On Tuesday during the Asian session, the Japanese yen rose as some investors tempered their optimism about the chances for a quick resolution to the U.S.-China trade war, which boosted so-called risk-off trades.
Well, the greenback came under further pressure versus the yen as a slump in U.S. Treasury yields bestowed some investors still preferred the safety of government debt.
The forex market also reaped some support from a stronger-than-anticipated daily yuan fixing by the People’s Bank of China, which many traders thought as an effort to reduce yuan’s decline versus the dollar.
Economic Events to Watch Today
Let’s took at these fundamentals…
EUR/USD – Daily Analysis
The Fiber pair failed to reach the bullish track due to German GDP data, as of writing, the pair is sidelined near 1.11. Such as yesterday the EUR/USD currency pair dropped by 0.34%, cancelling Fridays bullish outside reversal candle.
Moreover, the range between the ten-year United States and German government bond yields increased from 211 basis points to 221 basis points yesterday.
Whereas that stated, the yields range is below twenty-five points on a month-to-date basis and sixty basis points from the high of 280 points marked in a Nov 2018. However, the EUR/USD currency pair hitting the bearish track on a month-to-date basis and is falling more than 200 points from the level of 1.1318 marked in November 2018.
Meanwhile, we can say the EUR currency could come under pressure if the German GDP figures unexpectedly drop, adding the case for an aggressive rate cut by the European Central Bank.
Daily Support and Resistance
S3 1.0998
S2 1.1057
S1 1.1079
Pivot Point 1.1116
R1 1.1138
R2 1.1175
R3 1.1234
EUR/USD – Trading Tips
Consider staying bullish above 1.1110 in order to target 1.1175 and 1.1220. I’m not expecting heavy moves amid summer holidays.
GBP/USD – Daily Analysis
The GBP/USD currency pair still under pressure due to Brexit deal uncertainty. Today in the early Asian market, the GBP/USD currency pair was still under pressure and seen to hit the bearish track. The pair declines to 1.2210, due to increasing expectation of a No-Brexit deal.
Whereas, another reason behind Monday’s pullback is the increasing uncertainty surrounding the United States and China trade tussle. Besides this, the recent political news from the United Kingdom, leaving the negative impact on the pair.
On the other hand, the risk sentiment also heavies due to multiple news regarding the United States and China trade relationship join market uncertainty.
Technical measures have shifted south, with the Momentum about to break into the bearish area with a definite downward incline. The leading indicator, such as RSI is also heading south at around 53. The decline could expedite on a break below 1.2193, Friday’s low and the immediate support.
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
Consider staying bullish above 1.2221 to target 1.2275. On the lower side, short selling can be done under 1.2210.
USD/JPY – Daily Analysis
The USD/JPY found on the bearish track because of the buyers back in control despite the positive sentiment overnight. As of this writing, the USD/JPY currency pair is -0.21% in the session as traders get the support of a higher price in USD/JPY. The strength of the Dollar was sustained by a rally on wall street, due to less doubt regarding trade wars.
On the other hand, the United States stocks recovered slightly on relief that the United States and China trade tensions didn’t intensify further. During the ending the press conference of the group of 7-meetings in France, President Donald Trump said that he realized that “China wants to make a deal with us very badly”. Also, when trying to get Trump’s ideas about cancelling or delaying tariffs, he replied, “Anything is possible.”
Finally, the United States and Japan trade supported sentiment, intending to sign a pact in September that cuts tariff of Japan on US pork and beef and increases the purchase of wheat and corn. That in replacement for a no change in U.S. tariffs on Japanese cars.
Before Donald Trump comments the USD/JPY currency pair was 105.20, jumping to just below 106 then later stabilise near 106.10. The United States two-year treasury yields increased from 1.45% in the overnight Tokyo trade to 1.55%, whereas the ten-year treasury yields climbed from 1.45% to 1.54%. Both continue strong below early Friday yields.
Daily Support and Resistance
S3 105.66
S2 106.05
S1 106.24
Pivot Point 106.44
R1 106.63
R2 106.83
R3 107.22
USD/JPY – Trading Tips
On the 4-hour timeframe, the USD/JPY has formed series if Doji bear patterns at106.200 which are signalling neutral bias among traders. The 20, 25 and 50 periods EMA are also pushing pair lower, and now USD/JPY may head to target 50% Fibo at 105.400.
Consider staying bearish below 105.950 to target 105.200 while bullish reversal can ve seen around 104.850 regions.
All the best!
