Home Daily Analysis Forex Market Overview Daily FX Brief, July 18 – U.K Retail Sales & G7 Meeting...

Daily FX Brief, July 18 – U.K Retail Sales & G7 Meeting In Focus!


On Thursday, the dollar slid as risk aversion in the broader markets pushed benchmark U.S. yields to a nine-day low. The dollar index versus a peer of other currencies slipped by 0.2% to trade at 97.081. The index had soared to a one-week top of 97.444 the prior day on stronger-than-forecast U.S. retail sales and a drop in sterling.

Economic Events to Watch Today

Looking ahead on the economic events, the market focus stays on the UK Retail Sales and G7 Meetings.

EUR/USD – Daily Outlook

Today in the early market the EUR/USD currency pair hit the bullish track as the U.S. treasury yields continue to lose ground amid increasing concerns of FX inventories by the world’s largest economy.

10- year treasury year benchmark is found at 2.03% the lowest level since July 9, on Wednesday having fallen by 6 basis points. Making it easy for you, the drop in bond yield represents lower demand of dollar as investors expect a rate cut from the Federal Reserve Bank.

Meanwhile, the treasury yield reached under pressure due to possibilities of the U.S. Federal Reserve Chairman Powells cutting the rates by Fifty basis points on the day 31 July raised back to 35%. The U.S. dollar keeps on the defensive today due to the increasing probabilities of an aggressive rate cut by Federal Reserve.

Therefore, the U.S. Dollar bulls will probably continue to stay on the sidelines, supporting the EUR/USD pair to reach back to the twenty-one-day moving average, presently trading at 1.1286.

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 and bullish above 1.1240 to target quick 50 pips.

GBP/USD – Daily Outlook

The Cable came out of heavy selling pressure to violate the 1.2450 resistance area. The next downward targets can be near the 1.2490 and 1.2340 levels.

British retail sales bounced surprisingly in June, according to official data that may lift the belief that the economy will sidestep a slowdown in the second quarter.

Monthly retail sales volumes surged 1.0%, the Office for National Statistics said, quite above all estimates in a Reuters survey of economists that had led to a 0.3% dip. Compared with June 2018, businesses were higher by 3.8%, again more robust than all estimates.

Daily Support and Resistance
S3 1.2198
S2 1.232
S1 1.2365
Pivot Point 1.2441
R1 1.2486
R2 1.2563
R3 1.2685

GBP/USD – Trade Idea
The GBP/USD has crossed over 1.2450 resistance area and it’s very likely to go after 1.2500. Therefore, I would suggest staying bullish until 1.2490. I will also look for adding more buying if the Cable retraces back to 1.2441 level.

USD/JPY – Daily Outlook

The USD/JPY currency pair is currently trading at 107.88, and have been fluctuating between a range of 107.85 and 107.98. A disappointing performance in international stocks amid off-beat geopolitical turbulence and some soft economic data.

In short, the USD/JPY currency pair dropped 0.2% to 107.70 as the Japanese yen picked some safe-haven demand amid declining Asian stocks markets.

Daily Support and Resistance
S3 107.22
S2 107.69
S1 107.96
Pivot Point 108.17
R1 108.44
R2 108.65
R3 109.12

In the 4 hours chart, the price is below congestion of moving averages, although technical indicators lack directional strength, with the RSI directionless around 53 and the momentum indicator easing within positive levels. On the lower side, the immediate resistance stays at 107.800 along with support around 107.500 and 107.200. Good luck!


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