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Daily FX Brief, Aug 29 – Top Trade Setups In Forex, Brace for U.S. Prelim GDP!

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The U.S. dollar gained traction on Wednesday, with the ICE Dollar Index rising 0.2% on the day to 98.19. Later today, the U.S. Commerce Department will release the second readings of annualised GDP in the second quarter (vs. +2.0% on quarter expected).

The British pound slid 0.6% to $1.2218. U.K. Prime Minister Boris Johnson was granted permission by the Queen to prorogue the parliament on Sept. 12 for five weeks, a move which could force through a no-deal Brexit.

The euro edged down 0.1% to $1.1085, posting a three-day losing streak. The German GfK Consumer Confidence Index was unchanged at 9.7 for September (vs. 9.6 expected). 

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 bullish track on the day, and currently trading at 1.1083, due to German jobs data and inflation data. On the flip side, a close below previous Friday low of 1.1052 could invite greater selling pressure.

We will likely get clues of breakout (above 1.1164 or below 1.1052) from key German data because it is due to release today.

The German labour market figures for the current month are due to release on the day at 06:00 GMT. Moreover, the seasonal unemployment rate is forecasted to continue stale at 5% during this month, according to forecasting 4,000 jobs will be added in this month, after a 1000 addition in July.

Meanwhile, the August inflation data will be released at 12:00 GMT. The consumer price index (CPI) is likely to increase by 1.5% year on year, according to forecasting, but in July, it was increased by 1.7%.

On the other hand, the German economy continually facing slowdown fears is generally accepted by now. Besides this, the markets are also reducing the aggressive rate cut by the Europan Central Bank in the coming month.


Whereas, there is a lot of room for a rally in the EUR on the back of upbeat data. Probably the EUR/USD currency pair will be dropped below 1.1052 if German inflation data is below expectations, strengthing dovish European Central Bank expectations.    

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

At the moment, the EUR/USD pair is found on the losses track, showing the marginal losses today, and the pair is trading at 1.1088. A follow-through weakness below the 1.1075 horizontal support will reaffirm the negative outlook. If that happens, it will make the pair vulnerable to accelerating the downfall back towards challenging the key 1.10 psychological mark, with some intermediate support near yearly lows – around the 1.1025 zones. Consider staying bullish above 1.1110 to target 1.1175 and 1.1220. Whereas selling can be seen n below 1.1100 until 1.1050. 


USD/JPY – Daily Analysis

Today in the early Asian market, the USD/JPY currency pair increase overnight from 105.70 to just above 106 and presently trading downward -0.16% between the range of 105.93 and 106.12 due to markets remain to consolidate after an unexpected rally in stocks on wall street.


On the other side, the Fed president Daly gave a warning not to keeping interested rates low for a very long time. He also said there won’t be any free lunch. 

At the Brexit front, the Japanese Yen is likely to be a factor depending on the outcome. Such as the recent one with the United Kingdom Prime Minister Boris Johnson receiving approval yesterday to close the UK Parliament from 12 September to 14 October. 

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

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 pushing pair higher now, and USD/JPY may head to target 106.400. Consider staying bearish below 105.81 to target 105.200 while bullish reversal can be seen above 105.81 and 106.350 regions.


GBP/USD – Daily Analysis

Today in the early Asian market, the GBP/USD currency pair hit the bearish track and declines to 1,2200 due to renewed fears and risks regarding the no-Brexit deal because of the United Kingdom Prime Minister Boris Johnsons ability to take the Queen’s permission to prorogue the British Parliaments. 

Such as the United Kingdom Prime Minister Boris Johnson received approval yesterday to close the parliaments from 12 September to 14 October. Meanwhile, the politicians across the board trying to bock odds of a soft Brexit.

Anywhere, no significant updates were available from the UK PM’s Chief Brexit Adviser David Frost despite one European Union (EU) diplomat detected by the Reuters as lacking expectations of any breakthrough.


The U.S. Dollar weakness is also a reason that the GBP/USD currency pair did not fall. That was due to fresh fears an uncertainty surrounding the United States and China trade war. Besides this, the market uncertainty is the Federal Reserve Chairman speaks, Geopolitical tensions about Honk Kong and also the expectations of the easing from the people’s bank of china.

On another side, the United States 2nd estimate of the 2nd quarter (Q2) 2019 Gross Domestic Product (GDP), Personal Consumer Expenditure Prices and Pending Home Sales data. The estimates suggest a soft 2.0% annualised GDP versus 2.1% with housing market data expected to flash no growth against 2.8% previous increase.

Daily Support and Resistance

R3: 1.2483

R2: 1.2351

R1: 1.2283

Key Trading Level: 1.2219

S1: 1.2151

S2: 1.2088

S3: 1.1956

GBP/USD – Trading Tips

GBP/USD remains below six-week-old descending trend-line with bearish MACD signal. In a case prices slip below 1.2150, a 13-day old rising trend-line at 1.2113 and August 20 low near 1.2064 will please sellers ahead of pushing the GBP/USD further towards 1.2000 round-figure. Consider staying bullish above 1.2219 to target 1.2283. On the lower side, short selling can be done under 1.220 until 1.2170 and 1.2160. 

All the best!

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