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July-06, 2022, Currency trading daily analysis and forex market latest forecast, by forex forum.​

The USD/CAD rises for the second consecutive day, extending its weekly gains to almost 1.50%, courtesy of a buoyant greenback and falling crude oil prices. At the time of writing, the USD/CAD is trading at 1.3066, albeit in positive territory, shy of the YTD high around 1.3083.

Sentiment stays negative as USD/CAD traders prepare to digest June’s Federal Reserve Open Market Committee (FOMC) minutes. During the New York Session, US Services and Composite-related PMIs, released by S&P Global and the Institute for Supply Management (ISM), beat expectations but trailed May’s reading, illustrating that the US economy is slowing down.

The US Dollar Index is gaining 0.66%, up at 107.194, underpinned by high US Treasury yields. Contrarily, the US crude oil benchmark, WTI, plunges 2.74% in the day, exchanging hands at $96.62 per barrel, a tailwind for the major.

US Dollar​

On the other hand, The dollar rose to fresh 20-year highs on Wednesday and the euro tumbled to a new two-decade low as rising energy prices and potential shortages cast a long shadow over the euro zone's economy.

The dollar index, which tracks the greenback versus a basket of six currencies, shot above 107, while the euro tumbled below $1.02, both for the first time since December 2002.

The United States is a net energy exporter, while Germany is running a trade deficit for the first time since 1991, he said.

"High interest rates in the U.S. and a trade shift which is beneficial to the U.S. adds to sustainability of the dollar’s strength," he said.

The dollar index rose 0.544%, with the euro down 0.87% to $1.0177.


EUR/USD

Elsewhere, The EUR/USD pair is trading in the red at 1.0169 at the time of writing. The bias remains bearish after taking out strong downside obstacles and because the Dollar Index tries to resume its growth.

Fundamentally, the Eurozone data came in mixed today. The German Factory Orders rose by 0.1% versus a 0.5% drop expected, while the Retail Sales surged by 0.2% versus 0.4% expected.

EUR/USD Forecast!

Staying below the lower median line and making a new lower low, dropping and closing below the 1.0161 could activate further drop towards the warning line. This scenario could bring short-term selling opportunities.

JPY/USD

The rising cost of living continues to squeeze household incomes ahead of Japan’s upper house election on Sunday. A recent poll suggests that while the governing LDP party are likely to secure a majority victory, support for the current prime minister Kishida is waning. Approval ratings for Kishida came in at 54%, down from 59% three weeks ago.

USD/JPY KEY TECHNICAL LEVELS

The 4-hour chart shows price action consolidating above 135 while remaining in what appears to be a symmetrical triangle. Such a pattern is inherently neutral – meaning that we could be seeing signs of bullish fatigue in the pair.

The daily chart further supports the view that the market could be at a critical juncture, as the bullish advance appears to be slowing. 134.50 stands in the way of a lower move for now, with 131.35 a really key level for continued downside momentum. Resistance lies at the October 1998 high of 136.89 and 139.26 if we are to reach a new high.

USD/JPY: Retail trader data shows 23.31% of traders are net-long with the ratio of traders short to long at 3.29 to 1.

EUR/GBP​

Further weakness in the European currency now drags EUR/GBP to new 3-week lows in the 0.8540 region on Wednesday.

EUR/GBP looks to UK politics, EUR selling

EUR/GBP sheds ground for the third session in a row midweek, heavily influenced by the intense decline in the single currency in response to recession fears in the broader Euroland in combination with noticeable ECB inaction.

EUR/GBP key levels

The cross is losing 0.43% at 0.8547 and a breach of 0.8511 (low June 16) would expose 0.8485 (low June 9) and finally 0.8441 (200-day SMA). On the other hand, the next up barrier emerges at 0.8678 (monthly high July 1) followed by 0.8721 (2022 high June 15) and then 0.9085 (2021 high January 6).

AUD/USD

The AUDUSD remains in red and pressuring key supports at 0.6761/58 (new two-year low, posted yesterday / 50% retracement of 0.5509/0.8007 rally).

Soured risk sentiment on growing recession fears that boosted demand for safe-haven dollar, keep the Aussie dollar in defensive mode.

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[Forex Forum]

July-07, 2022, Daily latest currency trading analysis and forex market forecast, by forex forum.​

Euro plummeted more than 2.3% against the US Dollar since the start of the week with EUR/USD now approaching downtrend support at fresh 20-year lows. We’re on the lookout for possible price inflection down here for guidance with US Non-Farm Payrolls on tap tomorrow. These are the updated targets and invalidation levels that matter on the EUR/USD technical price charts.

Technical Outlook

In last month’s Euro Price Outlook we noted that the EUR/USD had, “carved out the weekly / monthly opening-range just below downtrend resistance and the focus is on a breakout in the days ahead.” The range broke just one day later with an outside-day reversal plunging more than 3.5% into the 2016 low / low-day close at 1.0352/85. Euro continued to test this confluence zone into the close of June with a decisive break lower into the start of the week now taking price into downtrend support. While the break does keep the broader downtrend in play, the immediate decline may be vulnerable here and we’re on the lookout for possible inflection off this slope.

JPY/USD

As per the pre-Topkyo analysis on Thursday, USD/JPY Price Analysis: Bears step on advances above 136.00, the pair dropped in for a brief spell in the 135.50s before claiming all the way back above 136.00. The bulls have reclaimed the area but for how long?

It was noted that the hourly candle has all of the makings for a strong bearish close with a focus on the 135.50s.

However, following a trip to the downside, the pair has crept higher with a high of 136.22 so far. Thus now begs the question,'' where now?''

It could be argued that a bearish head and shoulders are being formed on the daily chart.

US Dollar​

The dollar traded little changed against the euro and other trading currencies on Thursday, though sterling held on to gains after Boris Johnson said he was quitting as British prime minister.

Investors are waiting for U.S. jobs data on Friday and consumer price data next week that should signal the pace of inflation and whether the Federal Reserve continues to aggressively hike interest rates when policymakers meet on July 26-27.

The dollar index, which measures the currency against six counterparts, fell 0.047% after Wednesday's peak of 107.27, a level not seen since late 2002. The euro was down 0.07% to $1.0176 after sliding to a two-decade low of 1.01615 on Wednesday.

Investors are grappling with the risks of a recession and whether interest rate hikes will be paused as global demand is under pressure.

The Atlanta Fed's GDPNow model estimates seasonally adjusted GDP growth on an annual basis in the second quarter was -2.1%.

GBP/USD​

After a rough week in UK politics, the British pound reclaimed the 1.2000 level as UK Prime Minister Boris Johnson announced he would resign in autumn. However, he would remain as Prime Minister and announced that his government would not seek new policies or changes and would be left to the new PM. At the time of writing, the GBP/USD is trading at 1.2000.

GBP/USD advances on a soft US dollar, US Initial Jobless Claims rise

US equities remain positive during the day, reflecting recession fears waning and investors’ positive mood. Meanwhile, US Treasury yields rise, and the greenback retracts from 2-year highs, a tailwind for the GBP/USD. The US Dollar Index, a measure of the greenback’s value vs. its peers, has recovered some, up 013%, back above the 107.000 mark.

AUD/USD

The Australian dollar was been battered in June and the selling continued in early July as it fell to the worst levels since the peak of the pandemic. However in the last week it has repeatedly found buyers near 0.6765. It flirted with that level four times, including in Asia today.

Now it's sprung to a two-day high at 0.6848 as the mood in markets improves. I'm surprised the bid isn't even stronger given the report that China is considering a $220 billion infrastructure stimulus.

EUR/GBP

On the other hand, The cross extends a steep fall into third consecutive day and cracks significant support at 0.8501 (top of thick ascending daily Ichimoku cloud).

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[Forex Forum]

July-11, 2022, Daily latest currency trading analysis and forex market forecast, by forex forum.​

The euro took fire from different directions at the start of the week, suffering heavy losses against the U.S. dollar amid risk-off sentiment and broad-based DXY strength. At midday, the EUR/USD was down 1.1% to 1.0069, but earlier in the day it fell as much as 1.3%, flirting with exchange rate parity for the first time since late 2002.

“The next half of 2022 is unlikely to foster conditions for euro appreciation as the European economy could be in a technical recession. Some of the recent euro weakness can be retraced to the ECB emergency meeting on the 15th of June. The spread between an Italian and German 10y bond had reached 240 basis points, prompting serious discussions. The central bank promised an anti-fragmentation tool to help alleviate supposedly unjustified interest-rate spreads.”

GBP/USD

Recently, the GBP/USD pair remained under bearish pressure to challenge the new low around 1.2150 again which was temporarily bypassed few days go. Immediate bullish rejection was expressed around 1.1950 bringing the pair back above 1.2150 again towards higher price levels.

Bullish persistence above 1.2300 (when achieved) will probably enable further bullish continuation towards 1.2550 and probably 1.2650 where further decisions can be taken.

On the other hand, another bearish visits were expected to challenge the price level of 1.1950 when sufficient bearish momentum was expressed.

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USD/CAD

Last week, we took a look at USD/CAD price action as it continues to act as though it wants to finally get some separation from a range that it has been building for the better part of a year. Since May we have seen sponsorship at increasingly higher levels.

This strengthening of price action around the top of an extended range suggests it is about to break, and the move could be quite explosive. USD/CAD is known for lots of deep retracements and its inability to follow through, but when it does get momentum it can be strong and unrelenting.

A breakout into the 13100s could trigger such a move as the ascending wedge forming since early May gives way to a sustained breakout. ‘Looking to the left’ there isn’t anything meaningful until a swing level created in 2020 in the 13400s.

USD/CHF​

The USD/CHF advances firmly on Monday amidst traders’ risk-off sentiment, which bolstered the greenback. However, last month’s Swiss National Bank (SNB) sudden shift towards a hawkish posture put a lid on the USD/CHF climb, retreating from daily highs around 0.9840.

The USD/CHF is trading around the 0.9790s region and remains positive in the day, up by 0.33% amidst a risk-aversion trading day.

USD/CHF 1-Hour chart

The USD/CHF shows an upward trajectory, aligned with the USD/CHF higher time-frame (HT), being the daily chart. Nevertheless, the rally stalled around the R2 daily pivot, and subsequent pullbacks should be bought, as the major would continue to the upside. USD/CHF traders should be aware that the Relative Strenght Index (RSI) in this time frame, as the pair rallies and retraces, the RSI’s has been seesawing within the 50-70 boundaries without reaching overbought conditions, meaning the uptrend is solid.

XAU/USD​

The gold price has been pressured by a resurgence in the greenback at the start of the trading week. The US dollar has torn through last week's highs and had denied the bears in the forex space that were in anticipation of corrections. At the time of writing, DXY, a measure of the US dollar vs. a basket of major currencies is up by over 1% and oscillates around 108 the figure.

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[Forex Forum]

July-13, 2022, Daily latest currency trading analysis and forex market forecast, by forex traders.

EURUSD rebounds after an intraday dive below parity at around 0.9997, for the first time in 20 years, and is staging a recovery during Wednesday’s North American session, sparked by a hot US inflation report revealed by the US Department of Labour, which lifted the major towards the daily high at around 1.0122, before sliding back below the 1.0100 mark. At the time of writing, the EURUSD is trading at around the 1.0080 area, up 0.50%.

EUR/USD bounces off parity on soft US dollar
Sentiment-wise, investors remain pessimistic, as shown by global equities tumbling across the board. in the meantime, the US Dollar Index, a measurement of the greenback’s value against a basket of six currencies, slumps by 0.30%, underpinned by falling US Treasury yields, and is sitting at 107.827. Also, recession fears loom as the US 2s-10s yield curve remains inverted for the seventh consecutive day, at -0161%.

USD/CAD

The Bank of Canada elected to raise it’s benchmark interest rate by 1.00% as the central bank continues to battle rampant and historic inflation. This morning’s rate hike brings the key policy rate to 2.50%, with inflation data set to come out next week. In immediate trade, USDCAD spiked lower below 1.30. Governor Tiff Macklem is set to speak at 11 AM EST.

The Canadian economy continues to run red hot despite recent efforts from the BoC to cool activity. Central banks around the globe have rushed to tighten policy, as inflationary pressures remain widespread and persistent. Canada’s resource-rich status has seen the economy perform well during this recent period of elevated commodity prices. Given underlying economic strength, swaps traders see the BoC taking the policy rate above 3.5% later this year, making it one of the most hawkish tightening paths in the world.

US Dollar

The dollar surged to a 20-year high against a basket of currencies and the euro broke below parity against the greenback after data on Wednesday showed U.S. consumer price inflation surged to a 40-1/2-year high in June.

The consumer price index increased 1.3% last month as gasoline and food costs remained elevated, more than the 1.1% expected by economists polled by Reuters.

The dollar index reached 108.59, the highest since Oct. 2002, from around 107.9 before the data released.

The single currency is being hurt as the region faces an energy crisis sparked by sanctions imposed on Russia due to its invasion of Ukraine.

XAU/USD

Gold Price (XAUUSD) bounced sharply during the last hours and turned positive for the day. The metal bottomed at $1,706 following US inflation data and then redounded rising $40 in a few minutes. It peaked at $1,745, the highest level in three days. Volatility in prices is set to remain elevated on the back of market concerns and wild moves in the Treasury market.

Gold Price not out of the woods yet
Stocks in Wall Street are falling, but are off lows. In money markets, prices reflect inflation as the main concern for Federal Reserve officials in the short-term and a growth crisis later as the main issue. While in the short-term bets for more aggressive rate hikes are rising, prices reflect odds of rate cuts for 2023.

Gold Price shows some not so negative signs
Gold Price rose back above $1,730 and also above the 20-Simple Moving Average in the four-hour chart, currently at $1,735. While above, XAUUSD could holds a positive momentum in the very short-term. The key resistance ahead is $1,750. Above, gold could extend the recovery.

The spike to $1,706 followed by the rebound is a potential reversal that could anticipate further gains, particularly if it breaks above $1,750. A failure, could keep XAUUSD between $1,750 and $1,730.

NZD/USD

The Reserve Bank of New Zealand raised rates by 50 basis points as expected earlier today to 2.5% (see post here).

The move was priced in and the price for the NZDUSD initially moved lower. Although there was a subsequent rise in the London morning session, with the price rise taking the price above the 100 hour MA (blue line). That break failed and backed off. After the US CPI, the price fell to a new cycle low reaching to 0.6080 in the process.

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