Daily Market Analysis by ForexMart

GBP/USD Fundamental Analysis: July 24, 2017

The market had a difficulty trading the British pound against the U.S. dollar pair for the past week. After the release of the weaker CPI and retail sales data from the U.S. last week, the pair surged to 1.3030 region and reach beyond the 1.31 region for a short period of time for that day. The traders anticipate the trend last week to be continued since the greenback is not performing well as of now.

The weakened dollar did not help the pound that frustrated traders. The pair underwent correction lower than 1.30 level during the early days of the week which was influenced by the minor recovery of the dollar which was also exhibited by the euro. It resulted to poor performance in the lower channel. Moreover, the less-than-expected economic data from the U.K. deviated the strong trend of data in the past few months. Although, it is anticipated that the market could recover when the dollar depreciated once again but it failed.

The dollar weakened as the end of the week approaches with the outcome of investigations regarding the business transaction of Trump concern rises. Although, most of other currencies take advantage of this situation to move higher. As for the GBP/USD pair, it stays relatively calm. Despite the strong data of retail sales report from the U.K., it was not sufficient to push the pair higher as it closed the week lower than 1.30 level. It seems that there are risks to incur losses in the coming week influenced by the uncertainty from Brexit which continues to affect the British currency.

For today, there are not many economic events for the week as the end of the month approaches and data subsided. For next week, the FOMC statement from the U.S. is anticipated to be announced. Hence, the GBP/USD pair is anticipated to proceed with a weaker trading condition close to the 1.3030 regions as a significant psychological level.
 
EUR/USD Fundamental Analysis: July 24, 2017

Draghi sounded dovish during the latest press conference and he was aware of the rally of the euro since the economic data favor the currency. Although the Draghi is trying to bring the price down as expressed in his speech, the market has reacted oppositely and bought the currency even more and push the price of the EUR/USD pair towards 1.15 level. Soon after, the news regarding the business transaction of Trump investigation, a selloff in the dollar occurred that influenced the price to move towards 1.16 region. The week closed above the said region.

In the upcoming week, we are heading towards the end of the month where the economic news and events dry up and hence we do not have much news in the coming week apart from the FOMC statement. But considering how bullish the EURUSD pair has been, we believe that the next target for the pair would be the 1.18 region.

As the last day of the week and the end of the month approaches, the pair will mostly persist in a neutral stance for today. There are less economic events except for the FOMC statement recently. The next target of the pair would be at 1.18 region for short term. Once this has been achieved, a correction could follow suit as it has been beyond its highs for the year and the highest since 2015. The number of short positions for the dollar will most likely increase that poses a lot of risks and uncertainty especially for dollar bears who would immediately exit the market once it goes up.
 
USD/JPY Technical Analysis: July 24, 2017

The U.S. dollar against the Japanese yen descended during the Friday session as it gaps lower than the 111.50 level. Hence, the market declined directed to the 111 region which is a significant psychological level for this pair. Yet, the main support should be found near the 110 handle and a rally from this would open selling opportunities in the market. The 110 region is massively supportive but a retest is still needed. It seems that the market is risk sensitive but the Federal Reserve announcement still has a big impact on the pair.

Traders are beginning to presume that the Fed Reserve will slowly raise its rates where Janet Yellen has said recently saying that the data will be relative to rate hikes. This could reverse the market trend completely.

The 110 region is an area could become relevantly supportive. A bullish pressure is anticipated in that area which will be additionally supported by statements from major players such as the Federal Reserve. It is probable for the market to become bearish in the succeeding trading session but there will also be a downward pressure that restricts the trade movement. If the trend breaks lower than the 109 level then the market could collapse.
 
GBP/USD Fundamental Analysis: July 26, 2017

The price trend of the GBP/USD pair appeared to follow the path of the euro-dollar pair throughout the trading day, which is already expected because of fewer economic data in many countries since it was the last week of July.

It is important to note that the price action yesterday served as the support for the Cable which is the 1.3000 level, and anticipated to provide confidence for the bulls.

This type of buying support in the 1.28 area helped the pound-dollar pair to push near the 1.31 mark towards the close of the week. This support region is predicted to move upwards and we see it touching the 1.300.

On one side, the mentioned level clearly shows the Bears’ target who aims to drive the prices lower to trigger panic selling.

To a certain limited extent, the area around 1.3000 was maintained very well during this week and continue to serves as a launch pad for the pound bulls, pushing it to a higher point.

We only expect a single set of economic data for this week which is the FOMC meeting minutes to be released later this day.

The dollar was able to recover yesterday after the strong consumer confidence data along with the healthcare bill overhaul, considering the fact that the Republicans wants to continue the debate.

It is important to see if the dollar recovery continues to this day and will the focus remain to Fed minutes to know the thoughts of the Federal Reserve regarding the economic and monetary policy, lastly, to know if there’s such hint for the next rate increase from the United States.
 
EUR/USD Fundamental Analysis: July 26, 2017

The Euro against the U.S. dollar had a correction yesterday and the greenback recovered as the end of the day approaches. Although the dollar was at a disadvantage in the early part of the day, it supported the pair to move directed to 1.1712 which was similar to the highest level attained over the past two years. However, the pair dropped to 1.17 for the day.

During the U.S. session, there was a strong consumer confidence data from the U.S. that assisted the dollar for a minor recovery. The news when Republicans voted for another debate regarding the health care supported the dollar signifying that the Trump to gain support again for the bill to increase its potential to be approved. Hence, the dollar underwent recovery for a while and assisted the pair to decline towards the 1.1640 region where it is currently trading.

The pair was pounded in the past few weeks because of the problem that the Trump administrations entered in and the expected economic data and the Fed that do not support the currency. This still needs to be observed on what will happen this day as the FOMC minutes to be released later. The market is currently in a consolidation phase as of now since traders are waiting for the minutes meeting which is the only solid economic data for the week.

The minutes are to scheduled late in the US session as the market waits and monitor closely to look for hints on the schedule of the next rate hike. A weak result on the incoming economic data suggests a rate hike that could be delayed although a majority of the market is expecting it to happen this year and the minutes would hint on the next rate hike.
 
EUR/USD Technical Analysis: July 27, 2017

The U.S moved a little bit higher as US stock hits the renewed all-time highs. The yields of ECB eased following the rise on Tuesday amid huge gains from the European markets.

According to Fed, the changes on the normalization policy is expected to be release sooner or later upon talking about the balance sheet. Moreover, the interest rates were left unchanged.

The Federal Reserve further mentioned that the economy is driving below 2%.

Ewald Nowotny, a member of ECB’s governing council, claimed that the tapering is gaining traction, despite his opposing views about the final end date for asset purchases. This indicates that the European Central Bank are still committed to be careful after removing accommodation. The International Monetary Fund (IMF) wants the ECB to preserve its stimulus despite the low inflation and wage increase.

Furthermore, Greece made some steps to return to normal as the Italian sentiment rebounded. The EURUSD pair formed a Doji day which shows a pattern that suggests indecision conforming to the judgment of the Fed on Wednesday.

No one had expected that the Fed will describe QE tightening, hence any hint for normalization could probably provide a pause to the rally of stocks.

Higher American yields are dragging the pair lower and have been canceled out by the potential trend in ECB’s quantitative easing.

The euro-dollar pair generated a bull flag formation which serves as a pause to renewed higher. The support pierced the 1.1562 region around the 10-day moving average. The resistance, on the other hand, entered the 1.1712 range which is close to the peaks of July.

The momentum came in neutral as the MACD histogram prints in the black, but the trajectory headed lower and reflecting a consolidation.

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GBP/USD Technical Analysis: July 27, 2017

The British pound against the U.S. dollar moved sideways in the beginning of the Wednesday session. There is sufficient support found at the 1.30 level which pushes the trend to the upside. Later on, it is possible for the market to break the current psychological levels with the FOMC announcement to be released in the afternoon. Nevertheless, the markets were quiet as they wait for any hints from the Federal Reserve.

If traders can maintain traders more than the 1.30 level, the GBP/USD pair could move higher towards 1.3125 level and even much higher. There are still buying opportunities on the lows in the market since the British pound became cheaper.

Buying lows in the market are suggested instead of selling until a breakdown occurs below the massive support level. Unless it reaches lower than 1.2950, it is alright to sell the pair. However, if it drops even much lower, it is possible to drop even much more that would change the trend when it happens.

Buyers are more aggressive and it would not take long before they return to the market. If the trend gaps in the upper region, it will most likely reach the 1.3450 level which is possible after some time. Many major events that would come out from politicians could affect the British currency. The uptrend will presumably to continue in the long-term. Also, the pullbacks could offer opportunities in the market at a cheaper level.
 
USD/CAD Fundamental Analysis: July 31, 2017

The USD/CAD was able to obtain the highly-needed bounce on Thursday, which was previously mentioned since the week started. It is followed by the decline of the pair in the past few weeks because of the strong level in which the pair sits together with the possibility that this region is the buyer’s final stand.

As the strength of the dollar recovered, it helped the pair to soar high and affirmed lot of things in the following days. However, there is already a warning that the downward will be very intact and needed much time to return.

It is also mentioned that bears will use any bounce from the commodity-linked pair as an opportunity to sell prices highers. Any hints of recovery seen on Friday had plunged conclusively while the USDCAD appeared to be weak as usual.

The sluggish stance was triggered by the GDP figures of Canada and the United States. But the US data showed a marginally better than expected, while the Thursday’s data from the US prompted the market to have higher expectations from the gross domestic product. On one side, the Canadian GDP came in very strong and able to have another rate increase soon.

This led to a reversal of the whole trend since yesterday and the pair lies in below the 1.24 level which might become weaker.

Ultimately, there are no any major economic releases either from US or Canada. Therefore, consolidation is safely expected together with ranging of the dollar which is at disadvantage because of the developments over the White House during weekends.

Furthermore, it is predicted the USDCAD to remain in pressured area as the markets look forward to a plenty of data expected in the latter part of the week.
 
EUR/GBP Technical Analysis: July 31, 2017

The Euro against the British pound surged during the Friday session although there some resistance found close to the 0.8960 level. The market had a roll over for the few hours but was limited by the resistance level. There is much support found below that proceeds to market higher.

The next target would the 0.90 level and if the price breaks more and pushes the price towards 0.92 level for long-term. The 0.89 level below persists to be supportive that makes a breakdown far to happen. As shown in the weekly chart, the market sees the 0.89 level to be the support level.

Traders proceed to buy on the lows as it persists in supporting the euro currency. A breakout of both currencies occurred against the U.S. dollar although the market favors the euro more which is reflected in the pair. After some time, there is a lot of volatility in the market directed upward. Shorting this pair may not be ideal but the once the price breaks higher than the 0.90 level. Buyers will turn more hostile as the psychological level of resistance. However, if the price gaps below the 0.89 level which is extraordinarily bearish that would adjust the short-term trend.
 
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