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Daily FX Brief, July 31 – Big Day, U.S. Fed Set to Cut Interest Rate!

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Today, the U.S. dollar held steady in the wake for scheduled Federal Reserve’s meeting and rate decision which is most likely to yield interest rate cut. Well, one of the reasons why this event is in highlights is because it’s going to be the first-rate cut since 2008.

With the Fed expected to reduce its key rate by 25 basis points (bps), the main focus is on whether it will leave the door open for further policy easing to insulate the world’s largest economy from slowing global growth and the fallout from trade conflicts.

Economic Events to Watch Today

 

 

EUR/USD – Daily Outlook

The EUR/USD currency pair is stable nearby 1.1155 due to Eurozone inflation figures. The major currency pair is trading around 1.1155 and stuck in the same area, due to the Eurozone inflation data and key macro data releases.

There are few chances in German data which is due at 06:00 GMT to show consumer spending, while as represented by retail sales, increased 0.5% in June month by month, after a decline of 0.6% in May.

Besides, the data which is due at 07:55 GMT is expected to present the German Economy release 2000 jobs later this month, and the adjusted unemployment rate steadied at 5% season by season.

Meanwhile, according to forecast, probably the Eurozone’s Consumer Price Index (CPI) could slip to 1.1% year on year in the preliminary read for July against 1.3% in June.

Technically, the pair is trading around 1.1175 and has already completed the 23.6% retracement of the 1.1411/1.1101 decline. That makes of the 1.1170/80 price, zone, the first barrier to the upside.

The 1.1100 figure, on the other hand, is the immediate support with a break below the level favouring a continued decline toward the 1.1020/40 price zone.


Daily Support and Resistance
S3 1.1092
S2 1.1121
S1 1.114
Pivot Point 1.115
R1 1.1169
R2 1.1179
R3 1.1209

EUR/USD – Trade Tips

Bullish movements above 1.1170 to target 1.1200 and 1.1235. That’s a very likely scenario as investors may jump in bullish trades over interest rate cut decision from the US Federal Reserve.

GBP/USD – Daily Outlook

The GBP/USD currency pair trading around 1.2150 due to some fresh Brexit hints. Today in the early Asian market, the GBP/USD currency pair increased slightly after declining to approximately two-year lows in the previous session due to the increased possibility in a disruptive Brexit on 31 October.

The GBP/USD currency pair inched higher 0.1% to 1.2155 by 12:30 AM ET (04:30 GMT). While the quote still sidelined due to some catalysts from the United Kingdom, besides for Prime Minister Boris Johnson again push to repeat discussions concerning the Brexit deal to the European Union.

Concerning a sharp bearish trend in GBP/USD, I would say that behind the tension and depressive moves, there are multiple reasons, such as Northern Ireland visit and the long-awaited monetary policy meeting by the US Federal Reserve.

At the trade front, the final agreement from the United States and China trade talks in Shanghai raises the burden on traders.


 

 

Daily Support and Resistance
S3 1.2014
S2 1.2085
S1 1.2124
Pivot Point 1.2157
R1 1.2195
R2 1.2229
R3 1.2301

GBP/USD – Trade Tips

As expected, the GBP/USD traded inline with our previous forecasts and took a sharp bearish turn to reach our swing trading level of 1.2012. I will suggest staying bearish on GBP/USD, but not today as the oversold pair is very likely to reverse back.

The cable may surge to complete 23.6% retracement at 1.2215 and 38.2% retracement at 1.2275. I will consider staying bullish above 1.2100 and bearing below 1.2275 today.

USD/JPY – Daily Outlook

The USD/JPY currency pair is trading below the key 50 periods moving average support. Such as the USD/JPY currency pair is currently trading at 108.55 and the 50 periods moving average is found at 108.57 down 0.02%, in short, the currency pair fluctuating between 108.55 to 108.57. Besides, the yields on the U.S. Ten-year Treasury note is trading mostly stable on the day at 2.06%. Importantly, the benchmark yield has been bound to a tight range of 2.00% to 2.10% since July 18.

On the flip side, as we know the U.S. Federal Reserve Bank is broadly expected to cut aggressive rates by Twenty-five-basis points today. But the markets have already on fluctuating mood, so rate cuts would not be surprised.


 

 

Daily Support and Resistance
S3 108.08
S2 108.33
S1 108.47
Pivot Point 108.58
R1 108.72
R2 108.84
R3 109.09

USD/JPY – Trade Tips

I would like to stay bearish below 108.45 and bullish above the same. Further buying in USD/JPY is suggested on the bullish breakout of 108.900 resistance to target 109.400. On the lower side, a bearish breakout of 108.450 may provide a sharp selling opportunity today. All the best!

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