Home Daily Analysis Forex Market Overview Daily FX Brief, September 18 – Major Trade Setups – Buckle Up...

Daily FX Brief, September 18 – Major Trade Setups – Buckle Up for Fed Rate Cut! 

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A day before, the U.S. Dollar Index retreated 0.4% on the day to 98.20 on Tuesday, as investors were split over a possible rate cut by the Fed later today. The Euro rebounded 0.7% to $1.1075. The German ZEW Current Situation Index fell to 19.9 in September (vs -15.0 expected) from -13.5 in August, while the Expectations Index improved to -22.5 (vs -38.0) from -44.1.

Oil prices reversed course to the downside after Saudi Arabia signaled that its oil production, disrupted by drone attacks at the weekend, could return to normal by end-September.

For now, all of the focus shifts to the FOMC and Fed Rate decision. Let’s trade them.

Economic Events to Watch Today

Let’s took at these fundamentals… 

 

 

EUR/USD – Daily Analysis

During the early Asian session, the EUR/USD currency pair failed to hit the recovery track and its currently trading around the 1.1070. It’s mostly because of the fact that traders await Federal Reserve decision which is scheduled to release later in the day.

However, the positive figures from the U.S, the Industrial Production and Capacity Utilization have been unsuccessful to satisfy the greenback buyers as investors focused on surprisingly better data of ZEW Economic Sentiment for Germany which extended reliable support to the Eurozone.

Moreover, the EUR/USD currency pair strengthed after Saudia Arabian negotiators showed a odds of quick recovery of the loss which happened in a drone attack last Saturday. 

All traders are on the careful track, saving their bets ahead of the Federal Reserve monetary policy meeting announcement which is scheduled to release later in the day.

Therefore, trade and fresh political news further increased lately, driving the risk-on sentiment. As of data, Asian stocks report increased, and the United States ten-year Treasury yield continues to around 1.80.



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 EUR/USD has tested a high of around 1.1075 area, which is likely to push it lower. So, consider staying bearish below 1.1070 to target 1.1040. 

USD/JPY – Daily Analysis

Today in the early Asian session, the USD/JPY currency pair rose by 0.1% to 108.19 mainly due to President Donald Trump and his administration as they may announce the trade agreement with Japan later this week.

It should also be noted that the actual trade data from Japan, positive trade and political news also support the USD/JPY currency pair. It may continue to hit the bullish track around 108.20 before Wednesday European session.

In addition to this, the positive data from Japan for August reported a shortfall in the Trade Balance, as it shrank lesser than ¥-355.9B forecasted to ¥-136.3B, whereas, the imports and exports fell to -12.0% and -8.2% respectively versus -11.2% and -10.9% forecasts.

On the other hand, investors frequently ignored negative statements from China’s National Development and Reform Commission (NDRC) and South Korea’s act of degrading Japan’s trade status. Actually, this could pressure on the Japanese yen in the coming days. 

    


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

The USD/JPY may gain support n107.750 and resistance at 108.300. So consider keeping an eye in 108.300 to stay bearish below this level to target 107.950 and 107.750 today. Buying can be seen above this level. 

 

GBP/USD – Daily Analysis

Today in the early Asian market, the GBP/USD currency pair dropped by 0.1% to 1.2486 as sentiment still remains weaker due to uncertainty over Brexit. Moreover, during the Asian session, the pair failed to hit the two months high and declined to 1.2490.

During the bullish momentum, 14-bar relative strength index (RSI) found on the overbought track, due to which, the possibilities of a drop in increased. We may see a further drop of up to 23.6% Fibonacci retracement level of the current month, which marks the level of 1.2393.

It should be noted that today is the busiest day on the economic calendar because of the critical financial data, especially from the United Kingdom and the United States. Therefore all eyes should remain on the CPI figures coming out from the United Kingdom and Fed rate decision.

Additionally, traders will expect an annualised rate cut of 2.0%. This will be a small drop from 2.1% earlier. If the expectations are considered correct, then it will mean that there will be no significant change from the BOE at their meeting tomorrow.

    


Daily Support and Resistance

    

S3 1.2274

S2 1.2354

S1 1.239

Pivot Point 1.2435

R1 1.2471

R2 1.2516

R3 1.2597

GBP/USD – Trading Tips

Looking at the 4-hour chart, the GBP/USD is facing double top around 1.2577 area, and below this, the pair can stay bearish. Eyes remain on the FOMC and UK CPI figures which are due later today. Consider staying bearish below 1.2480 area to target 1.2400 today but try to come out of a trade before the news time.

All the best! 

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