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Daily FX Brief, Sep 02 – Top Trade Setups In Forex, U.S. Celebrates Labor Day!

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The economic calendar was on the busier side through the Asian session this morning. Key stats included August manufacturing numbers out of China, Australia, and Japan. 

Moreover, the 2nd quarter capital spending out of Japan and 2nd quarter company gross operating profit figures out of Australia also provided direction. Economic data from China over the weekend had weighed on risk appetite ahead of the more influential Caixin PMI.

Caixin Manufacturing PMI

We have had a real collection of Markit August PMI’s from across Asia released today, ending with China’s Caixin August PMI, growing in higher at 50.4, back in the development area. 

It was in contradiction to the pan-Asia PMI announcements earlier today that all released in weaker than anticipated. The China release has decreased the earlier negative sentiment in Asian markets, with Shanghai somewhat higher in opening trade. The difference in results, though, will leave lingering worries that the positive China result was an aberration. Asia has a packed data calendar today before the week’s main events. 

Economic Events to Watch Today

Let’s took at these fundamentals…

 


EUR/USD – Daily Analysis

At the start of the week, the EUR/USD currency pair stuck at 1.10 handle to a start the big week, consolidating Fridays sell-off to the lowest level since May 2017 at 1.0962. 

Despite the fair Italian movement and Democratic Party have worked their best during the weekend, the EUR currency still under pressure, as the Fiber continues within nearness to the YTD lows reached last Friday.

Found aggressive selling last week, despite intensifying trade war between the United States and China trade war and Brexit threats pushing the German and Eurozone economy, with the latest German retail sales and soft Eurozone inflation already stressing the economic recession concerns.

The United States economy is still stronger despite the rising United States and China trade tensions. Therefore, the progress differential remains to support the Greenback at the decline of the Euro. Meanwhile, the USD also Received a boost from the ending moth repositioning and hit the highest level since May 2017 at 99.02.


On the other hand, Shared Currency is mute due to increasing expectations for a rate cut by the European Union this month. Comments came from the top official that he Cental Bank should represent a significant an impactful package during the September meeting.

Daily Support and Resistance

S3 1.0821

S2 1.091

S1 1.0945

Pivot Point 1.0999

R1 1.1035

R2 1.1088

R3 1.1177

EUR/USD – Trading Tips

EUR/USD has traded dramatically bearish precisely but mostly in line with our forecasts. A follow-through weakness below the 1.1055 horizontal support has extended the sell-off until our target level of 1.1010, and now, the market is likely to head for 1.0960. 

Therefore, consider staying bullish above 1.0905 to target 1.1040, whereas selling can be seen below 1.1045 until 1.0950 and 1.0910. 

GBP/USD – Daily Analysis

Today in the early Asian market, the GBP/USD currency pair on the recovery track and take the bids to 1.2160 despite the strong Greenback and political uncertainty surrounding the United Kingdom, 

Probably, the reason could be the profit-booking of Greenback due to the labour day holiday in the United States. Whereas, the expected progress in the United Kingdom market Manufacturing Purchasing Managers Index, from 48.40, could be considered as a further catalyst for the bounce.

On the flip side, the political fronts are getting darker at Britain due to Tory Whips are given a warning, not to go against the UK Prime Minster Boris Johnson’s plan of proroguing the parliament. Besides this, the Prime Minster Boris Johnson haters got a new reason to protest against the no-deal Brexit with this PM Boris Johson’s ability to parliament. 

Therefore, the Chancellor Duchy of Lancaster comments, who manage the Brexit, rises the possibilities for no-deal Brexit by rejecting any law that can stop the no-Brexit deal.


 

Whereas the United Kingdom Parliament will be on a shaking week, because of this PMIs will start liquidity into otherwise less active British Pound (GBP). 

Daily Support and Resistance

S3 1.2003

S2 1.209

S1 1.2127

Pivot Point 1.2177

R1 1.2214

R2 1.2264

R3 1.2351

GBP/USD – Trading Tips

Today the GBP/USD is mostly trading sideways but has already violated the 1.2175 support area. It was a very crucial level as it was expected to bring a bullish reversal in GBPUSD until 1.2240 and 1.2277. Since the level is already broken, we may see Sterling extend bearish rally until 1.2134 and 1.2108.

Consider staying bullish above 1.2175 to target 1.222 and 1.2256. On the lower side, short selling can be done under 1.21750 until 1.209.

All the best!

 

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