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Daily FX Brief, July 24 – Top Forex Trade Setups Ahead of ECB Meeting Tomorrow!


On Tuesday, the dollar index continued gaining to a five-week high, making gold expensive for foreigners. The European Central Bank is supposed to at least offer a nod to the easier policy at its meeting on Thursday, while the U.S. central bank is broadly expected to reduce interest rate at its meeting ending July 31.

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U.S. stocks posted modest gains, lifted by shares in Semiconductors & Semiconductor Equipment (+2.12%), Technology Hardware & Equipment (+1.62%), Software & Services (+0.76%) sectors.

The Dow Jones Industrial Average edged up 17 points (+0.1%) to 27171, the S&P 500 added 8 points (+0.3%) to 2985, and the Nasdaq Composite was up 57 points (+0.7%) to 8204.

The U.S. Dollar stabilized on Monday, with the ICE dollar index climbing 0.2% on the day to 97.32.

Economic Events to Watch Today



EUR/USD – Daily Outlook

The EUR/USD currency pair is looking south with a flag breakdown on the technical charts. Today in the early market the EUR/USD currency pair trading at 1.1144, hit the bearish track of the lowest level since 31 May, confirming a bear flag breakdown, a continuation pattern that usually accelerates the preceding bearish move.

The Euro currency was 0.05% lower at $1.1145 after reaching $1.1143, its lowest since May 31. It had already dropped more than 0.5% yesterday and dropped nearly 0.7% so far this week.

As you know, the common currency dropped as the markets have pared their odds that the central bank will aggressively cut rates by 10-basis points during the European central bank meeting which is held on Thursday, moreover, the market continually expects dovish guidance.

Whereas, the common currency could decrease to 1.1107, according to the flag breakdown, if the German PMI matches or prints well below estimates, supporting the case for ECB rate cut.


Daily Support and Resistance
S3 1.1064
S2 1.1115
S1 1.1133
Pivot Point 1.1165
R1 1.1183
R2 1.1215
R3 1.1265

EUR/USD – Trade Tips

The EUR/USD pair has traded exactly as we forecasted, hitting both of our levels of 1.1170 and 1.1164 today. Let’s keep an eye on 1.1165 to stay bullish and bearish below this level today.

GBP/USD – Daily Outlook

On Tuesday, the GBP/USD currency pair is trading at 1.2430. As you know, Boris Johnson won the Tory leadership elections, and he is now Prime Minister of UK, so the victory of Boris fuelled no-Brexit agreement fear, making Sterling weaker. The GBP/USD currency pair currently traded at 1.2429, decreased by 0.04%.

Mr. Johnson, the new British Prime Minister after defeating opposing party representative Jeremy Hunt by 92,153 votes to 46,656, is likely to support no-deal Brexit which is still likely to weigh on GBP/USD.


Daily Support and Resistance
S3 1.2318
S2 1.2382
S1 1.241
Pivot Point 1.2446
R1 1.2474
R2 1.251
R3 1.2574

GBP/USD – Trade Tips

GBP/USD was facing solid support at 1.2490, marking the 38.2% Fibonacci support area. Recalling our yesterday’s brief, the Cable extended bearish rally until 50% and 61.8% Fibo levels of 1.2470 and 1.2450 respectively.

For now, consider staying bullish above 1.2440 to target 1.2475, while bearish entry can be taken below 1.2425 to target 1.2390 today.

USD/JPY – Daily Outlook

The USD/JPY currency pair is dominated by buyers as they are attempting a break of 108.40 on the day. Today since the Tokyo opening hour, the USD/JPY currency pair is trading at 108.23, having moved during the night from a low of 108.03 to a high of 108.28. The pair is essentially flat during the day after a positive session, continuing a range of bullish daily candlesticks on the charts.

Whereas, all investors were happy due to the possibility of a trade agreement between the United States and China and the U.S. legislators will go to China Beijing and meet their counterparts to continue trade talks in a positive direction.

On the other hand, there was positive news that congressional and white house agreement on the Federal budget and debt ceiling had been obtained. Additionally, all eyes will be on US Gross Domestic Product (GDP) which is due at the end of the week, the second quarter of 2019 is likely to drop to 1.8% from 3.1% in Q1 of 2019.


Daily Support and Resistance
S3 107.66
S2 107.92
S1 108.08
Pivot Point 108.18
R1 108.34
R2 108.44
R3 108.71

USD/JPY – Trade Tips

A bullish breakout of 108 may be 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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