On Wednesday, the forex trading begins with the risk-off sentiment as investors felt frightened about the U.S.- China trade war. President Donald Trump announced Tuesday he would not admit a “bad deal” in trade discussions amidst China as the world’s two biggest nations resume their drive to halt this intensifying trade war.
During his speech in the United Nations General Assembly, U.S. President Donald Trump slammed China for something he named unfair trade practices. President Trump also seemed to downplay the significance of instantly uncovering a deal. With this, the U.S. stock markets slipped dramatically, driving bullish trends in the haven assets such as gold and Japanese yen.
Economic Events to Watch Today
Let’s took at these fundamentals…
EUR/USD – Daily Analysis
The EUR/USD currency pair hit the low of 50-hour moving average support and could further decline due to dovish European Central Bank talks. By the way, the EUR/USD currency pair is currently trading at 1.100 area, and the 50-hour M.A. is located at 1.0998.
The EUR/USD currency pair had hit the high of 1.1024 in the U.S. session, as the U.S. dollar weakened over the fresh trade tensions between the United States and China. The dollar got another hit on news that the U.S. House Speaker plans a formal impeachment inquiry of President Trump.
However, the pair had hit the bullish track for a short time as the Greenback got support in Asia possibly as a result of China is planning to increase the buying of the United States farm products. That comes in the positive sense for high-level trade talk which is scheduled to happen, later this week.
As per the statement came earlier this month from Coeure, along with Bundesbank President Widemann, Banque de France President Francois Villeroy de Galhau, he rejected the restarting of the bond-buying plan of the President Draghi’s. However, if Coeure verifies these statements, we may see some bullish moves in the EUR.
Daily Support and Resistance
Pivot Point 1.1009
EUR/USD – Trading Tips
Looking at the chart above, the EUR/USD is trading in the symmetric triangle pattern, which is suggesting neutral bias among traders. The EUR/USD is facing immediate resistance at 1.1020 and 1.1064. Whereas, the support stays at 1.0971 and 1.0945. Let’s consider staying bearish below 1.1009.
USD/JPY – Daily Analysis
A day before, the USD/JPY pair opened with 107.533 and is currently trading at 107.318 after placing a low of 107.008; pair is showing a bearish trend today.
On 5:30 GMT, the Flash Manufacturing PMI data release from Japan’s Jibun Bank slipped to 48.9 from the previous 49.3 gave the USD/JPY pair a slight upward trend at the beginning of the trading day.
The speech of BOJ governor, Kuroda at 10:30 GMT expressed the concerns of Bank of Japan over the escalating risks to the economy. He said that like other central banks, Bank of Japan was ready to take policy action as insurance against the prevailing risks if needed. He noted that BOJ would ease the policy without hesitation if the chances of the economy to fall enhances. Traders acted accordingly in the market.
U.S. Dollar was under pressure today because of the poor economic data release. The Conference Board released its index of Consumer Confidence at 19:00 GMT; the figures showed that it has fallen in the month of September to 125.1 from previous month’s 134.2.
Another release about Richmond Manufacturing Index by Federal Reserve Bank of Richmond at 19:00 GMT came as -9 as compared to expected 2. This data also gave a negative impression to the U.S. Dollar today.
After the release of these economic figures, the U.S. Dollar Index also dropped down by 0.1%. The weak dollar pulled the USD/JPY pair to its previous trend to bearish and made this day as 4th consecutive day of this pair for downward movement.
Daily Support and Resistance
Pivot Point 107.29
USD/JPY – Trading Tips
On Wednesday, the USD/JPY has formed a small bearish channel which is signaling bearish bias among trader. Besides that, the USD/JPY has completed 50% retracement at 107 area which may get further extended towards 61.8% Fibo levels of around 106.800.
The 50 periods EMA is providing resistance at 107.450 area, and below this, we can expect USD/JPY to stay bearish. On the lower side, a bearish target is likely to be 107 and 106.750.
AUD/USD – Daily Analysis
Earlier today in the Asian session, the AUD/USD currency pair hit the fresh daily lows, around the 0.6775 level in the last hour. Notably, the AUD/USD pair lost a significant part of an uptick in the previous session.
The currency pair faced some downward movement on the day even after the supporting trade headlines. While investors noticed yesterday’s limited release of the Conference Boards Consumer Confidence Index and progress in the United States Treasury, bond yields weakened the Greenback, and pulled some pressure on the major.
On the other hand, the buyers seemed depressed by the report that impeachment inquiry will be started against U.S. President Donald Trump. Despite the latest trade news, China planning to buy more United States agriculture products in a positive sense for the high-level trade talks later this month.
Looking forward, there is not any significant market-moving U.S. economic data which is due for release on the day. Therefore traders possibly take hints from the coming speeches by influential FOMC members, Chicago Fed President Charles Evans and Kansas City Fed President Esther George, to grab some short-term opportunities.
Daily Support and Resistance
Pivot Point 0.6792
AUD/USD – Trading Tips
The AUD/USD is trading in a narrow range of 0.6805 – 0.6760 range, and with no major economic event on the board, we may see a continuation of the sideways trend in the AUD/USD. So consider staying bullish above 0.6760 and bearish below 0.6860 until the breakout happens.
All the best for trading.