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Daily FX Brief, Aug 22 – All Eyes On ECB & PMI Figures, Top Trade Setups!

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On Thursday, the market is trading in a lite mode as most of the traders await a set of economic data from Eurozone. On top of the list, we got PMIs, and ECB minutes, however, there will also be a reaction to the FOMC minutes which were released during the New York session on Wednesday.

On the political aspect, Conte’s resignation and the commencement of discussions among Italy’s President and party leaders appeared to settle the Italian markets.

From the United States, Trump passed a diverse bag for the markets to think. The markets were ready to wipe aside Trump’s unwillingness to secure a trade deal with China. It was nothing unusual to bother the markets. On the positive, Trump implied that more changes, in the shape of tax cuts, stood on the horizon to promote economic growth.

Economic Events to Watch Today

Let’s took at these fundamentals

 


EUR/USD – Daily Analysis

During the early Asian session, the EUR/USD currency pair hit a bullish track of 1.1092 and currently trading at 1.1084. Basically, the pair is on the defensive track due to the release of all main flash Eurozone and German Purchasing Managers Index readings for this month.

However, the Italian political risks and the instability in the Chinese Yuan could complicate matters for the EUR/USD currency pair.

The European currency hit a big sell-off of 1.1250 but moved out at lows around 1.1066 on 16 August. However, the buyers are not able to obtain on the seller exhaustion now.


 

Germanys market Manufacturing PMI, scheduled for release 07:30 GMT, is awaited to represent the activity dropped deeply into contraction territory in August. Besides this, the Germany market Manufacturing is awaited to ease to 43.0 from July’s reading of 43.2. In the meantime, market service is marked easing to 54.0 from 54.5.

Such as the European Central Bank already under a burden to cut further rate ut and the dovish expectations would be bolstered if the German manufacturing PMI results below forecasts. Therefore, the EUR/USD currency pair could drop below 1.1065, proving a bear flag breakdown on the 4-hour chart.

Daily Support and Resistance

S3 1.1037

S2 1.1065

S1 1.1076

Pivot Point 1.1092

R1 1.1104

R2 1.1119

R3 1.1147

The EUR/USD currency pair might increase to 1.1150 due to minutes shows the market’s concerns regarding international recession, leaving a negative impact on the United States economy. That will raise the possibilities of further easing, which is held in September.

EUR/USD – Trading Tips

Keep a particular focus on German PMI figures and ECB data, however, I’m considering to stay bearish below 1.1095 to target 1.1065 and 1.1030.


GBP/USD – Daily Analysis

The GBP/USD currency pair little changed and presently trading at 1.2130 due to all traders intently waiting for clues and details of the United Kingdom Prime Minister Boris Johnson and the President of French meeting.

Meanwhile, the UK Prime Minister Boris Johnson came back from a Germany with a piece of Positive news as Chancellor Angela Merkel represented the willingness to renegotiate Irish backstop if Britain reaches with a heavy alternative within 30 days.

On the other hand, all Investor’s eyes remain on the detail of UK Prime Minister Boris Johnson and French. Recent news from France that hasn’t been positive because it turns any settlement requests while keeping the United Kingdom responsible for paying the bill of divorce £39billion despite the no-Brexit deal.


 

At the Trade US-China trade front, the United States President Donald Trump carries a U-turn habitually to increase the chances of the trade deal with China whereas geopolitical anxieties regarding the Middle East and North Korea keep the sound of risk limited.

Moreover, the United Kingdom and France Minister meet, the UK CBI Distributive Retail Sales and the US Markit PMI numbers would also support short-term traders due to the crucial Jackson Hole Symposium which is starting from today.

Daily Support and Resistance

S3 1.2038

S2 1.2086

S1 1.2108

Pivot Point 1.2134

R1 1.2156

R2 1.2181

R3 1.2229

GBP/USD – Trading Tips

Consider staying bullish above 1.2070 in GBP/USD with a target of 1.2130 and 1.2180. All the best!

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