On Friday, the U.S. dollar edged higher versus the yen on forecasts of a pivotal speech by Federal Reserve Chairman Jerome Powell will strengthen that the U.S. central bank has not opened a prolonged monetary easing cycle. The U.S. dollar also hit another 11-year high against the Chinese yuan on Friday, while the Sterling slip from a more than three-week high.
Economic Events to Watch Today
Let’s took at these fundamentals
EUR/USD – Daily Analysis
The EUR/USD currency pair has been bound between a narrow range 1.1115-1.1063, Due to Powell’s speech. Today in the early Asian market, the EUR/USD currency pair is currently trading at 1.1068 and failed to close above 1.11 for the seven straight sessions on Friday, and presently hitting a downside break of the 5-day trading level of 1115-1.1063.
The U.S. Federal Reserve Chairman Jerome Powell will deliver the speech today morning at the Federal Reserves annual Jackson Hole symposia, Such as an important meeting of central bankers and economists.
Whereas, the financial markets are ready for a twenty-five-basis point rate cut in September. In the meantime, the markets are also awaiting ECB to deliver large stimulus during the coming month.
Moreover, until now, the European Central Bank dovish expectations have overshadowed the Federal Reserve’s dovish expectations. That is showed that this is the reason behind the EUR/USD decline, which is dropped by more than 180 pips over the last 2.5 weeks. Besides this, also the Federal Reserve has been hesitant to hint aggressive easing.
Therefore, we can say the U.S. Dollar could hit a bearish track if Fed Chairman Powell drop down the political uncertainty, setting the stage for an aggressive rate cut, at his Jackson Hole’s speech which is held on today.
Daily Support and Resistance
S3 1.0987
S2 1.1036
S1 1.1058
Pivot Point 1.1086
R1 1.1108
R2 1.1135
R3 1.1185
EUR/USD – Trading Tips
On Friday, we may have volatility in the market, especially on the back of Fed Chair Powell Speaks and Jackson Hole Symposium, I will consider staying in a sell position 1.1065 to target 1.1030 and 1.1010.
GBP/USD – Daily Analysis
The GBP/USD currency pair step back from the three weeks high a currently trading at 1.2230 due to rising uncertainty regarding Brexit and Tory Brexiteers warned to Prime Minister Boris Johnson.
Such as, the United KIngdom PM Boris Johnson got positive news from the German and French legislators during the last survey to the Europan Union. So, Germany and France are agreed to renegotiate concerning the Irish backstop issue, which is the barrier on the front of holding the Brexit backward sine late,
But on the other side, the separation issue still aggressive because Tory Brexiteers warned Prime Minister Boris Johnson, he said this is not enough for us that you are stripping out the Northen Ireland. Further news came from Tory members, including David Davis, that do not demand responsibility to paying the £39 billion Brexit bill.
On the flip side, Risk sentiment improve due to the key events with the United States ten-year treasury yields increasing more than 2-bais points to 1.637%.
Investors all eyes keep on the upcoming G7 meeting which is held in France on June 24 to 26, where Boris Johnson will meet the United States President Donald Trump for the very first time after becoming the Prime Minister. Moreover, traders also would like to observe how the European Union leaders meet Boris Johnson after the newest warm welcome.
Daily Support and Resistance
S3 1.1883
S2 1.2048
S1 1.2152
Pivot Point 1.2213
R1 1.2317
R2 1.2378
R3 1.2543
GBP/USD – Trading Tips
Consider staying bullish above 1.2170 in GBP/USD with a target of 1.2230 and 1.2280.
AUD/USD – Daily Analysis
The AUD/USD currency pair little changed and fluctuates around the 0.6755, just hit the low of 0.6745 an below the 0.6762 due to soft session overnight with CNY touching a current low against the U.S.Dollar sine 2008.
However, the AUD/USD currency pair repeatedly bounces off 0.6755, ahead of a positive signal regarding the United States and China trade deal and traders keep their eyes on resh clues regarding the Reserve bank of Australia next policy move.
As the United States President Donald Trump’s many tweets hinting the positive developments regarding the trade war sentient with China, cama positive comments from the White House Economic Adviser Larry Kudlow recently. Therefore, investors have become suspicious about the United States-based faith because no Chinese leaders have been upbeat in the meantime.
On the other hand, we will hear from the Reserve Bank of Australia and the Federal Reserve heads very soon, we have an idea that markets are reducing just 3bp of rate ut at the Sep 3 Reserve Bank of Australia meeting and 24bp of the rate cut at the Sep 19 Federal Reserve. These are based on and a terminal rate of 1.03% for the Fed (Fed funds rate currently 2.13%) and a terminal rate of nearly 0.41% by July 2020 (RBA cash rate presently at 1.0%).
Daily Support and Resistance
S3 0.6709
S2 0.6735
S1 0.6746
Pivot Point 0.6762
R1 0.6773
R2 0.6788
R3 0.6815
AUD/USD – Trading Tips
On 4 hour timeframe, the AUD/USD has already violated the symmetric triangle pattern at 0.6765, and now it may go after 0.6740. Violation of 0.6740 can extend AUD/USD towards 0.6715, but be very careful during the New York session as Fed Chair speech may disturb the technical outlook.
All the best!
