The U.S. dollar and the euro saw volatile trading on Thursday after the European Central Bank published a new series of the stimulus plan. The ICE Dollar Index challenged a day-high of 99.09 before retreating to close at 98.43, down 0.2% on the day.
On the other hand, it is reported that the U.S. government officials have discussed offering an interim trade deal to China, which would delay or roll back some U.S. tariffs. Earlier, U.S. President Donald Trump tweeted: “It is expected that China would be buying large amounts of our agricultural products!”
The U.S. official data showed that the consumer price index (CPI) rose 1.7% on year in August (vs +1.8% expected and in July), and core CPI was up 2.4%, stronger than +2.3% expected and +2.2% in July. Initial jobless claims fell to 204,000 (vs 215,000 expected) for the week ended September 7 from 219,000 in the prior week.
Economic Events to Watch Today
Let’s took at these fundamentals…
EUR/USD – Daily Analysis
The EUR/USD currency pair is currently trading at 1.1070, hit the bullish track due to the release of the key US data. Notably, having hit a low of 1.1055 during the Asian trading hour.
On the technical side, the EUR/USD currency pair charted a bullish outside candlestick pattern, which happened after the day began on a downbeat tone, but at the end it showed signs of optimism, covering the previous day’s price action.
Therefore, the pair hints the coming bullish reversal. The trend of the pair could change if the pair touch the above of yesterdays high of 1.1087.
A bullish trend in the pair could be seen if the United States data, which is scheduled to release at 12:30 GMT, show the consumer spending as guessed by retail sales figures, which decreased sharply during the August. As of data, Retail Sales are anticipated to increase by 0.2% month-on-month during August, having increased by 0.7% during July.
Whereas, the current depressed data would support the slowdown tensions and pushing the greenback lower across the board. Besides this, the EUR/USD currency pair may end below the yesterdays figures 1.1087 if the retail sales erase past expectations,
On the other hand, the pair could also be affected by US Export Price Index and Michigan Consumer Sentiment Index, scheduled to release at 12:30 GMT and 14:00 GMT, respectively.
Daily Support and Resistance
Pivot Point 1.1046
EUR/USD – Trading Tips
On Friday, consider staying bullish above 1.1060 area as the EUR/USD is trading with a bullish bias today. The upper target can be around 1.1110 and 1.11250.
USD/JPY – Daily Analysis
The USD/JPY currency pair dropped to 107.52 in the beginning due to United Stas Yields data declined after the Europan Central banks statements. But then the pair have shown recovery, as the risk sentient improved and hit the 6-week high at 108.20 during the Asian session.
As of writing, the USD/JPY is presently trading at 108.16. The recovery came from the low of 108.05 to 108.20.
The United States two-year Treasury yields are, however, 4-basis points higher at 1.72%, while the 10’s gained 5bp to 1.80% which raised USD/JPY currency pair. Markets are pricing 24-basis points of rate cut at the Federal Reserve meeting which is scheduled at 19 September, and a terminal rate of 1.21%.
At the trade front, United States Treasury Secretary Mnuchn gave a statement that we are looking forward to reaching any positive outcome and making a deal with China.
Daily Support and Resistance
Pivot Point 107.43
USD/JPY – Trading Tips
Technically, the USD/JPY is still trading in the overbought zone, and it’s likely to reverse back a bit before continuing with the bullish trend. The bullish channel is likely to extend support around 107.888, and the violation of this level could extend bearish trend until 107.600. On the upper side, resistance is likely to stay around 108.250 today.
So consider staying bearish below 108.25 to target 107.700 and 107.60 today while bullish entry could be taken above 107.500.
AUD/USD – Daily Analysis
The AUD/USD currency pair inched up 0.1% to 0.6868, and currently trading at 0.6870. Initially, the pair hit a low of 0.6859. A sharp recovery came in the Aussie currency from lows below 0.67 in the last few days due to Chinas rate cut reduced pressure on the Reserve bank of Australia. Moreover, that optimism in the United States and China trade war boosted risk sentiment.
During the Wednesday, china declared its 1st batch of tariff exemptions for 16 different types of United States products. In its answer, the United States President Donald Trump postponed a tariff hike on $250 billion worth of Chinese goods by 2-weeks to Oct. 15.
On the other hand, all traders will keep their eyes on the fresh clues from the united states and China trade story. Moreover, all focus will keep on Challenges to the risk sentiment. As of data, the United States Retail Sales numbers for August awaited 0.2% versus 0.7% MoM, and the Michigan Consumer Sentiment Index for September, consensus 90.9 against 89.8 prior, will direct moves then after.
On the technical side, the rally has stuck at 0.6680, which is the 50 per cent Fibonacci retracement of the decline from 0.7082 to 0.6677.
The AUD/USD pair market marked on the bullish track above 0.6680, but the pair failed to hit the high of the previous 2-days. As such, the Wednesday candle was pictured as a Doji, and yesterday’s candle depicted a long upper wick (shooting star). As you know, both patterns are showing the bullish exhaustion.
Daily Support and Resistance
Pivot Point 0.686
AUD/USD – Trading Tips
On the technical front, the AUD/USD consolidates in a narrow range of 0.6880 to 0.6865. So far, it hasn’t made big moves as investors focus stayed on ECB and Euro pairs. Moreover, we didn’t have any major news from China which could have impacted the Aussie.
The 20 and 50 periods of EMAs are signalling a bullish bias among traders. Therefore, I would consider staying bullish above 0.6860 and bearish below 0.6910 today.
All the best!