FX Market Recap
- Last week’s price action in the Forex market was mainly driven by news relating to the ongoing (and escalating) trade spat between the USA and China. It was only just over five trading days ago that everything we’re looking much more optimistic on the argument and some investors will be anticipating that we could see any relatively sudden turn around in sentiment. But if we don’t notice signs of this incident soon, then we will probably have seen a top in the recent stock market bull run.
- As the recent trading week begins, investors focus is likely to remain on how aggressively will Beijing retaliates to the U.S. administration raising the tariff rate from 10% to 25%, and how swiftly will the U.S. inflict the new tariffs on the remaining $250 billion worth of imported good from China?
- The U.S. dollar was little changed on Friday, with the ICE dollar index closing at 97.33, compared with 97.37 in the previous session.
- The Euro gained 0.1% to $1.1235, and USD/JPY rose 0.2% to 109.94, snapping a three-day decline.
- The British pound slipped 0.1% to $1.3000. Official data showed that the U.K. first-quarter GDP grew 1.8% on year (as expected).
EUR/USD - Dollar Gains Momentum, Bullish Channel In Focus
From the past two weeks, the single currency Euro is moving with a slight bullish bias against the U.S. dollar, recovering the recent bearish movement. Recalling our previous brief, we suggested to staying bullish above 1.1190 to target 1.1260 and the market exactly traded in line with a forecast but reversed after placing a high of 1.1252 instead of 1,260.
Technically, the EUR/USD has tested the double top resistance level of 1.1250 which for sure is giving a hard time to bulls.
The 20, 25 and 50 periods EMA will be there to support the direct currency pair around 1.1215.
The most highlighting part is the bullish channel on the 4-hour timeframe. The EUR/USD is trading the bullish channel which is extending support around 1.1215 and resistance around 1.1250.
Support and Resistance
R3: 1.1307
R2: 1.1271
R1: 1.1253
Key Trading Level: 1.1235
S1: 1.1217
S2: 1.1199
S3: 1.1163
EUR/USD - Trade Tip
Traders, I would consider staying bearish under 1.1250 to target 1.1215 and 1.1190. However, consider buying above 1.1250 only in case of a bullish breakout.
USD/JPY Violating Triple Bottom - Is It Good Time To Sell?
The safe-haven yen continues to trade bullish slightly as the Chinese yuan, and the Australian dollar slipped lower on Monday, after the latest escalation in the trade war between the United States and China.
Basically, the softer than expected US CPI/weaker U.S. bond yields also exerts some pressure on the greenback. The downside remains limited as investors still await fresh updates on US-China trade talks.
On the technical front, the USD/JPY has failed to capitalize on its early attempted recovery to the key 110.00 psychological marks. The USD/JPY pair refreshed session lows in reaction to softer U.S. consumer inflation figures.
Well, for now, the USD/JPY is consolidating above a triple bottom support area of 109.710. Both, the lagging and leading indicators are suggesting a bearish bias for the pair. But it’s also true that we can expect a bullish retracement anytime. In fact, I was expecting a bullish retracement above 109.700. Anyhow, the immediate support prevails around 108.800.
Support and Resistance
R3: 110.97
R2: 110.4
R1: 110.18
Key Trading Level: 109.83
S1: 109.61
S2: 109.26
S3: 108.69
USD/JPY Trade Tip
Let’s keep an eye on the next resistance level of 109.850 as the pair can stay bearish and bullish above this level today. So all the best!
