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Daily FX Brief, Aug 28 – Top Trade Setups In Forex, Eyes on WTI Inventories!

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A day before, the global stock whipsawed initially jumping higher but then dipping on the back of tweets from an editor at the Chinese state news outlet. While the market continues to follow tweets from U.S. President Trump. The pressure was back on the dollar on Wednesday, as nagging fears, the Sino-U.S. trade war will drag on and severely hurt economic growth led to yet another slide in U.S. bond yields.

Economic Events to Watch Today

Let’s took at these fundamentals…

 


EUR/USD – Daily Analysis

Today in the early Asian market, the EUR/USD currency pair hit the bearish track for the 3rd straight day despite the United States treasury yields curve inversion and the slide in the decline in the United States and German yield spread to the lowest level since the 2018 1st quarter.

Yesterday, the United States treasury curve inversion increased with the range between the 2-year and ten-year treasury yields dropping to five-basis points, the lowest level since 2007.

Besides this, the range between the United State and German ten-year bond yields both are dropped to eighteen-month-low of 218 basis points.


Such as, the EUR//USD currency pair was flashed red yesterday, fell 0.10% and close under 1.11. the market movement leaving the clue that the trader’s focus has shifted to the aggressive rate cut view by the European Central Bank which is due next month.

As of writing, the EUR currency could be getting a deeper decline today. Meanwhile, the EUR/USD pair could be touching the August 23 low of 1.1052 if the German Consumer Confidence issues well below the estimates of Consumer Confidence (Sep) prints well below the consensus estimate of 9.36. The data is due to release at 06:00 GMT.

Daily Support and Resistance

S3 1.1037

S2 1.1068

S1 1.108

Pivot Point 1.1098

R1 1.111

R2 1.1128

R3 1.1159

EUR/USD – Trading Tips

On the other hand, an above estimates data could put a buying below the EUR. At the technical front, the pair would hit the bullish track if the pair gets acceptance over the 6 August high of 1.1250. As of writing, the pair found on the losses track, showing the marginal losses today, and the pair is trading at 1.1088. Consider staying bullish above 1.1110 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 breaks the four-day upward streak and hit the bearish track due to expectations of an early election at home and challenges to the United Kingdom Prime Minister Boris Johnson warn the GBP buyers because of Brussels survey by the CHief Brexit Adviser. As of writing, the figures dropped to 1.2272.

Such as the GBP/USD prices reached monthly high yesterday due to the parliament member of the cross-party promised to oppose the no-Brexit deal.

On the flip side, the market focus was on the round that the United Kingdom is going for elections soon after the British Fiance Minister’s office refused his speech before 24 hours of the release of the new plan. Moreover, the Chancellor Sajid Javid will release a new spending plan on the 4 September.


At the U.S. Dollar front, greenback getting support due to the upbeat data and shortage of market response to the United States President Donald Trump’s criticism of the Federal Reserve policies. Whereas, the risk sentiments still complicated with the United States 2-year treasury yields crossing the ten-year ones an indicating an international slowdown.

Daily Support and Resistance

S3 1.2066

S2 1.2167

S1 1.2226

Pivot Point 1.2268

R1 1.2328

R2 1.237

R3 1.2471

GBP/USD – Trading Tips

Pair continues to trade sideways within a trading range of 1.2280 – 1.2210 due to lack of fundamentals. The trading sentiment is neutral, so sideways trading may be experienced today. Consider staying bullish above 1.2275 to target 1.2328. On the lower side, short selling can be done under 1.2270.


USD/JPY – Daily Analysis

Today in the early Asian market, the USD/JPY currency pair is trading at 105.73 and the pair is stuck between in a narrow range of 106.65 and 105.79, as of writing the USD/JPY currency pair on the stable track today.

Such as, all traders are still fearful due to the global recession and the consequences of the trade war between the United State and China. As for data, the Conference Board’s consumer confidence index far outpaced consensus forecast at 135.1 in August from 135.8, a resilient reading in the face of intensifying trade anxieties and volatile markets.

Certainly, the lower United States stocks and decline in treasury yields with the investor’s shortage of trust for development in the United States and China trade discussions increase the safe-haven demand. The United States’ two-year treasury yields currently fluctuating between the range of 1.51% an 1.55% whereas the ten-year bond yield dropped from the 1.52% to 147%.


 

In the mean-time, markets still expecting reduction around twenty-five-basis points of rate cut which will be done in the coming month.

On the other hand, all eyes turn back on the Federal Reserve, but those traders who were expecting the greenback weakness due to Federal Reserve cutting interest rates have so much disappointed so far.

Daily Support and Resistance

S3 104.85

S2 105.33

S1 105.55

Pivot Point 105.81

R1 106.03

R2 106.29

R3 106.77

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!

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