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Daily FX Brief, July 09 – Top Trade Setups In Forex, Fed Chair Speech In Focus!

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The U.S. dollar firmed as odds for interest rates cuts dropped. The dollar index edged higher by 0.1% on the day to 97.37. Meanwhile, investors await Federal Reserve Chairman Jerome Powell’s Congressional testimony on monetary policy on Wednesday.

The euro slid 0.1% to $1.1215. Official data revealed that German industrial production rose 0.3% on month in May (vs +0.4% forecast).

The Sterling plunged by 0.1% to $1.2515, while USD/JPY elevated 0.2% to 108.72. Meanwhile, USD/CAD surged over 0.2% to trade at 1.3103, rebounding for a second day.

Economic Events to Watch Today

 

 

EUR/USD – Daily Analysis

The EUR/USD pair trades below 50 days moving average ahead of Fed Chair Powell’s upcoming speech. The EUR/USD pair touched the key support level of 1.1200 due to stronger buying in the U.S. Dollar. The U.S. Federal Reserve Chairman Jerome Powell’s is set tp speech in front of Congress, and he may speak about interest rates, splitting clues about next rate hikes.

Yesterday, the EUR/USD pair closed under 1.1223, marking a bearish trend of the significant 61.8% Fibonacci retracement of the rally from 1.1107 to 1.1412. Moreover, the sellers have successfully ruptured the fifty-day moving average, the EUR/USD pair now touched the resistance at 1.1237.

Overall, the Euro currency is on the defensive track due to upcoming Powell’s speech due at 12:45 GMT. Expectations are on the peak for the probability that the U.S. Federal Reserve Chairman Jerome Powell’s will keep the rate unchanged due to the recent surge in the NFP data.


 

Daily Support and Resistance
S3 1.12
S2 1.1208
S1 1.1213
Pivot Point 1.1216
R1 1.1221
R2 1.1223
R3 1.1231

From a technical viewpoint, the 1.1200 handle corresponds with 23.6% Fibo levels of the 1.1570-1.1107. Sustained weakness below the mentioned support will reinforce the recent bearish bias and turn the pair vulnerable to accelerate the slide further towards the 1.1130-25 intermediate support en route yearly lows – closer to the 1.1100 round figure mark.

Thus, consider keeping an eye on 1.12000 to stay bearish or bullish above with level with a 50 pips take profit on both sides.

GBP/USD – Daily Analysis

The GBP/USD pair is looking to break below the 1.2500 level due to Brexit uncertainty. The British pound dropped to a sixth-month low amid concerns regarding the threat of a no-deal Brexit under the next prime minister and a deteriorating UK marketplace.

The survey from the British Retail Consortium reported a fresh sign of economic instability as sales at British retailers mounted at their slowest average movement on record over the past year. The GBP/USD pair has spent the day consolidating losses just above and below the 1.2500 figure, confined the day to a 40 pips’ range.


 

Daily Support and Resistance
S3 1.2496
S2 1.2503
S1 1.2508
Pivot Point 1.251
R1 1.2515
R2 1.2518
R3 1.2525

The GBP/USD pair is looking to continue its drop according to technical indicators in the 4 hours chart. These technical indicators keep on developing below a bearish 20 SMA, which prolongs its sell-off below the immediate support level of 1.2500. Further declines are to be expected on a break below 1.2440. Let’s stay bearish below 1.2500 to target 1.2465 today.

USD/JPY – Daily Analysis

The USD/JPY pair has been trading bullish in the wake of a stronger dollar and diminished sate haven appeal. The USD/JPY has been trading higher in the opening hour of Tokyo, prolonging its profits from the late June 106.78 bottom’s growing trend to a fresh high in July of 108.89.

The USD/JPY pair is now looking towards 109.100 as a next resistance level. On the other hand, the U.S. dollar is getting stronger as investors remain optimistic about the U.S. economy, dialling down the aggressive rate cuts expectations by the Federal Reserve this month.


 

Daily Support and Resistance
S3 108.61
S2 108.68
S1 108.7
Pivot Point 108.74
R1 108.77
R2 108.81
R3 108.87

I’m going to keep an eye on 108.600 as the market can stay bullish over and bearish below this level. On the lower side, support can be found at 108.050 along with resistance at 108.600. I’m not expecting any breakouts in the wake of thing liquidity in the market. All the best!

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