Home Daily Analysis Forex Market Overview Daily FX Brief, Aug 15 – U.S. Retail Sales, Top Trade Setups!

Daily FX Brief, Aug 15 – U.S. Retail Sales, Top Trade Setups!

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On Thursday, a slight bullish bias is back into the US Dollar, even if not as strong as the market flows seen in Japanese Yen and the Swiss Franc, which remain kings in times of risk aversion. The U.S. dollar increased traction on Thursday, lifted by the White House’s decision to delay tariff on some Chinese goods. Stronger-than-expected CPI data also helped the currency get firm. The Dollar Index climbed 0.4% on the day to 97.78.

On the economic calendar side, we have a series of catalyst that might impact trading and may drive sharp fluctuations in the market. Retail sales from the United Kingdom and the United States stays on top. Let’s took at these fundamentals…

Economic Events to Watch Today

 

EUR/USD – Daily Outlook

The common currency took a major hit upon the release of weak Gross Domestic Growth numbers. Such as, during the second quarter of 2019, the real (price-adjusted) gross domestic product in Germany declined by 0.1% in the first quarter of 2019.

The Federal Statistical Office (Destatis) further reports that Germany underwent a petty deterioration in economic performance. The first quarter of 2019 showed an improvement of 0.4% versus the fourth quarter of 2018.

US Retail Sales m/m – 12:30 GMT

Today, the EUR/USD may gain some support on the back of weaker forecast of the U.S. retail sales figures. The numbers may further diminish on hopes for an inflation recovery as critics predict a moderate monthly gain of 0.3% versus 0.4% in the prior month.

Although such outcomes are considered healthy, it yet appears almost dark under a tightening labour market where the unemployment rate is the most profound in 50 years and wage extension the highest in 10 years.

The EUR/USD tested and violated the horizontal support level of 1.1169. The level was extended bu descending triangle on 3-hour timeframe and now the same level is extending resistance to EUR/USD.

The EUR/USD may drop further until 1.1110, but before that, the pair is likely to exhibit slight bullish recovery.

Daily Support and Resistance

R3: 1.1275

R2: 1.1215

R1: 1.1178

Key Trading Level: 1.1154

S1: 1.1118

S2: 1.1094

S3: 1.1034

EUR/USD – Trading Tips

Consider staying bearish below 1.1160 to target 1.1110. You should also keep an eye on retail sales data which is due to be released by the United States today.

GBP/USD – Daily Outlook

It’s been a while now, the GBP/USD currency pair continues to remain lifeless between 1.20 and 1.21, neutral to market’s concerns as the Pound has plenty to deal with, in particular, the hard-Brexit remains in highlights.

The GBP/USD pair surged to 1.2100 after the announcement of the UK inflation numbers that mounted in July by 2.1% YoY, knocking the market’s forecast of 1.9%.

On the other hand, core CPI in the corresponding session was pat at 0.0%, greater than the -0.1% forecast. The numbers strengthened the market’s expectation that the BOE won’t lower rates, as employment readings released Tuesday also recommended so.

Technical outlook of the GBP/USD remains neutral as the pair haven’t moved and continues to trade the 1.2050/60 region. Having met sellers for a third consecutive day around the 1.2100 level.

Thus, the technical outlook is mostly the same as 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.

Daily Support and Resistance

R3: 1.2171

R2: 1.212

R1: 1.2089

Key Trading Level: 1.207

S1: 1.2039

S2: 1.2019

S3: 1.1969

GBP/USD – Trading Tips

Recalling our Aug 14 brief, the GBP/USD pair exactly traded in line with our forecast. I’m sticking with the same trade idea of staying bearish below 1.2060 while having a target of around 1.2015 and 1.1995 today.

USD/JPY – Daily Outlook

The safe-haven currency Japanese yen surged to a session high versus the dollar following the U.S. Treasury bond yield curve transposed for the first time since 2007. As a result, the traders looked for safe-haven assets shelter to cope up with the looming global recession.

Technically speaking, the USD/JPY pair recovered from a daily low of 105.64 but trades beneath 106.00 ahead of the European opening, hovering around 105.90.

In the 4 hours timeframe, the bearish trend delayed just above the horizontal support level of 105.750 and below the EMA resistance area of 106.

Daily Support and Resistance

R3: 106.06

R2: 105.99

R1: 105.95

Key Trading Level: 105.91

S1: 105.87

S2: 105.83

S3: 105.76

USD/JPY – Trading Tips

Let’s keep an eye on 105.700 as the USD/JPY is likely to stay bearish below this and bullish above the same level. On the lower side, the target remains around 105.100 and bullish target stays at 106.800.

All the best!

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