Daily Forex Analysis 2018.07.26
SGT Markets | Jul 26, 2018 06:53AM ET
EUR/USD
Eyes on today ECB Interest Rate Decision and ears out to the Press Conference.
German Manufacturing data very good, after German ZEW Economic Sentiment data came relevantly below the expectations.
The Fed raised rates in June and policymakers indicated they expect two more rate increases this year. Powell said nothing to undermine that, and in fact said the economy was poised for several more years of growth.
U.S. Consumer Price Index confirmed the expectations after U.S. PPI (Producer Price Index) ticked higher than expected.
The ECB, which originally had said asset purchases would continue at least through September, decided instead to briefly taper buying before ending buying altogether next year. As for interest rates, they are to remain unchanged “at least” through the summer of 2019, ECB President Draghi said.
We are overbought from neutral. We considered probable another test around 1.17 area and this happened. First consolidation area: 1.1570.
Our special Fibo Retracement is confirming the following S/R levels against the Monthly and Weekly Trendlines obtained by connecting the relevant highs and lows back to 2012:
Weekly Trend: Overbought
1st Resistance: 1.1720
2nd Resistance: 1.1905
1st Support: 1.1567
2nd Support: 1.1490
GBP/USD
UK CPI data ticked down.
Recently, Bank of England Deputy Governor Jon Cunliffe sounded a note of caution about raising interest rates.
The US Dollar is seeing a soft walkback across the G10 broader market, but the Sterling remains subdued as Brexit concerns keep the Pound on the downside.
Yearly lows for the pair remain close by, and bearish pressure remains taut.
Again a weak UK Manufacturing Production release. On the contrary, UK Construction PMI rose to 53.1 in Jun, bettering expectations of an unchanged report from May’s 52.5. This was the strongest reading in the index since Nov last year.
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We are overbought from neutral. We expect a drop back to 1.32, first, and 1.30, finally, and this happened. Next consolidation area could be around 1.3060 Demand area.
Our special Fibo Retracement is confirming the following S/R levels against the Monthly and Weekly Trendlines obtained by connecting the relevant highs and lows back to 2001:
Weekly Trend: Overbought
1st Resistance: 1.3203
2nd Resistance: 1.3285
1st Support: 1.3060
2nd Support: 1.2880
AUD/USD
Australia CPI (Inflation data) ticked down. Last Australia Employment Change looked very strong.
U.S. Consumer Price Index confirmed the expectations, after U.S. PPI (Producer Price Index) ticked higher than expected.
The recent weakness in the Australian housing market, which has been one of the drivers of an economy that has now grown for 27 years without a downturn, has some economists warning of heightened risks of a recession and even a financial crisis.
A possible trade war between the US and China took a step closer to becoming reality.
The Reserve Bank of Australia (RBA) dropped the Meeting Minutes of their latest rate decision, and little of note was there to entice Aussie traders to hit the buy button. The central bank is set to hold steady on rates for the foreseeable future as Australian growth figures continue to miss the mark.
We are overbought from neutral. We consider very probable a new test in 0.73 area for testing a strong Support area.
Our special Fibo Retracements are confirming the following S/R levels against the Monthly and Weekly Trendlines obtained by connecting the relevant highs and lows back to 2012:
Weekly Trend: Overbought
1st Resistance: 0.7408
2nd Resistance: 0.7480
1st Support: 0.7339
2nd Support: 0.7301
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