Home Daily Analysis Forex Market Overview Daily FX Brief, September 19 – Major Trade Setups – BOE MPC...

Daily FX Brief, September 19 – Major Trade Setups – BOE MPC Rate Voting In Focus! 

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The Dollar Index rebounded 0.3% on the day to 98.58 on Wednesday while remaining within a trading range seen in the last few sessions. On Wednesday, the Fed President Jerome Powell announced that ‘moderate’ invasions should satisfy to defeat the economic weakness produced by the trade war and sluggish global growth. More extended series of interest rate cuts ‘ would be considered, if needed. However, other policy members don’t seem to be in favor. 

On the other hand, the SNB just released their policy, keeping the interest rate unchanged at -0.75%, which drove sharp buying in Swiss Franc. SNB is prepared to mediate in the foreign exchange market as necessary while considering the overall currency situation. 

Moreover, the National Bank is fixing the basis for calculating adverse interest on sight deposits at the SNB. 

Economic Events to Watch Today

Let’s took at these fundamentals… 

 

 


EUR/USD – Daily Analysis

The EUR/USD currency pair consolidates in the narrow range due to aggressive rate cut the pair is currently trading at 1.1038. The Federal Reserve rates cut by twenty-five basis points for the 2nd straight meeting. 

However, the leaders were divided on the need for an additional rate cut with five seeing no change in rates at the end of the year. Therefore, seven are wanting two rate cuts and the five expecting one further cut.

On the flip side, the market could finish expectations for a rate cut which was expected to happen in December, maybe greenback will get the better buying in the short-term, mainly against the EUR, due to the European Union recently adopted a robust dovish bias.

Therefore, the EUR/USD currency pair found on the bearish track. The Eurozone data docket is light as the focus stays in the BOJ, SNB, and BOE rate decisions.     


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 slipped lower to test 1.1015 support, and it’s the same level which is extending 61.8% Fibonacci support on the hourly chart. 

Considering this, it may help us secure buying above 1.1015 to amid for 1.1060 and 1.1072.


USD/JPY – Daily Analysis

The USD/JPY currency pair keeps flashing red and showing 0.28% declines to 108.00 on the day, as the Bank of Japan kept its interest rate at -0.10%. As of writing, the pair is presently trading at 108.09, 

The Japanese central bank continues to keep the interest rate unchanged at 0.10% and continues to maintain its promise to hold the ten-year the treasury yields around 0.0%.

Besides, the Bank of Japan repeated that they are likely to keep negative rates for an extended period, but may add fresh stimulus during the beginning of 2020 if needed.

BOJ failed to surprise the market via its policy statement; therefore, the pair has consolidated in the narrow range during the last few minutes and probably will remain following the movement in the equity markets ahead.

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 is now facing support at 107.790 along with resistance at 108.130. The violation of 107.790 will help us determine further trends in the market. The 20, 25 and 50 periods EMA is keeping the USD/JPY bearish below 108.250 area. So let’s stay bearish below this level to capture a sell until 107.900 and below this, we may see USD/JPY going towards 107.600. 


GBP/USD – Daily Analysis

GBP/USD currency pair still fluctuates under the 100-day moving average with the different Brexit news and the greenback moves higher opposite to the news.

The GBP/USD currency pair fluctuated after the significant market reaction to the U.S. Federal Reserve aggressive rate cut, which cut the interest rates by 25 basis points. Moreover, the GBP/USD pair downward movement was triggered over the unexpectedly weaker British Consumer Prices Index (CPI) details for the month of August.

Whereas, the United Kingdom Retail sales are anticipated to drop to 0.0% and 2.9% versus 0.2% and 3.3% respective priors on MoM and YoY basis, the bank of England is not expected to make any changes to its current monetary policy but may talk of Brexit uncertainty thorough rate statement.    

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

The GBP/USD pair extends to trade the bullish channel which is supporting the pair around 1.2460. Above this, we may see Sterling going towards 1.2513 area. The bearish breakout can lead its prices towards 1.2395 area. The BOE rate decision is in highlights for now  

All the best! 

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