The dollar held its ground on Tuesday, with the dollar index edging up 0.1% on the day to 98.92. Media announced that the U.S. and China are fighting to schedule trade talks this month after the White House declined to suspend tariffs. The Chinese foreign yuan sank to a record low, USD/CNH rose 0.5% to 7.1937.
The British pound dropped 0.8% to a two-week low of $1.2064. The U.K. government is exacted to hold a general election on October 14 if members of parliament attempt a Brexit delay, according to media reports. On the other side, the Markit U.K. Manufacturing PMI sank to a seven-year low of 47.4 in August (vs. 48.4 expected) from 48.0 in July.
Economic Events to Watch Today
Let’s took at these fundamentals…
GBP/USD – Daily Analysis
Today in the early Asian market, the GBP/USD currency pair hit the bearish track due to no British positive outcome & much-awaited resumption of the British Parliament. The figures found during trading 1.2030.
Ever since the UK Prime minister Boris Johnson stated to prorogue the parliament, the Politician of Britain indicating it as a clear sign of a no-Brexit deal. Because of this, a group formed by labour, and other opposition parties besides this Tory rebels will put forward an action to win over the Commons support for a bill that would require the Prime Miniter to delay Brexit till 31 Jan if he doesn’t get a deal with Europan Union before October 19.
In return to this, the United Kingdom Prime minister Boris Johnson has already frightened to announce a snap election due on 14 October, if he loses today’s crunch vote, then the motion on which will be passed for a vote tomorrow.
Therefore, a huge amount of political drama expects the United Kingdoms’ parliamentary open after a long summer break.
On the other hand, the UK’s August month Construction Purchasing Managers’ Index (PMI), 45.9 expected versus 45.3, will also gain the Cable traders’ attention.
Daily Support and Resistance
Pivot Point 1.2092
GBP/USD – Trading Tips
Today the GBP/USD slipped dramatically lower violating series of support levels around 1.2100, 1.2018 and 1.2000, the psychological level. Now it’s heading towards next target level of around 1.1950. Closing above this level may help us secure some bullish retracement.
USD/JPY – Daily Analysis
Today in the early Asian market, the USD/JPY currency pair hit the bullish track due to United States data, Brexit and awaits trade headline, the pair last seen at 0.11% at 106.33.
The USD/JPY currency pair is trying for direction though after a rally in the Greenback of late despite an expected twenty-five basis points rate cut from the FOMC at the meeting during this month amid intensifying trade uncertainty and further cuts in global growth.
At the Brexit front, the Tory rebels struggling to introduce a law to force a delay of the Brexit deadline until later in January. Prime Minister Boris Johnson is to give a key speech to parliament today after his report to the public overnight where he stressed that there is no sign for the delay to Brexit.
Moreover, the United Kingdom Prime minister Boris Johnson has already frightened to announce a snap election which is due on 14 October, if he loses on today crunch vote so then the motion on which will be passed for a vote tomorrow.
The United States manufacturing data of August ISM will be expected to be steady at 51.2, consistent with sluggish growth. “July construction spending is marked to increase by 0.3%, a partial rebound from the 1.3% drop in June.
Daily Support and Resistance
Pivot Point 106.22
USD/JPY – Trading Tips
On the technical side, the USD/JPY continues to trade the Fibonacci levels, which are extending nice support and resistance to the safe-haven currency Japanese Yen. On the lower side, we may see USD/JPY going towards 38.2% Fibo levels of around 105.80 and 50% Fibo level of 105.600. While resistance stays around 106.200. Consider staying bearish below 106.250 as that’s what 20 and 50 periods EMA are suggesting.
All the best!