Home Daily Analysis Forex Market Overview Daily FX Brief, July 11 – U.S. Fed Shakes The Market –...

Daily FX Brief, July 11 – U.S. Fed Shakes The Market – What’s Next?


What a day it is! The U.S. central bank’s chairperson Jerome Powell shook the market by taking a U-turn on its hawkish policy stance. The dollar slumped to a five-day low on Thursday after Federal Reserve Chair Jerome Powell held the bar open for U.S. interest rate cuts, though traders were cautious of selling dollars aggressively till a policy report later this month.

For now, the investors focus shifts to the series of CPI (consumer prices index) from the eurozone and the U.S. Here’s what to expect from the market…

Economic Events to Watch Today

EUR/USD – Daily Analysis

The EUR/USD currency pair touched the bullish level following dovish testimony from US Federal Reserve President Jerome Powell. The EUR/USD pair is maintaining the bullish bias ahead of the European session due to Powell’s speech. Asian investors have already processed the recent remarks, however, the European investors may bring an additional bullish streak for the EUR/USD pair.

The EUR/USD currency pair is presently trading above the 1.1265, the level which marks the convergence of key technical lines like the 4-hour chart 50- and 200-candle moving averages and the trendline connecting May 30 and June 18 lows.

Whereas, the U.S. dollar is still on the lower side due to the expectations of an aggressive July rate increased after Federal Reserve bank Chairman Powell’s dovish speech. Presently the market is pricing 30 basis points of easing on 31 July.

Daily Support and Resistance
S3 1.112
S2 1.118
S1 1.1218
Pivot Point 1.1241
R1 1.1278
R2 1.1302
R3 1.1362

EUR/USD – Trade Tip

On the technical front, the EUR/USD has come out of the 1.1240 resistance zone, to trade at 1.1270. The immediate resistance stays around 1.1285 and the pair has the potential to go after 1.1318 on the violation of 1.1285 resistance. Consider staying bullish above 1.1240 to target 1.1285 and 1.1315 today.

GBP/USD – Daily Analysis

The GBP/USD currency pair is on the recovery track as all eyes stay on UK politics, US CPI and Fed speech. The dollar’s explicit vulnerability has boosted the GBP/USD pair recovery to the 1.2500 level, with the pair hitting a daily high of 1.2520 before initiating correction.

Besides the weaker U.S. dollar, the Sterling also gained bullish momentum upon stronger GDP figures. The Office for National Statistics (ONS) published that the UK GDP climbed by 0.3% versus the previous month when stoppages at car factories ended in negative growth of 0.4%.

Nevertheless, some economists said England stays on the cusp of its first quarterly contraction since 2012 amid a mass slowdown in the world economy and the growing threat of a no-deal Brexit.

From the trading aspect, persistent uncertainty surrounding the United States and China trade tension and the growth of the geopolitical tensions between the US and Iran transmit negative influence on the U.S. Dollar. Eventually, it’s helping the GBP/USD pair to rise after staying bearish for a long time.

Daily Support and Resistance
S3 1.2336
S2 1.2414
S1 1.2461
Pivot Point 1.2491
R1 1.2539
R2 1.2569
R3 1.2646

GBP/USD – Trade Tip

Technically, the GBP/USD pair begins recovery on the back of a weaker dollar. The pair have just corrected the 23.6% retracement of its latest intraday slip, unable to maintain gains above it. In the 4 hours chart, it’s hanging a few pips above its 20 SMA, while the 100 SMA meets with the 61.8% retracement of the same slump at 1.2620

You can also notice that the GBP/USD has violated the bearish channel at 1.2480 which is one of the major indications of a bullish bias among traders. For the moment, the cable trades at 1.2535 where it’s likely to face resistance at 1.2540. The bullish breakout of this level can extend the buying trend until 1.2595.

Consider keeping an eye on 1.2540 to stay bearish under or bullish above this level to target 1.2590 on the upper side. While the bearish target stays around 1.2500 and 1.2480 today. Good luck!



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