Home Daily Analysis Forex Market Overview Daily FX Brief, September 24 – Major Trade Setups – Risk-off Sentiment...

Daily FX Brief, September 24 – Major Trade Setups – Risk-off Sentiment Plays! 

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On Thursday, the financial markets are trading the risk-off after the disappointing release of European PMI figures. The economic data escalated the odds that the European most significant economy shifts into recession. This fact raised the prospects of a global slowdown and increased the demand for safe-haven assets which also includes the USD/JPY pair. Hence made the previous week’s bearish trend slower. 

On the fundamentals side, traders focus will remain on the U.S. economic events and RBA Gov Lowe speech. Let’s dig deeper into details and trade the Risk-off sentiment today… 

Economic Events to Watch Today

Let’s took at these fundamentals…

 


EUR/USD – Daily Analysis

The EUR/USD currency pair hit the bearish track and hit the low of 1.0966 and ended at 1.0993, but this pair could run the further low into the bearish range of 1.0993. One of the significant reasons behind a bearish trend was the series of worse than expected economic events. 

We may see a further bearish trend in the EUR/USD if the German IFO data will release against the expectations; by the way, the data is scheduled to release at 08:00 GMT.

The German IFO data Current Assessment (Sep) index is expected to issue at 97.0 against 97.3 in August. The Business Climate index is found at 94.5 opposing 94.3 during August, and the expectations index is forecasted to tick slightly higher to 91.8 from 91.3.

The shared currency could hit the buying trend if the German IFO data releases beat the expectations in a positive sense by a large gap. As of writing, the currency pair is currency trading at 1.0991.

On the technical side, the EUR/USD confirming a bear-flag breakdown on the daily line chart. The bearish line pattern has opened the doors for a decline to 1.0925, the low hit on September 3 and September 12.

Daily Support and Resistance    

S3 1.0885

S2 1.0956

S1 1.0988

Pivot Point 1.1028

R1 1.106

R2 1.11

R3 1.1171

 

EUR/USD – Trading Tips

The EUR/USD is facing stiff resistance at 1.0990, and below this, we may see a continuation of a bearish trend until 1.0970 and 1.0945. 

USD/JPY – Daily Analysis

The USD/JPY currency pair hit the bearish level and dropped from the session high of 107.69 to low of 107.52, mainly due to the buying tone in the Japanese Yen. Notably, the pair dropped despite the increase in the United States equity index futures.

As of writing, the futures on the S&P 500 are reaching 0.26% increases. Despite that, the Japanese Yen has picked up a buying, possibly due to the decline in the United States Treasury yields.

The United States’ ten-year Treasury yield is presently trading at 1.71%, showing 2-basis points down on the day. In the meantime, the 2-year yield is down 1-basis point at 1.68%, and as you know, that is more sensitive to the short-term interest rate expectations.

On the other hand, the Bank of Japan Governor Kuroda was scheduled to deliver the speech at 05:30 GMT. Kuroda sounded neutral, keeping the willingness to rise the massive stimulus plan if the economy moves away from the track to the 2% inflation target.

   

Daily Support and Resistance

S3 106.7

S2 107.2

S1 107.38

Pivot Point 107.71

R1 107.89

R2 108.21

R3 108.71

USD/JPY – Trading Tips

On the 2 hourly timeframes, the USD/JPY is trading in the bearish channel which is extending strong resistance at 107.550 area. The series of EMA is also providing hurdles around 107.600, suggesting odds of a bearish reversal below this level. Therefore, consider staying bearish below 107.550 today to target 107.300 and 107.100.  

 


USD/CAD – Daily Analysis

A day before, the USD/CAD pair opened with 1.32612 and has placed a high of 1.33048. At the opening of the new trading week, USD/CAD rose higher and continued to perform well within a range set by previous weeks.

Reports were suggesting that the production of Saudi oil fields would be fully restored in a coming week made Crude Oil under pressure at the start of the week. Furthermore, the fact that the disappointing European economic data release (and the increased threat of global economic slowdown) would make a negative impact on the energy demand stressed Crude Oil prices. The same data release from Europe and Germany gave strength to Greenback and increased its demand.

The mixed sentiment of same data release affected the movement of USD/CAD at the starting day of the week. There was no clear trend seen on Monday about this pair as it rose in the beginning and dropped after with the same level.

The release of change in total value of wholesales by Canada showed that there has been increase in wholesales in September with 1.9% as compare to August’s result of 0.7% this release gave strength to the commodity-related currency- CAD. while at 18:45 GMT, the statement about US PMI of both Services & Manufacturing Sector came more significant than the previous month’s figures, gave strength to U.S. dollar.

Release from both county’s data created mixed signals for the movement of this pair, hence, provided a muted trend at the end of the day. On coming Wednesday, there is a release bout U.S. Crude Oil Inventories which will be placing a strong influence over this pair movements. 


Daily Support and Resistance

S3 1.3051

S2 1.3156

S1 1.3211

Pivot Point 1.3261

R1 1.3315

R2 1.3365

R3 1.347

USD/CAD – Trading Tips

On Tuesday, the USD/CAD has violated bullish channel at 1.3268 area. The same level is now expected to extend support to the Loonie today. The USD/CAD is trying to bounce off, but the 1.3270 level is keeping it bearish. The pair has also crossed below the 20, 25 and 50 periods EMA, which is another bearish signal for the USD/CAD today. Consider staying bearish below 1.3270 with the aim of 1.3250 and 1.3230 today. 

All the best! 

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