Home Daily Analysis Forex Market Overview Daily FX Brief, September 20 – Major Trade Setups – Trading The...

Daily FX Brief, September 20 – Major Trade Setups – Trading The Risk-off Sentiment! 

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Along with the dollar index, the Australian and New Zealand dollars are also on a weaker side today as investors seem to secure profits make ahead of the weekends. Well, the AUD and NZD had a steepest weekly drop, as each has given up more than 1%.

Traders focus also stays on the U.S.-China trade discussions in Washington, aimed at setting the basis for high-level talks next month.

Nevertheless, most investors are careful. Several symptoms of development have begun, and with a vast distance between both sides living, the issue is hitting the risk-on mood, keeping investors in the Risk-off. 

Economic Events to Watch Today

Let’s took at these fundamentals… 

 


EUR/USD – Daily Analysis

EUR/USD currency pair remains sideways and currently trading at 1.1058, showed slight increases on the day. Meanwhile, the EUR currency consolidates in the narrow range between 1.10-1.11 since September 16, even after the United States ten-year treasury yields declined from 1.907% to 1.75%.

Eurozone’s preliminary consumer confidence index for September is scheduled to release at 14:00 GMT and expected to come in at -7, having figures at -7.1 during August. 

An unexpectedly weaker data will support the decision of the European Central Bank to distribute fresh stimulus and may send the EUR currency down.

On the technical side, however, if the pair would hit the bullish track and when break the bearish highs set up with a daily close above September 13’s high of 1.1110. 

German Producer Price Index is scheduled to release at 06:00 GMT probably could ignore by markets, due to factory recession is commonly accepted from now and prices in.

    

Daily Support and Resistance

S3 1.0971

S2 1.1011

S1 1.1026

Pivot Point 1.105

R1 1.1065

R2 1.1089

R3 1.1128

EUR/USD – Trading Tips

After completing 61.8% Fibonacci retracement, the EUR/USD pair is consolidating in a narrow trading range of 40 to 50 pips. The sideways trading can be experienced within 1.1075 to 1.1020 zone. Whereas, the bullish or bearish breakout will help us determine the upcoming trends today. 


USD/JPY – Daily Analysis

The USD/JPY currency pair is consolidating in the tight range between a low of 107.92 and a high of 108.08. During the previous session, the pair traded between the range of 107.80 and 108.10, shifting the FOMC jump and brushing off the bank of Japan’s non-aggressive tone. That was because United States stocks failed to hit the upward and markets still sidelined.

It looks like the market continues to expect of a 25-basis-points rate cut later in the year and a final rate of 1.17%, even after the aggressive rate cut by the Federal Reserve. At the BOJ front, if the Consumer Price Index continues to perform weaker, the BOJ may have to play with their monetary policy.

Japan August national CPI is noted to be decelerating to 0.3% vs. 0.5% on the core areas. The reading is far behind the bank of Japan’s standards of 2% inflation targets and that sets the hints of further policy easing by the BOJ. 

    

Daily Support and Resistance    

S3 107.37

S2 107.69

S1 107.86

Pivot Point 108

R1 108.18

R2 108.32

R3 108.63

USD/JPY – Trading Tips

Today on Friday, USD/JPY, the safe-haven currency pair, continues to find support near 107.780 While the resistance stays at 108.130. Beneath 107.790, the USD/JPY may start exhibiting further bearish trend until 107.450. 

On the side of the lagging indicator, the 20, 25 and 50 periods moving averages are now placing resistance at 108.135. Today, it’s better to stay in sell below 107.750 regions to target 107.450. 


GBP/USD – Daily Analysis

The GBP/USD currency pair hit the 2-months high and found in the buying trend of 1.2550 due to European Union legislators eventually talking about the United Kingdoms PM Boris Johnson policies.

Whereas, the Europan Union Commission President Jean-Claude Juncker’s openness toward substitute solutions to the Irish backstop recently triggered the certainty that the United Kingdom legislators will be ready to support a Brexit deal with European Union by the PM Boris Johnson October 31 deadline.

Apart from this, the greenback seems weaker due to the fresh trade sentiment with China. Moreover, the negative performance of the United States ten-year treasury yields is also weighing on the weaker dollar. 



Daily Support and Resistance    

S3 1.2264

S2 1.2387

S1 1.2458

Pivot Point 1.2509

R1 1.2581

R2 1.2632

R3 1.2754

GBP/USD – Trading Tips

On Friday, the GBP/USD has violated the ascending triangle pattern on the 4-hour timeframe. The triangle was extending resistance at 1.2507 area. Most of the bullish bias triggered after the BOE kept the policy rate unchanged. The 1.2507 level is very much likely to provide support to the GBP/USD. At the moment, the GBPUSD pair has the potential to go after 1.2580 and even above this level. The bullish trend can be expected today.

All the best! 

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