threats that Germany could also see infection spikes. 

The U.K. is also reporting new coronavirus cases and the Britain Chief Scientific adviser, Patrick Vallance, said that there could be 50,000 new infections every day by mid-October if the virus continues at its current rate. The rising number of coronavirus cases from Europe weighed on prices of EUR/USD pair on Monday.

Furthermore, the European Central Bank President Christine Lagarde said that Europe’s economic rebound was uncertain and uneven, and it required a careful assessment of incoming data, including the evolution of the coronavirus pandemic. On Monday, Lagarde said that the recovery strength was dependent on the future evolution of the pandemic and containment policies’ success. These remarks came in as the economists expect the ECB to expand its emergency 1.35T euros bond-buying program this year to revive inflation.

Germany’s Bundesbank also said that it expected the recovery in Europe’s largest economy to continue at a slower pace during the rest of the year. These concerning comments raised caution and stressed the local currency that ended up weighing on EUR/USD pair prices on Monday.

Meanwhile, the risk sentiment further deteriorated after the US-China tensions continue to expand along with the delayed U.S. stimulus measure that raised the safe-haven appeal. The U.S. dollar regained its safe-haven status and was up by 0.8% on Monday. This strong U.S. dollar added further pressure on EUR/USD prices.

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 1.1768 level today. The pair gains support over a double bottom pattern of 1.1736, and a bullish crossover of 1.1773 level may extend the buying trend until 1.1797 level. Bullish bias can remain strong today as most of the traders may do profit-taking in the EUR/USD pair. Let’s stay bullish over the 1.1728 level and bearish below the same level today.


GBP/USD – Daily Analysis

Today in the Asian trading hours, the GBP/USD pair was closed at 1.28156 after placing a high of 1.29664 and a low of 1.27751. Overall the movement of the GBP/USD pair remained bearish throughout the day. The GBP/USD pair extended its previous day’s losses on Monday and fell to its 5-days lowest level amid the broad-based U.S. dollar strength and rising number of coronavirus cases in the U.K., along with Brexit worries.

The rising signals drove the downward momentum in the Pound to U.S. dollar exchange rate that the U.K. government could send Britain into another lockdown. The rising concerns over Britain’s economy and the stalled Brexit process further weighed on the Sterling that dragged the GBP/USD prices on Monday.

The top science adviser of the U.K., Sir Patrick Vallance, said on Monday that U.K.’s coronavirus numbers could reach new 50,000 cases per day by mid-October. His warning was based on current trends that showed that the pandemic was doubling every seven days.

Valance said that 50,000 figure was a warning and not a prediction. In response to his warning, the fears that the U.K.’s economy could see another round of lockdown measures to control the spread of coronavirus raised and weighed on local currency. The weak British Pound added further pressure on the declining GBP/USD prices on Monday.

On the Brexit front, the former Prime Minister of the UK, Theresa May, said that she could not support the government’s plan to override parts of its Brexit agreement with the European Union. She said that moving ahead with this law would break international law and damage the United Kingdom’s trust. On Tuesday, the internal market bill will be voted on in the Commons as it had already passed the first hurdle last week. Ministers have said that the bill contains vital safeguards to protect Northern Ireland and the rest of the U.K. 

In simple terms, the bill is designed to enable goods and services to flow freely across England, Scotland, Wales, and Northern Ireland after Brexit on January 1 when U.L. will leave the E.U.’s single market customs union. However, this bill gives the government the power to change the aspects of the E.U. withdrawal agreement that was signed between both nations earlier this year. Theresa May has spoken against this bill, and the markets have started selling British Pound that ultimately led to a declining GBP/USD pair.

On the data front, the Rightmove Housing Price Index in September rose to 0.2% against the previous -0.2% and supported GBP. On the other hand, the greenback was strong across the board as it regained its safe-haven status amid the increasing concerns over the U.S. stimulus measure. The strength of the U.S. dollar added further pressure on GBP/USD pair on Monday.

 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 1.2784 support level, having violated the upward channel on the hourly chart. The triple bottom level of 1.2780 is likely to keep the GBP/USD pair supported, and violation of this may lead the Cable towards 1.2727 level. On the higher side, the GBP/USD may drive upward movement until the 1.2840 level. The 50 periods EMA are likely to extend selling until 1.2727 level. The MACD is currently moving into the bullish zone; however, it can be merely for correction. Let’s consider taking a sell trade below 1.2780 level today. 

 


USD/JPY – Daily Analysis

The USD/JPY currency pair failed to extend its early-day recovery moves and dropped to a 104.47 level while representing 0.11% losses on the day. However, the currency pair losing streak could be attributed to the downbeat market sentiment, which tends to underpin the safe-haven Japanese yen and contributed to the currency pair declines. Hence, the market trading sentiment was being pressured by the negative comments from the Federal Reserve members. 

Apart from this, the recent resurgence in the pandemic, mainly in Europe and the U.K., also weighing on the market risk tone. Across the pond, the broad-based U.S. dollar weakness, triggered by the multiple factors, could also be considered as a key factor that dragged the currency pair lower. Currently, the USD/JPY currency pair is currently trading at 104.53 and consolidating in the range between 104.47 – 104.75.

However, the market risk tone extended its previous 5-consecutive day selling bias as fears of the coronavirus (COVID-19) resurgence disturbed the global markets. In the meantime, the Federal Reserve members’ downbeat comments also exerted pressure on the global traders. It is worth mentioning that the Fed Chair Jerome Powell said that the economic recovery track remains “highly uncertainty.” Moreover, the Federal Reserve Bank of St. Louis President James Bullard, also delivered a dovish tone while stating that the Fed will be much less pre-emptive about increasing rates.

On the flip side, the renewed tussle between the U.S. and China and Trump’s latest warnings to the firms helping Iran build arms also exerted downside pressure on the market risk-tone. The tension further boosted after the U.S. Secretary of State Mike Pompeo took help from France, Germany, and the U.K. to reject China’s South China Sea claims at the United Nations (U.N.). This, in turn, underpinned the safe-haven Japanese yen and dragged the currency pair lower.

At the coronavirus front, the recent hike in the virus cases, mainly in Europe and the U.K., probes the buyers. 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. Meanwhile, the U.K. is also preparing to slap new restrictions, which keeps the market trading ton sluggish and contributed to the currency pair losses.

Across the ocean, the decision-makers from the European Central Bank (ECB) and the Reserve Bank of Australia (RBA) also cited their worries in the latest appearances, which also probe the bulls. This was evident from a bearish sentiment around the equity markets, which underpinned the safe-haven Japanese yen and contributed to the USD/JPY pair’s downfall.

Despite the risk-off market sentiment, the broad-based U.S. dollar failed to gain any positive traction and edged lower on the day amid worries over the U.S. Congress’ stimulus impasse. Furthermore, the concerns about the ever-increasing number of coronavirus cases faded the optimism over the V-shape recovery, which also kept the U.S. dollar under pressure. 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 to 93.623.

Looking forward, the traders will keep their eyes on the continuous drama surrounding the US-China relations and updates about the U.S. stimulus package. Given the holiday in Japan, due to the Autumnal Equinox Day, coupled with an absence of major data/events, the USD moves and coronavirus headline 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 104.800 level. 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 Testifies as it may drive further market trends. 

Good luck! 

 

Categories
Forex Market Analysis

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

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

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

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

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

 Daily Technical Levels

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


GBP/USD– Trading Tip

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

 

USD/JPY – Daily Analysis

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

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

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

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

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

Daily Technical Levels

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

USD/JPY – Trading Tips

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

Good luck! 

 

 

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Forex Market Analysis

Daily F.X. Analysis, September 17 – Top Trade Setups In Forex – Brace for BOE Policy! 

On the news front, the eyes will remain on the U.K. Monetary Policy reports due during the late European hours. BOE isn’t expected to change the rates, and it may keep them at 0.10%; however, it will be important to see MPC Official Bank Rate Votes. Besides, the European Final CPI data will remain in focus today. During the U.S. session, the Unemployment Claims and Philly Fed Manufacturing Index will be the main highlight to drive further market movement.

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

The EUR/USD closed at 1.18161 after placing a high of 1.18824 and a low of 1.17873. The EUR/USD pair continued following its previous day bearish trend on Wednesday ahead of the FOMC meeting. The pair posted losses on the day despite upbeat macroeconomic data from Europe.

The U.S. dollar became strong in response to the Federal Reserve’s rate decision. The Fed left its monetary policy unchanged and signaled no changes to borrowing costs potentially through 2023. The growth projections by Fed pointed a return to pre-pandemic levels by the end of 2021.

The Federal Reserve Chairmen, Jerome Powell, said that the current bond-buying level was appropriate and said that more fiscal support was likely to be needed. The U.S. dollar index found support at 92.8 level and spiked to 93.15 level and weighed on EUR/USD pair.

On the data front, At 14:00 GMT, the Trade Balance from the Eurozone showed a surplus of 20.3B against the forecasted 19.3B in July and supported single currency Euro. However, the upbeat data failed to reverse the pair’s movement as the focus was all on the FOMC meeting and Fed decision.

On the U.S. front, the Core Retail Sales in August declined to 0.7% from the forecasted 1.0%, and the Retail Sales in August also dropped to 0.6% from the projected 1.2% and weighed on the U.S. dollar. Whereas, the Business Inventories in July dropped to 0.1% from the projected 0.2% and supported the U.S. dollar. The NAHB Housing Market Index advanced to 83 from the anticipated 78 and supported the U.S. dollar. The mixed macroeconomic data from the U.S. also failed to impact on EUR/USD prices on Wednesday.

As the WHO has warned that the death toll in Europe is likely to increase in October and November, the local currency has come under pressure since then. On Wednesday, the regional health authorities announced that Madrid’s Spanish capital would introduce selective lockdowns in urban areas where the coronavirus has spread widely. This also weighed on local currency and added further pressure on EUR/USD pair.

On Wednesday, the European Commission President Ursula von der Leyen came to the European Parliament in Brussels to deliver her first state of European Union Address. She announced new plans that included measures to tear down single market restrictions, a new strategy for the Schengen zone, a proposal to increase the 2030 target of emission reduction to 55%, and investment for digital technologies. 

Daily Technical Levels

Support Pivot Resistance
1.1773 1.1828 1.1869
1.1732 1.1924
1.1676 1.1966

EUR/USD– Trading Tip

The EUR/USD pair has traded sharply bearish at 1.1750 area, and now the same level is extending solid support to the pair. On the higher side, the EUR/USD may soar until 1.1780 level that marks 38.2% Fibo and 1.1810 level of 61.8% Fibonacci retracement. Conversely, the support stays at 1.1699 level today.

GBP/USD – Daily Analysis

The GBP/USD closed at 1.29666 after placing a high of 1.30070 and a low of 1.28749. Overall the movement of the GBP/USD pair remained bullish throughout the day. The pair GBP/USD extended its previous daily gains and rose above 1.3000 level on Wednesday amid dovish hopes for the FOMC meeting. The strong CPI report from the U.K. negative Retail Sales report from the U.S. also added further gains in the GBP/USD pair on Wednesday.

As investors have digested the recent developments surrounding Brexit and the internal market bill, the heavy tone surrounding the U.S. dollar also helped the GBP/USD pair to surgeon Wednesday. The heavy bearish pressure on the U.S. dollar was exerted by the release of disappointing U.S. monthly Retail Sales figures for August.

At 17:30 GMT, the Core Retail Sales dropped to 0.7% from the anticipated 1.0%, and the Retail Sales were declined to 0.6% from the projected 1.1% and weighed heavily on the U.S. dollar that helped GBP/USD pair to move on the upside. Meanwhile, from the U.K., at 11:00 GMT, the Consumer Price Index for the year rose to 0.2% from the expected 0.1% and supported the Sterling. The Core Consumer Price Index also rose to 0.9% from the expected 0.7% and supported British Pound.

Whereas the PPI Input in August was declined to -0.4% from the forecasted 0.1%, and the PPI Output also declined to 0.0% against the forecasted 0.2% and weighed on local currency. The year’s RPI declined to 0.5% from the expected 0.6% and weighed on British Pound. However, the Housing Price Index for the year rose to 3.4% from the projected 3.2% and supported British Pound that added further gains in GBP/USD pair.

On the Brexit front, the head of the European Commission said on Wednesday that the chances of reaching a trade deal with Britain were fading by the day as the British government pushes ahead with moves that would breach their withdrawal agreement.

Brussels have warned Prime Minister Boris Johnson to scrap the Internal Market Bill, or it would sink the talks on future trade arrangements before Britain finally leaves the E.U.’s orbit on December 31. However, Johnson has refused to step back from issuing an Internal Market Bill. 

The President of the European Commission, Ursula von der Leyen, said that the timely agreement’s chances have started to fade with the time passing, which raised the fears on no-deal Brexit. However, this failed to cap the additional gains in GBP/USD pair as markets have already priced the no-deal Brexit worries. Moreover, the U.S. dollar was also under pressure on Wednesday ahead of FOMC meeting results and the speech of Fed Chair Jerome Powell. This added further strength in the GBP/USD pair.

 Daily Technical Levels

Support Pivot Resistance
1.2890 1.2949 1.3024
1.2815 1.3083
1.2757 1.3157

GBP/USD– Trading Tip

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

 

USD/JPY – Daily Analysis

The USD/JPY Pair was closed at 104.944 after placing a high of 105.432 and a low of 104.799. Overall the movement of the USD/JPY pair remained bearish throughout the day. The pair USD/JPY extended its bearish trend for the 3rd consecutive day and fell to its lowest since July 31. The U.S. Dollar Index fell 0.3% on Wednesday ahead of the U.S. Federal Reserve policy meeting outcome.

The decline in the U.S. dollar was due to the expectations that the Federal Reserve Open Market Committee will maintain a dovish stance on the economy’s outlook. Last month during the Fed’s annual Jackson Hole Symposium, the Federal Reserve unveiled a major change in policy and said it would now target an inflation rate that averages 2% over time. Previously the Fed’s target was to maintain inflation at 2%; the current U.S. consumer inflation is at 1.3%.

The Market Participants do not expect any rise in the Fed’s benchmark interest rate of 0.25% for a longer period; however, they were keenly awaiting the meeting to conclude whether the central bank issues any surprise economic projections. The dovish expectations kept the local currency under pressure that weighed on the USD/JPY pair on Wednesday.

Meanwhile, the Trade Balance from Japan showed a surplus of 0.35T from the anticipated 0.01T and supported the Japanese Yen that added further pressure on the USD/JPY pair on the data front. On the U.S. side, the Core Retail Sales in August fell to 0.7% from the anticipated 1.0% and weighed on the U.S. dollar that exerted further pressure on the USD/JPY pair. In August, the Retail Sales also fell to 0.6% from the anticipated 1.1% and weighed on the U.S. dollar that kept the pair USD/JPY on the downside.

However, in July, the Business Inventories that were released at 19:00 GMT dropped to 0.1% from the forecasted 0.2% and supported the U.S. dollar. The NAHB Housing Market Index also favored the U.S. dollar when it rose to 83 from the anticipated 78 and capped further downward movement in the USD/JPY pair.

On Wednesday, the U.S. President Donald Trump urged Republicans to hold a larger coronavirus package as this will increase the chances of striking a deal with Democrats. The comments from Trump showed a need for stimulus and raised hopes that the stimulus package will be announced soon, and hence, the U.S. dollar came under fresh pressure that ultimately weighed on USD/JPY pair prices.

On the other hand, the USD/JPY pair’s losses were limited by the latest news that supported the risk sentiment in the market. The U.S. Federal Government drew a sweeping plan on Wednesday to make vaccines for the coronavirus available for free to all Americans. The federal health agencies and the Defense Department offered plans for a vaccination campaign that will start in January or later this year. The market participants are waiting for his speech to find fresh clues about the economic condition and further monetary policy decisions by the U.S. government. Hence, the local currency remained under pressure ahead of it and kept weighing the USD/JPY currency pair.


Daily Technical Levels

Support Pivot Resistance
104.6700 105.0600 105.3300
104.4100 105.7100
104.0200 105.9800

USD/JPY – Trading Tips

The USD/JPY pair had violated the double bottom support level of 105.300 level, and closing of the candle below 105.300 level may drive more selling bias in the USD/JPY. On the lower side, the support stays at 104.780 level, and a bearish breakout can lead USD/JPY price further lower towards 104.300 level. The focus will remain on the U.S. Jobless claims data as it may drive further market trends. The MACD and EMA are also in support of selling bias. 

Good luck! 

 

 

Categories
Forex Market Analysis

Daily F.X. Analysis, September 16 – Top Trade Setups In Forex – Eyes on FOMC Fed Fund! 

On the news front, the eyes will remain on the FOMC Statement and Federal Funds Rate, which is not expected to show a rate change but will help us understand U.S. economic situation and policymakers’ stance on it. Besides, the Inflation reports from the U.K. and Eurozone are also likely to drive some price action during the European session today.

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD pair closed at 1.18461 after placing a high of 1.19003 and a low of 1.18393. Overall the movement of the EUR/USD pair remained bearish throughout the day. After rising for four consecutive days, the EUR/USD pair fell on Tuesday amid renewed safe-haven appeal for the U.S. dollar despite the strong Eurozone data. The EUR/USD turned negative for the day as the greenback managed to trim losses versus Euro as the latest statement from WTO weighed down the risk sentiment.

On Tuesday, the World Trade Organization ruled that the U.S. tariffs imposed on Chinese goods in 2018 that led to trade war were inconsistent with international trade rules. The WTO said that the U.S. did not provide evidence that its claims of China’s unfair technology theft and state aid justified the border taxes. 

The U.S. condemned and called WTO inadequate to the task of confronting China while Chinese officials cheered the ruling. Due to its safe-haven status on such news and weighed on EUR/USD pair on Tuesday, the U.S. dollar gained due to its safe-haven status.

On the data front, at 11:45 GMT, the French Final CPI in August remained flat with the expectations of -0.1%. At 14:00 GMT, the ZEW Economic Sentiment for Eurozone rose in September to 73.9 from the forecasted 63.0 and Euro. The German ZEW Economic Sentiment in September also rose to 77.4 from the forecasted 69.7 and supported the single currency. These positive reports from Eurozone gave the Euro strength and capped further losses in EUR/USD pair.

On the U.S. front, the Empire State Manufacturing Index for August rose to 17.0 from the projected 6.2 and supported the U.S. dollar that added further losses in EUR/USD pair. The Import Prices in August also advanced to 0.9% from the anticipated 0.5% and supported the losses of the EUR/USD pair.

On Tuesday, the U.S. Dollar Index (DXY) erased its previous losses and rose to 93.00 and was up by 0.6% on Tuesday. On the other hand, the Euro was weak against the U.S. dollar; hence, the pair EUR/USD came under pressure. Another factor involved in the sudden fall of EUR/USD pair prices was the World Health Organization’s latest warning. The WHO warned on Monday that Europe would face a rising death toll from the coronavirus during the autumn months as the number of daily infections worldwide reached a high record. This raised the fears and weighed on risk sentiment that dragged the EUR/USD pair on the downside.

Daily Technical Levels

Support Pivot Resistance
1.1821 1.1861 1.1883
1.1799 1.1923
1.1760 1.1945

EUR/USD– Trading Tip

The EURUSD pair is bouncing off the support level of 1.1835 level, and now it’s trading at 1.1845 level. For now, the EUR/USD may find support at 1.1815 level, and above this, the continuation of a bullish trend may lead EUR/USD price until 1.1903 level. Bearish correction can be seen until 1.1815 and 1.1764 support levels.


GBP/USD – Daily Analysis

The GBP/USD pair was closed at 1.28885 after placing a high of 1.29262 and a low of 1.28145. Overall the movement of the GBP/USD pair remained bullish throughout the day. The GBP/USD pair on Tuesday rose and extended its previous day’s bullish track on the back of positive macroeconomic data from the U.K. despite the strong rebound of the U.S. dollar in the market. However, the gains were limited as the issue of the internal market bill was still intact.

The GBP/USD pair rose on the strong U.K. jobs data on Tuesday when at 11:00 GMT, the Claimant Count Change from the U.K. dropped in August to 73.7K from the forecasted 99.5K and supported a single currency, the British Pound.

The Average earning Index for the quarter came in as -1.0% against the forecasted -1.3% and supported the British Pound that helped GBP/USD to gain traction. The Unemployment Rate in July remained flat with expectations of 4.1%.

The strong jobs report from the U.K. gave strength to the local currency Sterling and helped the pair rise for the second consecutive day. 

Meanwhile, the U.S. dollar was also strong on the board after the WTO ruled the U.S. tariffs as illegal on Chinese goods imposed in 2018 and triggered the US-China trade war. The U.S. dollar’s safe-haven status supported the greenback and the capped further gains in GBP/USD pair on Tuesday.

Moreover, the mixed U.S. macroeconomic data also helped the GBP/US pair to post gains on Tuesday. At 17:30 GMT, the Import Prices in August rose by 0.9% from the forecasted 0.5% and supported the U.S. dollar. While, at18:15 GMT, the Industrial Production from the U.S. in August fell to 0.4% from the forecasted 1.2% and weighed on the U.S. dollar. The Capacity Utilization Rate also dropped to 71.4% from the expected 71.7% and weighed on the U.S. dollar that ultimately supported the GBP/USD pair’s strength on board.

Furthermore, the concerns related to the availability of coronavirus testing in the country have been raised as the hospital staff has warned about the situation. However, Prime Minister Boris Johnson has unveiled an “Operation Moonshot” that aimed to test 10 million people every day for the coronavirus and restore life to normal by winter.

The U.K. also struggled to impose the latest “rule of six” limit on social gathering as the crime minister urged neighbors to report for any suspected breach of the new rule. This comes after the U.K.’s reproduction or R number escalated between 1 and 1.2 for the first time since March. These ongoing virus updates also capped further upside momentum in GBP/USD pairs.

However, on the Brexit front, the main sticking point, for the time being, was that whether the U.K. will go back on its word over the custom territory in Northern Ireland. The Internal Market bill is undervotes through the House of Commons and the House of Lords. It is not clear whether the bill will pass, but it will break the international law if it does. A deal between the E.U. and the U.K. will still be possible, but it would represent a lack of trust and could impact the future relationship of E.U. & U.K.

 Daily Technical Levels

Support Pivot Resistance
1.2825 1.2876 1.2937
1.2763 1.2989
1.2712 1.3050

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 pair was closed at 105.440 after placing a high of 105.812 and 105.299. Overall the movement of the USD/JPY pair remained bearish throughout the day. The USD/JPY pair extended its losses and dropped to its 2-weeks lowest level near 105.200 ahead of the FOMC meeting. The U.S. Dollar Index fell to 92.85 on Tuesday and lost 0.22% as the U.S.’s major equities were higher with the S&P 500 up by 0.7%.

The USD/JPY pair came under fresh pressure after the latest comments from WTO and WHO on Tuesday. China’s upbeat data also boosted risk sentiment, but the market traders ignored it, and the pair USD/JPY continued its downward movement. On Tuesday, the World Trade Organization ruled that the tariffs imposed in 2018 on Chinese goods by the United States were inconsistent with the international rules. This raised the uncertainty and safe-haven appeal, and the Japanese Yen gained traction that ultimately weighed on the USD/JPY pair.

The top American trade Ambassador, Robert Lighthizer, said that the U.S. must be allowed to defend itself against unfair trade practices and that WTO was inadequate with its task to confront China. Whereas, Chinese officials cheered the ruling by WTO.

 On the other hand, on Monday, the World Health Organization warned that Europe would see a rise in the daily number of COVID-19 deaths in October and November as the rising number of coronavirus cases worldwide was not slowing down. This also weighed on risk sentiment, and the Japanese Yen gained traction that led to downward momentum in the USD/JPY pair.

Meanwhile, the Chinese Industrial Production and Retail Sales for the year advanced in August and supported the hopes of economic recovery. This supported the risk sentiment and capped further losses in the USD/JPY pair on Tuesday.

On the data front, at 17:30 GMT, the Empire State Manufacturing Index in September rose to 17.0 from the expected 6.2 and supported the U.S. dollar. The Import Prices in August also rose to 0.9% from the forecasted 0.5% and supported the U.S. dollar. 

At 18:15 GMT, the Capacity Utilization Rate from the U.S. in August dropped to 71.4% from the forecasted 71.7% and weighed on the U.S. dollar and supported the downward momentum of the USD/JPY pair. The Industrial Production in July also dropped to 0.4% from the forecasted 1.2% and the previous 3.5% and weighed heavily on the U.S. dollar that supported the losses of the USD/JPY pair on Tuesday. 

Furthermore, the FOMC meeting for September has started on Tuesday, and it will be concluded on Wednesday with the speech of Jerome Powell, the chairman of the Federal Reserve. The market participants are waiting for his speech to find fresh clues about the economic condition and further monetary policy decisions by the U.S. government. Hence, the local currency remained under pressure ahead of it and kept weighing the USD/JPY currency pair. In July, industrial production also dropped to 0.4% from the forecasted 1.2% and the previous 3.5% and weighed heavily on the U.S. dollar that supported the losses of the USD/JPY pair on Tuesday. 

Furthermore, the FOMC meeting for September has started on Tuesday, and it will be concluded on Wednesday with the speech of Jerome Powell, the chairman of the Federal Reserve. The market participants are waiting for his speech to find fresh clues about the economic condition and further monetary policy decisions by the U.S. government. Hence, the local currency remained under pressure ahead of it and kept weighing the USD/JPY currency pair.

Daily Technical Levels

Support Pivot Resistance
105.2100 105.5200 105.7500
104.9800 106.0600
104.6700 106.2800

USD/JPY – Trading Tips

On Wednesday, the USD/JPY currency pair continues to drop to test the

the double bottom support area of 105.250 level. Recently on the 4-hour timeframe, the USD/JPY pair is forming a bullish engulfing candle that’s followed by the bearish candles, suggesting that sellers are exhausted, and the bulls enter the market now. The USD/JPY pair may bounce off over 105.250 level to complete the 38.2% Fibonacci retracement level at 105.545 and 61.8% Fibonacci level of 105.750 level. Later today, the U.S. Fed Fund Rate will remain in the highlights. Therefore, we should be cautious with the trades that we open, and in fact, we should try to close them ahead of the news release. Good luck! 

 

Categories
Forex Market Analysis

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

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

Economic Events to Watch Today  

 

EUR/USD – Daily Analysis

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

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.1835 1.1862 1.1894
1.1803 1.1921
1.1776 1.1954

EUR/USD– Trading Tip

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

GBP/USD – Daily Analysis

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

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

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

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

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

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

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

 Daily Technical Levels

Support Pivot Resistance
1.2774 1.2847 1.2919
1.2702 1.2992
1.2629 1.3063

GBP/USD– Trading Tip

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

USD/JPY – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
105.4500 105.8300 106.1200
105.1600 106.5000
104.7800 106.7800

USD/JPY – Trading Tips

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

 

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Forex Market Analysis

Daily F.X. Analysis, September 14 – Top Trade Setups In Forex – U.S. Industrial Production in Focus! 

On Monday, the focus will remain on the European Industrial Production m/m data; however, the data is low impact and may not drive major market movements. Therefore, the technical side may drive further trends in the market.

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The EUR/USD prices were closed at 1.18435 after placing a high of 1.18740 and a low of 1.18099. Overall the movement of the EUR/USD pair remained bullish throughout the day. The EUR/USD pair rose for the 3rd consecutive day on Friday amid the rising risk-on market sentiment and more hawkish comments from the ECB. The market’s attention was on if the ECB would mention the recent appreciation in the local currency.

The ECB President Christine Lagarde said that ECB members had noticed the single currency’s recent strength, but there was no policy change to address given the rise as there was nothing to worry about. The recent rise was attributed to the improving economic data after the restrictions imposed due to coronavirus were lifted and economic activities started.

However, ECB’s more positive comments, even the Eurozone, have entered into a deflationary period, giving further strength to the single currency and the pair EUR/USD posted gains.

On the data front, the German Final CPI in August remained flat with the expectations of -0.1%. At 11:00 GMT, the German WPI in August dropped to -0.4% from the expected 0.5% and weighed on a single currency. At 13:00 GMT, the Italian Quarterly Unemployment Rate dropped to 8.3% in August from the forecasted 8.4% and supported a single currency that helped the EUR/USD pair rise and post gains.

Furthermore, the upward trend in EUR/USD pair on Friday was also supported by the Eurogroup and other European Union finance ministers who met in Berlin on the day and facilitated the growth in Europe.

Whereas, the gains in EUR/USD pair were capped by the improving U.S. dollar strength that was backed by the positive CPI data from the United States on Friday. At 17:30 GMT, the Consumer Price Index in August rose to 0.4% from the expected 0.3% and supported the U.S. dollar. In August, the Core Consumer Price Index also rose to 0.4% against the expected 0.2% and supported the U.S. dollar.

The strong U.S. dollar kept the gains in EUR.USD pair limited at the ending day of the week. Meanwhile, the latest Brexit worries with no progress from both sides also kept the EUR/USD pair’s gains limited on Friday.

On the coronavirus pandemic front, the cases in many European countries rose back to March levels and forced governments to re-impose restrictions to curb the spread. The latest surge in coronavirus cases was attributed to August’s vacations when many tourists visited a handful of destinations. Another reason could also be the fact that schools were reopened in August. These rising cases from many European countries kept the gains in EUR/USD pair limited.

Daily Technical Levels

Support Pivot Resistance
1.1831 1.1840 1.1850
1.1820 1.1860
1.1811 1.1870

EUR/USD– Trading Tip

The EUR/USD continues to trade at 1.1835 level as the ECB decided to leave its 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 1.27946 after placing a high of 1.28656 and a low of 1.27624. Overall the movement of the GBP/USD pair remained bearish throughout the day. The GBP/USD pair extended its previous day bearish trend and posted losses on Friday amid the strong U.S. dollar and lingering Brexit worries. Prime Minister Boris Johnson reportedly pushed ahead with the bill that would seek to override the withdrawal deal despite threats from the European Union.

According to the Guardian report, Prime Minister Boris Johnson attempted to whip up demand for their internal market bill. He told his lawmakers that the legislation was necessary to stop a foreign power from breaking up the United Kingdom. He also insisted that there was no time for questions. Prime Minister Boris Johnson also faced a rebellion from his party, who have tabled an amendment that would give Parliament the right to veto the bill. After the E.U., this move came in threatened to abandon a UK-EU trade deal if the Prime Minister moved ahead with the legislation. 

The latest internal market bill published on Wednesday could create standard rules that apply across the U.K., including England, North Ireland, Scotland, and Wales. The new bill is expected to clash with key terms of the Brexit agreement that requires Northern Ireland to follow E.U. rules in the post-Brexit period to avoid a hard border with the Republic of Ireland.

The emergency talks held this week also failed to break the deadlock between E.U. & U.K. negotiators, and the differences in essential areas remain. PM Boris Johnson has warned that if no progress in trade talks will not be made until mid-October, the U.K. will leave the E.U. without a deal and follow WTO rules. The GBP/USD pair remained under pressure. Both sides were ready and prepared for a no-deal or hard Brexit as Michel Barnier, the top E.U. negotiator, said that the E.U. had intensified its preparedness work to be ready for all scenarios on January 1, 2021.

Apart from Brexit, the macroeconomic data released on Friday from Great Britain also affected GBP/USD prices. At 110:00 GMT, the Construction Output from the United Kingdom in July rose to 17.6% against the forecasted 10.3% and supported GBP. The GDP from the U.K. in July remained flat with expectations of 6.6%. The Goods Trade Balance from Britain declined more than forecast and weighed on local currency. The balance was dropped to -8.6B from the projected -7.4B and weighed on GBP.

The Index of Services for the quarter also dropped to -8.1% from the expected -7.8% and weighed on the local currency that added pressure on GBP/USD pair. The Industrial Production in July rose to 5.2% in the U.K. against the forecasted 4.2% and supported GBP. The Manufacturing Production in the United Kingdom in July rose to 8.3% from the forecasted 8.4% and supported GBP. Consumer Inflation Expectations in August dropped to 2.8% from the previous 2.9%.

The negative data from the United Kingdom weighed on local currency and added losses in the GBP/USD pair on Friday. From the USD front, the CPI and Core CPI in July rose to 0.4% against the expectations of 0.3% and 0.2%, respectively, and supported the U.S. dollar. The strong U.S. dollar added further losses in GBP/USD pair.

 Daily Technical Levels

Support Pivot Resistance
1.2786 1.2799 1.2823
1.2762 1.2836
1.2748 1.2860

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. 

In the wake of low safe-haven demand, the broad-based U.S. dollar weakness becomes the major factor that kept the pressure on any further gains in the currency pair. Meanwhile, the ongoing 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.

Across the ocean, the market trading sentiment rather unaffected by the intensified US-China tussle and Brexit issue. The Trump administration continues to hold 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 eyes 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.

Despite this, the crude oil prices’ gains were capped by the continuing oversupply fears and a slow recovery in global fuel demand. This was witnessed after the builds in crude oil supply reported during the previous week by both the American Petroleum Institute (API) and the U.S. Energy Information Administration (EIA). Meanwhile, the ongoing COVID-19 pandemic continuing to hamper fuel demand recovery. As per the latest report, the World Health Organization (WHO) recorded a record single-day hike in COVID-19 cases by 307,930 in 24 hours during this weekend.

Daily Technical Levels

Support Pivot Resistance
106.0900 106.1500 106.2100
106.0300 106.2800
105.9600 106.3400

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 09 – Top Trade Setups In Forex – U.S. China Conflict in Play! 

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

Economic Events to Watch Today  

 

 


EUR/USD – Daily Analysis

The UR/USD pair was closed at 1.17734 after placing a high of 1.18273 and a low of 1.17654. The EUR/USD pair dropped on Tuesday and extended its bearish move for the 3rd consecutive day on the back of a strong U.S. dollar and ahead of ECB monetary policy meeting.

Recently ll eyes have turned towards the upcoming meeting of European Central Bank on Thursday to observe if they will do anything to push inflation pressure higher. Chief Economist Philip Lane has raised concerns over the high prices of local currency the last week. Though the currency has already come under pressure due to currency devaluation expectations or inflation, investors are still awaiting the words from ECB. The currency Euro is facing heavy pressure ahead of ECB’s monetary policy meeting and is weighing on EUR/USD for the past three days. The pair continued following the same pressure and dropped on Tuesday as well.

On the data front, 10:30 GMT, the French Final Private Payrolls for the quarter dropped to -0.8% from the projected -0.6%and weighed on Euro. At 11:00 GMT, the German Trade Balance showed a surplus of 18.0B against the expected 14.9B and supported Euro. At 11:45 GMT, the French Trade Balance was released that remained flat with the expectations of -7.0B. At 13:00 GMT, the Italian Retail Sales for July dropped to -2.2% from the projected 1.1% and weighed on Euro. At 14:00 GMT, the Final Employment Change for the quarter dropped to -2.9% from the forecasted -2.8% and weighed on Euro. The Revised GDP for the quarter from Eurozone dropped by -11.8% against the expected -12.1% and supported Euro. As most data came in against the single currency Euro, the EUR/USD pair came under fresh pressure and dropped on Tuesday to 8th day lowest level.

From the U.S. side, the NFIB Small Business Index was released at 15:00 GMT that advanced to 100.2 against the expected 99.0 and supported the U.S. dollar. The strong U.S. dollar added further pressure on EUR/USD pair and dragged the pair down.

Meanwhile, as the global coronavirus cases have surged to 27.3M, including 893,000 deaths, Spain has become the first nation in Western Europe to exceed half-million COVID-19 total infections. This also weighed on the local currency Euro and added in the currency pair losses.

The U.S. dollar was already strong because of its safe-haven status amid the rising US-China tensions after the tech fight escalated. 

The U.S. has announced tariffs of any American company forcing overseas production. The U.S. has also warned its companies not to work with any Chinese company or face sanctions. Whereas, the greenback was also strong because of the weakness of its rival currency like the Euro and GBP. 

Daily Technical Levels

Support Pivot Resistance
1.1753 1.1791 1.1817
1.1727 1.1855
1.1690 1.1881

EUR/USD– Trading Tip

The EUR/USD is trading with a bearish bias around 1.1780 level, having immediate support at 1.1756 level that’s extended by a double bottom pattern. On the 4 hour timeframe, the violation of the 1.1756 level may extend the selling trend until the 1.1715 level. The EUR/USD may find resistance at 1.1862 and 1.1958 level. Bullish bias seems dominant today.


GBP/USD – Daily Analysis

The GBP/USD closed at 1.29806 after placing a high of 1.31697 and a low of 1.29798. Overall the movement of the GBP/USD pair remained bearish throughout the day. THE GBP/USD pair fell below 1.30 level on Tuesday at the lowest level since 30-July 2020. The pair extended its previous day bearish movement due to a fresh threat by Prime Minister Boris Johnson to leave the E.U. without any deal if progress in talks will not be made till October 15.

Johnson has said that there would need to be an agreement in place by the mid-October deadline when European Council convenes or warned that the U.K. would leave the negotiating table and follow the WTO rules.

However, the talks have become tough after the U.K. has already angered the E.U. members by unveiling plans to introduce a new law that would undermine the withdrawal agreement. Both parties signed the agreement into law and included all terms and conditions of the U.K.’s departure from the bloc.

The new bill aims to create common rules that would apply across the whole of the U.K. are expected to clash with the terms of the withdrawal agreement that requires the Northern Ireland to keep following E.U. rules in the post-Brexit period to avoid a hard border with the Republic of Ireland.

The talks have started on Tuesday between the E.U. chief negotiator Michel Barnier and U.K. chief negotiator David Frost. The U.K.’s controversial move about new law has made the E.U. angry, and the E.U. has said that it will be ready for a no-deal Brexit when the transition period ends on December 31. The British Pound suffered massively as the concerns raised ahead of Brexit talks and dropped below 1.30 level on Tuesday.

On the data front, at 04:01 GMT, the BRC Retail Sales Monitor for the year in August rose to 4.7% from the expected 3.5% and supported British Pound, but the traders ignored it as the focus was shifted towards Brexit talks. The U.S. dollar was also strong in the market due to positive data and safe-haven appeal and also weighed on GBP/USD currency pair. At 15:00 GMT, the NFIB Small Business Index advanced to 100.2 from the expected 99.0 and supported the U.S. dollar that added pressure on GBP/USD pair.

 Daily Technical Levels

Support Pivot Resistance
1.2918 1.3049 1.3118
1.2849 1.3249
1.2719 1.3318

GBP/USD– Trading Tip

The GBP/USD is trading with a selling bias at 1.2948 level, set to test the support level of 1.2923 level. The Cable is trading within a downward channel, extending support at 1.2923 level and resistance at 1.3013. On the downside, the GBP/USD pair may find support at 1.2857 level upon the violation of the 1.2923 level. The recent bearish engulfing candle is also in support of the selling trend. The MACD is also supporting selling bias; therefore, we will be looking for selling trades below the 1.3000 level.  


USD/JPY – Daily Analysis

Today in the European trading session, the USD/JPY currency pair failed to break its thin trading range and still hovering below the 106.50 marks. However, the choppy trading around the currency pair could be associated with the risk-off market sentiment, driven by the US-China tussle and Brexit concern, which eventually underpinned the safe-haven Japanese yen and kept the currency pair under pressure. On the other hand, the broad-based U.S. dollar strength, supportive by the safe-haven demand, becomes the key factor that keeps trying to break the pair’s thin trading range. At this moment, the USD/JPY currency pair is currently trading at 106.30 and consolidating in the range between 106.20 – 106.39.

Despite the optimism over a potential treatment/vaccine for the highly infectious virus, the market risk sentiment remains depressive. Be it the worrisome headlines concerning the Brexit or the tension between the US-China, not to forget the coronavirus issues in the U.S., the market trading sentiment has been flashing red since the European session started, which ultimately keeps the safe-haven assets supportive on the day. 

At the US-China front, the rising tensions between the United States and China continued to pick up the pace as President Trump earlier imposed punitive measures over the Asian major. As a result, China announced new visa restrictions to counter the Trump administration’s action against China. Also fueled the tension could be the fresh headlines suggested that the U.S. is considering banning some or all products made with cotton from China’s Xinjiang region. Apart from this, the Brexit’s gloomy headlines also weighed on the market trading sentiment, which eventually supported the safe-haven appeal in the market and dragged the currency pair down.

Also weighed on the market trading sentiment were 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.

On the contrary, the broad-based U.S. dollar succeeded in maintaining its positive traction and remaining bullish on the day amid risk-off sentiment. The U.S. dollar gains were further bolstered by the ongoing upsurge in the U.S. Treasury bond yields. However, the U.S. dollar’s modest gains turned out to be the major factor that capped the pair’s further downside momentum. Whereas, the U.S. Dollar Index, which tracks the greenback against a basket of other currencies, rose by 0.13% to 93.168 by 9:53 PM ET (2:53 AM GMT).


Daily Technical Levels

Support Pivot Resistance
105.7900 106.0900 106.3200
105.5600 106.6200
105.2500 106.8500

USD/JPY – Trading Tips

The USD/JPY is consolidating at 105.928 area, having a resistance mark of 106.025 level. An upward crossover of 106.024 level may extend further buying trend until the 106.480 level, and the violation of this level can extend buying until the next resistance level of 106.840. 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 08 – Top Trade Setups In Forex – European Data in Focus! 

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

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.1803 1.1826 1.1841
1.1788 1.1864
1.1764 1.1879

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

 Daily Technical Levels

Support Pivot Resistance
1.3109 1.3197 1.3254
1.3052 1.3342
1.2964 1.3398

GBP/USD– Trading Tip

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


USD/JPY – Daily Analysis

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

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

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

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

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

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

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


Daily Technical Levels

Support Pivot Resistance
106.1100 106.2500 106.3800
105.9900 106.5100
105.8500 106.6400

USD/JPY – Trading Tips

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

Categories
Forex Market Analysis

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

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

Economic Events to Watch Today  

 


EUR/USD – Daily Analysis

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

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

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

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

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

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

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

Daily Technical Levels

Support Pivot Resistance
1.1828 1.1838 1.1844
1.1821 1.1855
1.1811 1.1861

EUR/USD– Trading Tip

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


GBP/USD – Daily Analysis

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

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

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

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

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

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

 Daily Technical Levels

Support Pivot Resistance
1.3231 1.3257 1.3274
1.3214 1.3300
1.3188 1.3317

GBP/USD– Trading Tip

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

USD/JPY – Daily Analysis

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

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

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

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

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

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

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

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


Daily Technical Levels

Support Pivot Resistance
106.2400 106.2800 106.3500
106.1700 106.3900
106.1300 106.4600

USD/JPY – Trading Tips

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