Home Daily Analysis Forex Market Overview Daily FX Brief, September 26 – Major Trade Setups – Market Set...

Daily FX Brief, September 26 – Major Trade Setups – Market Set to Trade U.S. GDP! 

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On Thursday, the Greenback gained widespread support as traders welcomed the U.S. President Donald Trump’s ideas of growth, and his willingness to reach a trade agreement with China. The market disregarded the chances of an impeachment probe, making much progress in the short term. The dollar index (DXY) posted the most robust bullish momentum in the months and traded sideways in the Asian trade.

Economic Events to Watch Today

Let’s took at these fundamentals

  


EUR/USD – Daily Analysis

The EUR/USD currency pair is moving on the un-safe track, hit the lowest level of two years during the Wednesday. The pair could hit the level of 1.09 if the European Central Bank (ECB) President Draghi covers his last decision regarding restarting the bond-buying plan.

As of writing, the EUR/USD currency pair currently trading at1.0962, having hit the low of 1.0942 during the earlier Asian hours.

As we know, the EUR currency ended at the lowest level at 1.0942 on Wednesday, the lowest point since May 2017. Also, the Greenback was found on the buying track, presumably due to the increased in United States treasury yields.

It should be noted, the United States’ ten-year treasury yields increased almost 8-basis points. That happened despite a formal impeachment inquiry of the United States President Donald Trump. 

Today, all of the eyes stay in the ECB President Mario Draghi’s speech, which is scheduled to happen at the European Systemic Risk Board annual conference in Frankfurt at 13:30 GMT.

The central bank cut on September 19 easing by ten-basis points to 0.50% and published a Q.E. program, which will start from November 1.

    


Daily Support and Resistance    

S3 1.0928

S2 1.0969

S1 1.0994

Pivot Point 1.1009

R1 1.1035

R2 1.105

R3 1.109.

 

EUR/USD – Trading Tips

The EUR/USD pair has already violated the symmetric triangle pattern which was extending its support around 1.1000 area. On the lower side, the single currency Euro may find support at 1.0950, where the violation of this level can drive further bearish trends until 1.085. Consider staying bearish below 1.0940 area today.


USD/JPY – Daily Analysis

A day before, the USD/JPY closed at 107.768 after placing a high of 107.881. The USD/JPY pair was high onboard due to Strong USD and its increased demand on Wednesday.

The release of the summary transcript by US Justice Department, related to the telephonic conversation between the President of the US and Ukrainian President showed that Trump did not violate any laws. That helped to ease political tensions that arose due to President’s Impeachment announced by house speaker Nancy on Tuesday.

This news helped to decrease the political tension and increase the demand for U.S. Dollar in the market made the USD/JPY pair to rise sharply.

At the same time, Trump announced in a joint press conference with the Prime Minister of Japan, Abe, that Japan and the United States had reached a trade deal. He also said that the trade deal between the U.S. & China regarding prevailing trade war could happen soon. He also mentioned that China was making big agricultural purchases from the United States.

This news also helped to decrease the need for safe-haven and increased the demand for Greenback, even more, making the same rise in USD/JPY prices.

The 10-year U.S. Treasury bond yield increased by 1.70%, and 5-Year U.S. Treasury Bond Yield increased by 1.60%. That gave a strong positive response to U.S. Dollar and raised it against all its rival currencies.

The data release at 10:00 GMT from Bank of Japan about Core CPI showed that, in September, the 0.4% CPI was weak as compared to previous month’s 0.6%. That gave a boost to the upward trend of USD/JPY. At 19:00 GMT, the release about U.S. New Homes sales showed growth by 713K which were expecting as 652K also strengthened the U.S. Dollar.

USD/JPY placed a high of 107.881 after all these positive responses on Wednesday.

Daily Support and Resistance 

S3 105.62

S2 106.45

S1 106.78

Pivot Point 107.29

R1 107.62

R2 108.13

R3 108.97

USD/JPY – Trading Tips

On Thursday, the USD/JPY has violated the bearish channel which was extending substantial resistance at 107.500 over the series of dollar supported news. The Bullish breakout of this channel is now extending support at 107.400 while the resistance stays at 107.800 area. The MACD is suggesting a bullish trend, as the series of histogram remains green above the crossover zone. 

Although we are seeing a slight retracement in the USD/JPY right now, the bullish breakout can keep the pair upbeat now. Consider taking buyings above 107.29 area today. 


AUD/USD – Daily Analysis

The AUD/USD currency pair seems to recover and trade at 0.6755 over strong Greenback. You may have noticed, the drop in AUD/USD isn’t as worse as in case of the EUR/USD, GBP/USD, and XAU/USD. It’s because the positive developments from the U.S. and China also help improve sentiments for the Aussie economy.  

The positive signs came from two sides regarding the Sino-US trade deal. First of all, the United States President Donald Trumps said that the trade deal could happen with China as soon as possible. Secondly, the United Nations General Assembly (UNGA), by Japan, also supported the markets risk sentiment. With that, the United States’ ten-year Treasury yields remain positive, whereas the S&P500 Futures also avoids declines. 

At the trade and political front, the United States Gross Domestic Product (GDP), comments from the Federal Reserve Bank of St. Louis President James Bullard and the Federal Reserve Governor Richard Clarida will remain in focus during the rest of the day.

Economists are not expecting any changes in the annualized 2.0% figure of the United States Final GDP for Q2. Notably, all eyes will be on Federal Reserve speech to anticipate the United States Federal Reserve next move. 

On the other hand, the Australian buyers could be cautious ahead of the next week’s Reserve Bank of Australia meeting, following the recent statement from the Governor to increase the possibilities of an additional rate cut from the RBA.



Daily Support and Resistance

S3 0.6721

S2 0.6756

S1 0.6777

Pivot Point 0.6792

R1 0.6813

R2 0.6827

R3 0.6863

AUD/USD – Trading Tips

The AUD/USD was trading in a narrow range of 0.6805 – 0.6760 range on Wednesday, but the recent strength in dollar tried to violate the range. On the 4 hour chart, we can see candles closing below 0.6760 area, which is signaling potential breakout and odds of a further drop in the AUD/USD pair. 

Aussie has also crossed below the 50 periods EMA which is another bearish signal for traders. On the lower side, the next support is likely to be found around 0.6720 area. 

All the best for trading. 

 

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