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Daily FX Brief, July 17 – Brace Yourself to trade Series of Inflation Rates!

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On Wednesday, the dollar was firm after optimistic U.S. data baked expectations of aggressive policy easing by the Federal Reserve later this month, whereas the struggling Euro and Sterling also extended additional boost to the greenback.

Economic Events to Watch Today

Today, investor’s focus stays on the inflation reports which are due to be released by the United Kingdom, Canada, and Eurozone. Let’s take a look…

GBP/USD – Daily Outlook

On Wednesday, the Cable remains under heavy selling pressure near 27-month lows. The next downward targets can be near the 1.2390 and 1.2340 levels.

Sterling dived to lows last traded more than two years ago, as markets reacted to the increasing risk that Boris Johnson’s Brexit policy could lead Britain to a no-deal exit from the EU within months.

UK Inflation

At 8:30 GMT, the UK’s Consumer Price Index has been steady at 2% in May – hit on the BOE’s target. The same level is forecasted now. As stated earlier, without a decision on Brexit, the central bank is unlikely to act.



 

Daily Support and Resistance
S3 1.2196
S2 1.2318
S1 1.2362
Pivot Point 1.244
R1 1.2484
R2 1.2562
R3 1.2684

GBP/USD – Trade Idea

The 50 SMA is crossing below the 100 SMA which can be seen as bearish. Immediate resistance can be seen at 1.2440 and 1.2480 and support at 1.2390 and 1.2340. Consider staying bearish below 1.2440 today.

EUR/USD – Daily Outlook

The EUR/USD pair hit the lowest level below 1.1245 since last Wednesday, whereas strengthening U.S. dollars regains bullish momentum. During the previous session, the EUR/USD currency pair fell from 1.1260 to trade right above 1.1200 and hitting the lowest level since last Wednesday. The pair presently trading at 1.1212 and has been fluctuating between the range of 1.1200 and 1.1215.

Unexpectedly stronger retail sales that showed a 0.4% gain kept the U.S. dollar supported, especially after an unexpected GDP data from China which diverted investors attention from Gold to U.S. dollar.

The greenback surged due to unexpected stronger June U.S. retails sales data that decreased the possibility of the Federal Reserve cutting interest rates by 50 basis points in coming months.

Meanwhile, Federal Reserve Chairman Powells expect solid progress in economic growth along with a steady labour market. Moreover, Powells also informed that the central bank is ready to act as suitable for increased uncertainties.

The EUR/USD pair broke beneath the 23.6% retracement of the newest daily decay after failing to exceed the 38.2% retracement of the same slide in the last few days. As we head into the European session trading, the EUR/USD is likely to face support around 1.1200 and 1.1106.

In the 4 hours chart, the pair is currently producing below all of its moving averages, with the 20 SMA becoming bearish beneath the longer moving averages in the 1.1250 regions.

Technical indicators have lost their bearish strength but hold around their daily lows, also near oversold levels. A breakthrough the mentioned monthly low should open doors for a retest of the year bottom at 1.1106, while the bearish pressure could ease on a recovery above 1.1245, the mentioned Fibonacci resistance.



 

Daily Support and Resistance
S3 1.1105
S2 1.1165
S1 1.1188
Pivot Point 1.1225
R1 1.1248
R2 1.1285
R3 1.1345

EUR/USD – Trade Idea

Consider staying bearish below 1.1220 and bullish above 1.1185 today. All the best!

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