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Daily FX Brief, July 23 – Top Forex Trade Setups to Watch on Tuesday!

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On Tuesday, the U.S. dollar continues to trade lower in the wake of dovish Fed sentiments. Federal Reserve, the U.S. central bank is widely anticipated to cut interest rate at its meeting ending July 31. Whereas, the sentiments for a more than 50-basis point cut have diminished amid mixed signals from Fed policymakers. What’s next on the cards today? Let’s find out…

Economic Events to Watch Today

 

 

EUR/USD – Daily Outlook

The EUR/USD currency pair on bearish track as the German yields slide ahead of ECB. During the early Asian session, the common currency pair EUR/USD currency pair dropped below 1.12 & could increase losses into Europe, due to the dovish European Central Bank expectations and secondly the instability in 10-Year Bond Yields of German.

At the starting of the week, the 10-years government bond yields of Germany dropped four basis points to -0.345, to drop more than 10-basis points in the early five days.

Meanwhile, the US Dollar may remain supported on lower odds of aggressive easing by the Fed. President Trump ramped up pressure on the Fed by tweeting the need for immediate rate cuts.


 

 

Daily Support and Resistance
S3 1.1175
S2 1.1194
S1 1.1202
Pivot Point 1.1214
R1 1.1221
R2 1.1233
R3 1.1253

EUR/USD – Trade Idea
On the technical side, the EUR/USD was supported above 1.1200, the triple bottom level on the hourly timeframe. Above this, the EUR/USD had the potential to go after 1.1240, but lately, the support level got violated due to weakening euro. Sellers are dominating the market.

The EUR/USD pair may find next support around 1.1170 and 1.1164 today. Let’s keep an eye on 1.1230 to stay bullish and bearish below this level today.

GBP/USD – Daily Outlook

The GBP/USD currency pair slipped lower due to no-deal Brexit fears, & U.S. dollar strength on trade leaving an impact on the pair. Today during the early Asian trading, the GBP/USD currency pair dropped below 1.2460 due to concerns over the downside growth risks arising from the no-Brexit deal situation, given the candidate Boris Johnson wins.

Meanwhile, the weekly tension surrounding the United Kingdom’s leadership struggle. Finally, the day has come when British conservative will declare the outcome of their next PM leader which announcement is held on Tuesday at 10:45 GMT.


 

Daily Support and Resistance
S3 1.2369
S2 1.2425
S1 1.2451
Pivot Point 1.2481
R1 1.2507
R2 1.2537
R3 1.2593

GBP/USD – Trade Idea
A day before, the GBP/USD was facing solid support at 1.2490, which marked the 38.2% Fibonacci support area. However, the support level got violated due to a stronger dollar and Brexit related uncertainties. Now the Cable is likely to extend bearish rally until 50% and 61.8% Fibo levels of 1.2470 and 1.2450 respectively.

Consider staying bullish above 1.2440 to target 1.2475. While bearish entry can be taken below 1.2485 to target 1.2450 today.

USD/JPY – Daily Analysis

The USD/JPY currency pair hit the bullish track to 108.00 despite risk-sensitive headlines. Today in the early market, the USD/JPY currency pair hit the bullish mark and trading around the 108.00 having gained 0.2% despite recent risky news from the Bank of Japan and South Korea.

South Korea recently hit a warning shot at a plane of Russian military whereas Governor of the Bank of Korea Lee Ju-you supports repeatedly for failing monetary policy considering trade tussle with Japan.

At the positive front, the President of the U.S. Donald Trump’s willingness regarding giving the selling license of Chinas Huawei brightens trade sentiment for the United States and Chinas trade meeting, which is scheduled at Beijing.

The US 10-year treasury yields an increased of approximately 1.5 basis points to 2.057% by the press time.


 

Daily Support and Resistance
S3 107.37
S2 107.64
S1 107.77
Pivot Point 107.9
R1 108.03
R2 108.17
R3 108.43

USD/JPY – Trade Idea
Recalling our previous update, the idea was to stay bullish over 108 trading level as this level was extended by bearish trendline. It was keeping the USD/JPY lower, below 108.

USD/JPY is trading inline with our forecast shared on Monday. A bullish breakout of 108 is extending USD/JPY moves towards 108.350. I’m sticking with the same plan of staying bullish over 107.900 and to target 108.350 today. All the best and have a profitable day!

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