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Daily FX Brief, Aug 14 – Top Trade Setups In Forex, U.K. Inflation In Focus!

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The U.S. dollar held off clobbering the Japanese yen following the Trump administration remarks that they would delay 10% tariffs on some Chinese products scheduled to begin next month. It’s being considered as a significant concession in the trade conflict between Washington and Beijing.

Consequently, we are seeing risk-on sentiment in the market as investors are moving their investments into stock markets while selling the safe-haven assets such as gold and Japanese yen.

On the economic docket, the economic events from Eurozone and UK remain in highlights. In particular, British CPI (consumer price index) is likely to shake the markets.

Economic Events to Watch Today

 

 

EUR/USD – Daily Outlook

A day before, the Federal Statistical Office (Destatis) reported the wholesale figures for the Eurozone. As per the report, the selling prices in wholesale trade declined by 0,1% in July 2019 from the corresponding month of the previous year. In June 2019 and in May 2019 the yearly rates of change had been +0,3% and +1,6%, respectively. Whereas, the index fell by 0.3% in June 2019 to July 2019.

German GDP – 6:00 GMT

The Eurozone’s biggest economy has been experiencing a slump in the manufacturing sector. Has it transformed into an unconditional contraction?

Well, the forecast is a squeeze of 0.1% in the second quarter after rising by 0.4% in the first quarter of the year. The German figures support the overall Eurozone, which is held at 0.2% in the initial read.


 

The EUR/USD attempts to test the 100 periods Moving Average after taking another U-turn from near-term resistance-line. While 1.1283/87 can please buyers during upside break, 23.6% Fibonacci retracement can attract during post-1.1158 declines.

For EUR/USD, it’s been another failure to cross six-week-old descending trend-line. The EUR/USD trades near 1.1180 during Wednesday morning in Asia, and it’s trying to violate the descending triangle pattern support level around 1.1160.

Violation horizontal support is likely to push EUR/USD prices towards 1.1110.

Daily Support and Resistance
R3: 1.1307
R2: 1.1249
R1: 1.1211
Key Trading Level: 1.119
S1: 1.1152
S2: 1.1132
S3: 1.1074

EUR/USD – Trading Tips

We have two trade plans today. First is to carry on trading sideways within a narrow trading range of 1.1245 – 1.1165. Secondly, we can enter a sell position on a bearish breakout of 1.1160 support level to target 1.1100.

GBP/USD – Daily Outlook

On the fundamental’s side, the British Prime Minister Boris Johnson’s aspirations for a swift departure from the European Union caught a hit today when a British judge ordered that he could not prorogue parliament – in another term, he could not delay UK parliament in order to force through a no-deal, “hard Brexit.”


 

The GBP/USD continues to stay bearish, trading below 1.2095 resistance area but remain hesitant to cross above 1.2100 prices. On the lower side, support continues to stay at 1.1990 as the cable hasn’t been able to violate that trading level. While, resistance prevails at 1.2095, the double top level.

Series of 20, 25 and 50 periods EMA also extend resistance at 1.2095. Bullish breakout at 1.2100 can extend buying until 1.2180.

UK Inflation Report – 8:30 GMT

A day before, investors were eyeing the U.S. inflation data, which helped investors capture quick moves in the market. Whereas, one of the major economic event staying in highlights is the Inflation report from the U.K.

The headline CPI (Consumer Price Index) has been at precisely the Bank of England’s 2% target back in June and may have shifted to 1.9% in July – boosting the odds that the BOE cuts interest rates either in its forthcoming meeting in September or in early November – immediately after Brexit. Core CPI is predicted to remain stable at 1.9%.

Daily Support and Resistance
R3: 1.218
R2: 1.2124
R1: 1.2093
Key Trading Level: 1.2067
S1: 1.2036
S2: 1.2011
S3: 1.1955

GBP/USD – Trading Tips

Traders, I’m expecting bearish trades below 1.2060 while having a target of around 1.2015 and 1.1995 today. All the best!

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