The US dollar index, or DXY, concluded last week in negative territory, down 0.96%. Last week July’s FOMC, Federal Reserve officials observed their interest-rate cut previous month as protection against too-low inflation and the risk of a broader slowdown in business investment arising from risk over US President Donald Trump’s trade war.
The dollar is finally making some bullish correction after speculators trimmed the net long (bullish) US Dollar bets to the lowest level since July 2018, during the week that ended on Aug. 20.
Economic Events to Watch Today
Let’s took at these fundamentals…
EUR/USD – Daily Analysis
The EUR/USD Currency Pair HIt Bullish Track Today And All Focus On German IFO Data.
Today in the early Asian market, the EUR/USD currency pair hit the bullish market of 1.1164 and currently trading at 1.1142. The bullish close, however, probably will continue elusive if the Ifo German data issues below forecasts due to intensifying trade war tensions.
During Friday the EUR/USD currency pair climbed 0.53%, covering Thursdays high and lows. Essentially, such as the pair performed a bullish outside day candle, which is broadly considered an early indication of a potential bearish-to-bullish trend change.
Moreover, the buyers could face a difficult time, forcing a beak above 1.1153 due to intensifying trade war tensions between the United States and China. Last Friday, President Donald Trump Tweeted that Furthur tariff on Chinas goods which will start from 1 September and 1 October.
On the other hand, the IFO German data scheduled for publishing at 08:00 GMT will give insight into the newest thinking regarding German executives. Notably, according to forecast Busines Climate will fall to 95.1 from July’s print of 95.7.
Daily Support and Resistance
S3 1.0912
S2 1.1014
S1 1.1078
Pivot Point 1.1116
R1 1.118
R2 1.1217
R3 1.1319
EUR/USD – Trading Tips
On Monday, the EUR/USD surged dramatically to violate the sideways channel of 1.1100 – 1.1065. Since the EUR/USD is already trading above 1.1100, this level is likely to work as a support. Therefore, consider staying bullish above 1.1100 with a stop loss below 1.1060 and target of around 1.1140 and 1.1165.
GBP/USD – Daily Analysis
At the Starting of the week, the GBP/USD currency pair failed to maintain early day recovery, and buyers seem to step back due to the intensifying trade tension between the US-China and uncertainty increased into no-deal Brexit.
As of writing, the GBP/USD currency pair presently trading near 1.2272 ahead of Monday’s London open.
After came the announcement from the United States regarding additional tariffs on other Chinese Exports Items, the United States and China increase the fears of international economic slowdown due to the trade tussle between the two largest economies in the world. Besides this, the Greenback dropped across the board last Friday.
On the flip side, the dovish statement from the bank of England and the Federal Reserve chiefs, at the Jackson Hole Symposium last Friday, appears to have offered a path to the GBP/USD pairs ahead of the trade news that crossed wires during the day.
Meanwhile, the traders keep their eyes on the fresh hint regarding trade and Brexit.
Daily Support and Resistance
S3 1.2054
S2 1.2157
S1 1.2224
Pivot Point 1.2261
R1 1.2327
R2 1.2364
R3 1.2467
GBP/USD – Trading Tips
Traders long this market, however, face considerable resistance at the 1.23 handle, a daily channel resistance (taken from the high 1.3176) and weekly resistance at 1.2329. The main catalyst behind the latest run higher comes on the back of prospects of a Brexit-deal breakthrough. Consider staying bullish above 1.2245 in GBP/USD with a target of 1.2290 and 1.2330.
AUD/USD – Daily Analysis
The AUD/USD currency pair found on the bearish track low of 0.6703 after the starting the week with the bearish gap. Australian traders reply to macro risk-off due to the United States and China trade tussle intensified in recent days. Events such as China announcing new tariff on the United States goods worth of $75 billion, and in the return of this, United States increasing the tariff on $500 billion worth of Chinese goods broadcasted last Friday.
Besides the tariff hike, the United States President Donald Trump also push US organisations to pull their production factories out of China.
On the other hand, the Jackson Hole Symposium reduced the bid due to the United States Federal Reserve Chairman Jerome Powell focused economic uncertainty. Meanwhile, the Reserve Bank of Australia Governor Philip Lowe asked for the government guide to stimulate development.
Daily Support and Resistance
S3 0.667
S2 0.6713
S1 0.6732
Pivot Point 0.6755
R1 0.6774
R2 0.6797
R3 0.6839
AUD/USD – Trading Tips
The AUD/USD slipped dramatically from 0.6770 to 0.6690 amid weakness in Aussie. Investors started selling off Aussie over an escalating trade war between the U.S. China. On the 4 hour timeframe, the AUD/USD has already violated the symmetric triangle pattern, which now extends resistance at 0.6770.
Consider staying bearish below 0.6770 to target 0.6730 and 0.6700. All the best!
