On Tuesday, the greenback surged against a basket of currencies as U.S. President Donald Trump’s permits to handle and use the contingency crude inventories in rejoinder to drone assaults on Saudi Arabian refining buildings. It’s also cooling down the surge in the oil prices.
Besides that, the demand for haven currency pairs has also dropped. I’m pointing to the Japanese yen and Swiss franc. Both of the safe-haven currency reversed back to their pre-strike levels after President Donald Trump permitted to use the emergency crude oil inventories to meet the immediate demand and resist rising oil prices.
Economic Events to Watch Today
Let’s took at these fundamentals…
EUR/USD – Daily Analysis
The EUR/USD currency pair was flashing red and dropped by 0.65%. This is considered as the largest decline since the July 1, ahead of Saturday’s drone attack on Suadias WTI crude oil output refineries.
As of writing, the EUR/USD currency pair presently trading at 1.1012, pair flashing green on the day.
Meanwhile, the market anxieties regarding the chances of the United States tariffs, which is imposed on Europan Union goods, also leaving the pressure on the EUR currency.
As of German ZEW data, The ZEW survey, Economic Sentiment of September is awaited to print at -37.00 .vs. -44.1 during August. Meanwhile, the ZEW survey, Current Situation (Sep) is seen issuing at -15.00, having published at -13.5 during August.
Upbeat expectations needed to ease the German economic slowdown are weighing on the single currency. Therefore, the EUR/USD currency pair could hit the bullish track above the declining road, and the pair is currently at 1.1087.
The currency’s downward pressures may further increase if geopolitical tensions in the middle east intensify. Moreover, there is an increased demand for Treasury yields and the greenback, as of writing. The EUR/USD currency pair, presently trading at 1.1012, is flashing green on the day.
Daily Support and Resistance
S3 1.0847
S2 1.0936
S1 1.0969
Pivot Point 1.1026
R1 1.1058
R2 1.1115
R3 1.1204
EUR/USD – Trading Tips
The Signal currency, Euro, made a bearish movement to complete the Fibonacci retracement at 61.8% retracement level at 1.0999. Closing of Doji candles above this level is hiking the odds of a bullish reversal. Whereas, the series of 20, 25, and 50 periods EMA are signalling selling trend in the EUR/USD.
Therefore, you should consider staying bearish only below 1.0985 area. While buying can be seen above the 1.1095 zones.
USD/JPY – Daily Analysis
During the early Asian session, the safe-haven currency USD/JPY currency pair hit the bullish market to rose from 107.70 to 108.10. The pair made a bullish recover despite recent bearish fundamentals from the international financial markets, especially the protest against the Saudia Arabia crude oil facilities. Besides this, the USD/JPY pair touching the mounting track and the greenback is also gaining as sellers seem to do profit takings ahead of FOMC.
During this week, all eyes are likely to remain on the meeting of FOMC where traders are expecting a rate cut by the 25 basis-points. Meanwhile, there will also be the Federal reserve guidance which is expected to deliver another rate cut in Q4 if required.
The current week is considered valuable because, during this week, the Bank of Japan will also follow the trend of a rate cut from the Central Bank around the world.
Additionally, there are growing expectations that BoJ’s policy is set to continue on hold during this week, that the Bank of Japan likely planed to deliver a lower short-term rate further in the negative territory hopefully in the next months.
Daily Support and Resistance
S3 106.99
S2 107.49
S1 107.8
Pivot Point 107.99
R1 108.3
R2 108.49
R3 108.99
USD/JPY – Trading Tips
Recalling our previous brief, the USD/JPY opened with a bearish gap to place a low of around 107.450. However, the bulls jumped in pretty soon to buy a cheaper and oversold pair. At the moment, the USD/JPY may find support around 107.750 and resistance at 108.300. Consider staying bearish below 108.300 to target 107.950 and 107.750 today.
AUD/USD – Daily Analysis
One of the pair that remained in highlights today is the Aussie dollar. Earlier today, the AUD/USD currency pair hit the bearish track and representing 0.18% losses today.
Most of the bearish bias triggered over RBA meeting minutes which stated the interest rate might fall further if Australian labour markets fail to stabilise. The pair is currently trading at 0.6852, earlier today the pair had hit a high of 06870.
Bearish bias in the Australian Dollar is sending the AUD/USD currency pair lower to the fifty-day moving average support of 0.6849. The September meeting minutes of Reserve Bank of Australias said the board would examine more rate cut if needed to support development and inflations targets
As yet, the unexpected better data has not succeeded to put a buying under the Australian Dollar, due to came a dovish comment on wages from the Reserve Bank of Australia. Therefore, the bank is expected to deliver the rate cut during November and February.
Daily Support and Resistance
S3 0.6807
S2 0.6837
S1 0.6851
Pivot Point 0.6868
R1 0.6881
R2 0.6898
R3 0.6928
AUD/USD – Trading Tips
Looking at the 4-hour chart, the AUD/USD has violated the bullish channel, which tends to support the pair around 0.6870. Alongside, the triple top pattern also pushed the pair lower amid weaker Aussie on Dovish RBA.
Besides that, there’s a bearish crossover on 20, and 50 periods EMA which is signalling selling trend in AUD/USD. Consider staying bearish below 0.6868 today to target 0.6810.
All the best!
