Home Daily Analysis Forex Market Overview Daily FX Brief, July 03 – Trade Setups in Forex, Risk-Off Sentiment...

Daily FX Brief, July 03 – Trade Setups in Forex, Risk-Off Sentiment Plays!


The U.S. dollar grappled as the hazy concerns for any near-term Sino-U.S. trade deal renewed safe-haven demand, driving the U.S. bond yields to their weakest levels since late 2016. The White House trade advisor shifted the Risk Sentiment Off to On after he said trade talks are going in the right direction, but it will take time to obtain the appropriate deal.

Economic Events to Watch Today

EUR/USD – Daily Analysis

The euro sank 0.7% to $1.1287 after the European Central Bank’s chief economist Philip Lane pointed out that ECB “can add additional monetary accommodation if it is needed”. On the other hand, the European economic figures were mixed.

Such as, the final readings of the June Markit eurozone PMI which posted at 47.6 (vs. 47.8 as previously expected), while the jobless rate plummeted to 7.5% in May (vs. 7.6% forecast in April), the lowest level since July 2008. Today, the market focus is likely to stay on Services PMI data from France, Germany, and Spain.

Lastly, the Central banks expect that the Sino-US trade war may intensify the trade war situation at any time, therefore, offering U.S. dollars some support today.


Daily Support and Resistance
S3 1.1277
S2 1.1283
S1 1.1286
Pivot Point 1.1288
R1 1.1292
R2 1.1294
R3 1.1299

The EUR/USD is trading slightly bearish today at 1.1275, losing around -0.16% for today. The exciting thing is, the EUR/USD pair seems to violate the double bottom support. A bearish breakout of 1.1275 level could bring a sell-off in EUR/USD until 1.1245.

GBP/USD – Daily Analysis

The British pound dropped 0.4% to $1.2644 as the Markit U.K. Manufacturing PMI dwindled to 48.0 in June (vs. 49.5 forecasts) from 49.4 in May, the lowest since February 2013.

Today in the early market, the pair GBP/USD slipped due to nonaggressive and sluggish remarks from the Bank of England. Traders seem to take a breather near 1.2590 despite having a drop in the U.S. dollar.

The last stage of the Conservative leadership voting has now begun with Boris Johnson facing off with Jeremy Hunt. The two are expected to face one another in several hustings around the country, after which 160k Conservative party affiliates will choose which of them will go on to be the next Prime Minister of the U.K. Prime minister Theresa May is excepting that Boris Johnson will maintain to Brexit. Let’s wait and watch.

The latest news about the U.S. trade relationships with the European Union and China have not been favourable to market sentiment continuously weighing over the U.S. Dollar.

S3 1.1108
S2 1.1116
S1 1.1121
Pivot Point 1.1124
R1 1.1129
R2 1.1132
R3 1.114

On the 4 hours timeframe, the GBP/USD has violated the 1.26600 triple bottom support level, which is now providing a substantial hurdle to bulls. The 20, 25, and 50 periods EMA are also suggesting bearish bias. Consider staying bearish below 1.2620 today as the GBP/USD has the potential to go after 1.2620 and 1.2600 today.

USD/JPY – Daily Analysis

The USD/JPY pair opened the weekend with a massive gap, suggesting a strong bullish bias. Recently, the Japanese yen managed to cover the gap falling from 108.400 to a 108.500 support level.

The drop came in response to haven appeal and rising government bond yields, amid renewed fears of a global downturn sending investors back into safety. Anxieties initiated by U.S. threat to inflict further tariffs on E.U.’s imported goods, sent German bond yields to record lows, and U.S. Treasury yields to multi-year lows, with the yield on the benchmark 10-year note breaking below 2.0%.

Daily Support and Resistance
R3: 109.02
R2: 108.71
R1: 108.57
Key Trading Level: 108.39
S1: 108.25
S2: 108.08
S3: 107.77

Based on the initial price action and the prevailing price at 107.555, the trend of the USD/JPY for the rest of the session is likely to be determined by trader reaction to the support level of 107.525.

Staying above 107.525 and supporting the move will signal the return of buyers. While taking out 107.525 and a step below indicate the presence of sellers. The next target is the short-term stays at 107. All the best!


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