Currency Trading Analysis By Forex Traders

[forum.forex]

June-29, 2022, Daily latest currency trading analysis and market forecast, by forex forum.​

The GBP/USD pair added to the previous day’s heavy losses and remained under intense selling pressure for the second successive day on Wednesday. The downward trajectory picked up pace during the early North American session and dragged spot prices to the 1.2100 neighborhood, or a nearly two-week low.

The US dollar attracted some buying in reaction to hawkish remarks by Fed Chair Jerome Powell and shot to its highest level since June 17. This, in turn, exerted downward pressure on the GBP/USD pair.

Apart from this, sliding US Treasury bond yields, along with a generally positive tone around the US equity markets, might cap gains for the safe-haven USD and limit deeper losses for the GBP/USD pair. That said, sustained weakness below the 1.2100 round-figure mark would be seen as a fresh trigger for bearish traders and set the stage for a further depreciating move.

EUR/USD

The euro gave back earlier gains on Wednesday after European Central Bank President Christine Lagarde said the era of ultra low inflation that preceded the pandemic is unlikely to return.

The euro was last down 0.41% to $1.0475. It had dropped to as low as $1.0486 earlier in the day after data showed June prices in the German state of North Rhine–Westphalia (NRW) had been 0.1% lower than in May, but had recovered after a high readout of Spanish inflation data.

Moreover, The dollar index, which measures the greenback against six counterparts, ticked up 0.412% to 104.880 with investors seeking safety in U.S. assets as stocks declined globally due to the mounting risk of a recession. The dollar index stayed, however, below the two-decade high of 105.79 struck two weeks ago.

US Dollar​

The U.S. dollar, as measured by the DXY index, rose as much as 0.45% to 104.95 on Wednesday after the Federal Reserve chairman offered hawkish remarks at the ECB summit held in Sintra, Portugal. During a panel that also included Christine Lagarde and Andrew Bailey, Jerome Powell reiterated in no uncertain terms that the Fed is committed to using its tools to bring inflation down to 2% and that it will not allow the economy to move to a highly inflationary environment.

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US DOLLAR TECHNICAL ANALYSIS

After encountering support in the 103.80 area earlier this week, the U.S. dollar (DXY) has gathered strength to rebound over the past two sessions, advancing towards key resistance at the 2022 highs near 105.75. If bulls manage to push the index above this barrier in the coming sessions, bullish momentum could accelerate, setting the stage for a rally towards 106.60.

On the other hand, if sellers regain control of the market and prices reverse lower, initial support rests at 103.80/103.60. If we see a drop below this technical floor, the focus shifts to trendline support near 102.50.

USD/JPY

USDJPY managed to gain fresh buying traction around the resistance-turned-support area of 134.42 last week, with the price currently looking to extend its broad uptrend above the 20-year high of 136.70.

Although the clear positive slope in the simple moving averages (SMAs) is still backing the bullish direction in the market, the momentum indicators warrant some caution over the strength in the market.

Should the bulls snap the top of 136.70, the next obstacle could be the 261.8% Fibonacci extension of the 131.34 – 126.35 downleg at 139.15, while the broken support line could immediately cap the rally near 140.70, preventing a spike towards the tentative resistance line seen around 143.53.

EUR/CHF

On the other hand, The euro is struggling on all fronts today but technically, EUR/CHF is the most interesting.

The pair is down 90 pips today to 0.9974. That’s just above the March low of 0.9970. Beyond that we have to go back to the depths of the rug-pull from the Swiss National Bank in 2015.

Given the SNB’s propensity to intervene, this isn’t a real market so I wouldn’t put too much weight on the technicals.

XAU/USD​

Elsewhere, Gold prices dropped sharply during the American session, erasing daily gains. XAU/USD peaked at $1833, the highest level in two days and then turned lower, falling to $1814, slightly above the daily low of $1811.

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[forum.forex]

June-30, 2022, Daily latest currency trading analysis and forex market forecast, by forex forum.​

The USD/JPY slides on Thursday, following a lower-than-expected inflation report, which could deter the US Federal Reserve from tightening at a faster pace amidst odds increasing of recession, keeping investors uneasy. At 135.85, the USD/JPY retreats from daily highs shy of 137.00, back below the 136.00 mark.

Besides that, fears of a recession as global growth stagnated, alongside high inflation, spurred a flight to safe-haven. Particularly in the USD/JPY, the yen remains bid, boosted by the fall in US Treasury yields, weighed by falling US inflation expectations, as illustrated by the five and 10-year break-even inflation rates, easing from YTD highs around 3.59% and 3.02% each, down to 2.59% and 2.36%, respectively.

EUR/USD NEARS MAJOR SUPPORT​

On the other hand, The US Dollar is trading at a fresh 19-year high. USD/JPY is at a fresh 24-year high. EUR/USD, as yet, hasn’t been able to punch below its own 19-year-low.

It’s come close: That low is at 1.0340 and was set in 2017. In May, EUR/USD was hurdling-lower, but pulled up just short of that level at 1.0349. And then again, in June, the pair was punching-lower and a higher-low developed, this time at 1.0359.

At that point I started to look for a pullback in the move but that was cut short, with sellers coming in at the same resistance that’s held the highs for the past couple of weeks at 1.0593.

Sellers are making another attempt at support and so far, that attempt has fallen short. But, this carries breakdown potential into Q3 and the fundamental side is a major driver that doesn’t look to let up anytime soon.

At this point, resistance potential remains at the 1.0500 psychological level.

EUR/JPY

EUR/JPY is currently at 141.58 and in a channel. We have convergence to the downside. If we can break this support, we are looking for a continuation towards the ATR target at the 140.77 area and then the S5 at the 140.47 area.

Watch the DXY for any change in direction. The ATR for the pair currently is 187 pips per day, and its 180-day average is 160 pips per day. DXY is currently up at the time of this post.

GBP/USD​

Economists at TD Securities expect the GBP/USD pair to continue its downfall. Although the Bank of England (BoE) could offer some support the market is too aggresive in its pricing and cable is likely to break under 1.20 in the near-term.

GBP vulnerable on the crosses
“The near-term GBP trajectory is biased to the downside, even though it maintains a pretty hefty discount.”

“The BoE plus fiscal support may help to put a floor in cable but not before a near-term break below 1.20. Still, BoE pricing seems too aggressive relative to our forecast, leaving GBP vulnerable on the crosses.”

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[forum.forex]

July-01, 2022, Daily latest forex trading analysis and currency exchange forecast, by forex forum.​

The Dollar performed exceptionally well through the first half of 2022 – and more broadly over the preceding year. The fundamental stars aligned between a leading Fed tightening regime, perceptions of a greater cushion for the US economy amid forecasts of a global slowdown and the reliability of the currency’s renowned safe haven status. All of these elements are still in play heading into the second half of the year, but the relative potential has deflated.

The underwhelming follows through for the Greenback despite the Fed’s 75 basis point hike in June or during the S&P 500’s steep selloff in the first half of the same month likely indicates the limitations in support of the Dollar for the different dimensions. Can the benchmark currency extend its incredible rally into territory not charted in two decades or is it finding a peak?

USD/CHF

The USD/CHF accelerates and reclaims the 0.9600 figure after harmful US economic data, showing that the economy, although expanding, is doing it at a slower pace than estimated amidst a US Federal Reserve tightening cycle. At the time of writing, the USD/CHF is trading at 0.9624.

US equities are falling, preparing to finish the week with substantial losses. Meanwhile, US Treasury yields have recovered some ground, while the greenback remains in the driver’s seat, as shown by the US Dollar index, up 0.58%, at 105.340.

EUR/USD

EUR/USD bulls got a strong reversal bar following the June 13 bear close test and the June 15 low.
Yesterday was also the third reversal up from the 2017 low since May, which increases the probability of the market getting a rally here.
Bulls see yesterday as a signal bar for a higher low double bottom major trend reversal with June 15.
Bulls hope that the market will break above the neckline (June 27 high) and get a measured move up to 1.0871, which is about the June high.

Bears want the opposite and a breakout below the 2017 low. While it is possible, even if the market does fall below the 2017 low, there will probably be buyers, and the market will create a failed breakout of a double bottom.

Today is Friday, so the weekly chart is important.
Bulls want the market to close above last week’s low of 1.0469. Next, bulls would wish to close above the midpoint of the current week (1.0502).
Bears want the opposite of the bulls and for this week to close below last week’s low and create as small a tail below this week’s bar as possible.

GBP/USD​

According to analysts from Rabobank, if the Bank of England (BoE) do not keep step with the hawkish guidance of the Federal Reserve (Fed) there is a risk that the pound could weaken further. They see the risk of dips in the GBP/USD pair to 1.18 on a three-month view.

“If expectations regarding BoE policy moves do not keep step with the hawkish guidance of the Federal Reserve, it can be argued there is a risk that GBP could weaken further. Yet, GBP is also proving sensitive to fears regarding growth. We see risk of dips to GBP/USD 1.18 on a 3 month view. We expect EUR/GBP to end the year at 0.88.

“The BoE was out of the traps much earlier than either the Fed or the ECB in terms of policy tightening. However, this has failed to give the pound much of a lift, with GBP one of the poorer performing G10 currencies in the year to date. In our view, the inability of GBP to benefit substantially from the BoE’s early rate hiking cycle is due to the market’s focus on the poor growth outlook for the UK.”

EUR/JPY

Concerning EUR/JPY’s daily highs and lows, it’s 1.062% down from its trailing 24 hours low of $142.15 and 1.174% down from its trailing 24 hours high of $142.31.

EUR/JPY’s yearly highs and lows, it’s 13.046% up from its 52-week low and 2.482% down from its 52-week high.

Volatility

EUR/JPY’s last week, last month’s, and last quarter’s current intraday variation average was 0.08%, 0.16%, and 0.57%, respectively.

EUR/JPY’s highest amplitude of average volatility was 0.34% (last week), 0.70% (last month), and 0.57% (last quarter), respectively.

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[forum.forex]

July-04, 2022, Daily latest currency trading analysis and forex market forecast, by forex forum.​

With the little in the way of market moving events over the weekend, global market including the euro has been left at the mercy of market sentiment. The situation in Ukraine and decisions by Russia could weigh negatively on the Eurozone should energy flows into the region be cut. The economic calendar is similarly light this week (see below) giving precedence to recessionary fears leading up to Wednesday’s commencement of high impact events.

This being said, the mornings news helped bolster euro bets after hawkish comments from Deutsche Bank’s CEO around hiking rates quicker than expected while talks around the anti-fragmentation tool is primed to be the talk of the town over the next few weeks. Should the ECB manage to clarify or agree on a path forward regarding ‘anti-fragmentation’, this could be extremely bullish for the euro.

Technical outlook of EUR/USD

Price action on the daily EUR/USD chart shows bulls once again defending the key area of support around the 1.0340 (January 2017 swing low). This key inflection point could mark the start of a extended move lower with the formation of the recent descending triangle pattern which will require a confirmation break below support. A rejection would thus occur if we see a breakout above triangle resistance coinciding with the 1.0601 swing high.

GBP/USD

On the other hand, GBP/USD held above 1.2100 around 1.2114 on Monday with the US dollar struggling to find demand amid a risk-positive market environment. The US dollar index remained in negative territory below 105.00 and the UK’s FTSE 100 stock index was up more than 1%.

The US dollar index was pressured below 105.00 after the appearance of poor PMI data from the ISM. Poor numbers released by the US Institute of Supply Management (ISM) have raised the possibility of an economic recession in the United States. The US ISM conveys the vulnerability of the US economy in all aspects: Manufacturing PMI, New Orders Index and Employment Index.

Support & Resistance

The nearest “support” awaits at 1.2100 which if successfully passed will continue to 1.2050 and then 1.2000. The nearest “resistance” awaits at 1.2170 which if successfully passed will continue to 1.2200 and then 1.2250.

USD/CAD​

The USD/CAD bounces off the 50-day EMA at 1.2830 and approaches the 1.2870 mark on Monday’s trading session, characterized by thin liquidity conditions as North American traders are on a long holiday in the observance of the US Independence day. At 1.2867, the USD/CAD is down 0.11% at the time of writing.

USD/CAD Price Forecast: Technical outlook

The USD/CAD is upward biased in the medium term, but last Friday’s price action formed a huge inverted hammer in an uptrend, and the Relative Strength Index (RSI) accelerating downwards to the midline opened the door for further losses.

Therefore, the USD/CAD first support would be the 50-day EMA at 1.2830. Break below would expose 1.2800, and the 100-day EMA at 1.2737.

USD/CHF

The USD/CHF pair attracted some dip-buying near the 0.9560 region on Monday and refreshed the daily high during the mid-European session, albeit lacked any follow-through strength. The pair was last seen hovering around the 0.9600 mark, well below a one-week high touched on Friday.

Signs of stability in the financial markets undermined demand for safe-haven assets, including the Swiss franc, which turned out to be a key factor that extended some support to the USD/CHF pair. That said, the emergence of some selling around the US dollar failed to impress bullish traders or provide any meaningful impetus to the major.

On the other hand, the CHF continued drawing support from the Swiss National Bank’s shocker on June 16, when it unexpectedly raised interest rates by 50 bps to curb soaring inflation. This warrants caution before positioning for any meaningful upside for the USD/CHF pair amid relatively lighter trading volumes on the back of a holiday in the US.

XAU/USD​

Gold (XAU/USD) closed in negative territory in the first four days of last week and hit its lowest level since the end of January on Friday. It reached the 1,784.40 level, before making a strong technical bounce to recover above the 1,800 later on.

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[forum.forex]

July-05, 2022, Daily latest currency trading analysis and forex market forecast, by forex forum.​

The USD/CHF advances sharply for the third straight day, snapping two days of consecutive losses that dragged the major to print a fresh two-month low of around 0.9495, gaining almost 1% on Tuesday. At the time of writing, the USD/CHF is trading at 0.9687.

On Tuesday, the USD/CHF opened near Monday highs. Nevertheless, it dipped as the London session opened, towards the daily pivot point around 0.9590, to never look back, overcoming on its way up some resistance levels, like the R1 pivot point at 0.9630, the July 1 high at 0.9641, before settling around just shy of the 0.9700 figure.

USD/CHF Daily chart

The USD/CHF daily chart illustrates the pair as upward biased; however, the double top remains in play. If the greenback extends its gains throughout the week and if USD/CHF buyers step in, a break above the 50-day moving average (DMA) at 0.9733 is on the cards and could accelerate a rally towards the 0.9900 mark. However, on its way north, USD/CHF buyers will need to reclaim April 2020 high at around 0.9802.

GBP/USD

GBP/USD outside-weekly reversal now testing key support- risk for price inflection
Weekly resistance, 1.2166, 1.2261, 1.2481– Support 1.1950-1.2021 (Key), 1.1650, 1.16

The British Pound plunged more than 1% against the US Dollar into the start of the week with GBP/USD on the defensive on the heels of an outside-weekly reversal last week. The decline takes Cable into a critical support pivot we’ve been tracking for months and the focus is on possible inflection in the days ahead. These are the updated targets and invalidation levels that matter on the GBP/USD weekly chart heading into July.

A pivot below threatens significant losses for the Pound with such a scenario exposing the 2020 close low at 1.1650, the 1.16-handle and yearly channel support around 1.1450s- both levels of interest for possible downside exhaustion IF reached. Initial weekly resistance now eyed at the May 2020 low-week reversal close at 1.2166 backed closely by the May low-week close at 1.2261. Ultimately, a rally / close above the 23.6% Fibonacci retracement of the 2021 decline / late-May weekly reversal-close at 1.2480/85 would be needed to invalidate the broader downtrend.

US Dollar​

The US Dollar is starting Q3 the way that it’s traded for most of the first-half of the year, showing strength as both fundamentals and techs continue to favor the USD. The currency now sits at a fresh 19-year-high, coming very close to the Fibonacci level at 106.61. As I had looked at on the final day of Q2, EUR/USD was going to be a big driver behind the US Dollar this quarter as the Euro had continued to push down for support tests at the 1.0340 area, giving appearance of breakdown potential that’s already come to fruition just a couple days into Q3 trade.

US DOLLAR SHORTER-TERM

I looked into this theme last Tuesday, highlighting a key support test in the USD as last quarter was winding down. That support at 103.82 was a prior high from 2017 and last week, this served as a launching pad for that move of USD strength.

At this point, the challenge on the long side is trying to avoid chasing the move. And given that this high watermark in the USD comes along with a low watermark in EUR/USD, there could be a propensity for traders to try to fade on or both moves.

EUR/USD

On the other hand, The EUR/USD broke below the 2017 low during the overnight session.

This is a bear breakout of the past two months. Bears want a successful bear breakout and measured move down from the June 27th high to the June 15th bear flag low (1.0103). Next, the bears want a measured move down off the two-month range, which would project to under 1.0000.

The odds are the current bear breakout below the two-month range will be a final flag, and bulls will buy soon. Bears need the current bar to close near its low, and they will also need follow-through tomorrow. More likely, today will close with a tail below the bar, which would be disappointing for the bears.

USD/JPY​

The USD/JPY is almost unchanged in a trading session dominated by risk aversion, triggering flows toward safe-haven assets, and in the FX space, the USD, the JPY, and the CHF are the winners. Nevertheless, due to its risk-off nature, the USD/JPY is barely up 0.07%, trading around the 135.70s area.

Recession and high inflation worries are the headlines of the session. That said, European and US equities tumbled while safe-haven flows dominated the session, with the US Dollar Index, which pairs the greenback vs. six currencies, gaining 1.50%, sitting at 106.716. in the meantime, the USD/JPY seesawed in the 135.50-136.40 area during the day, within familiar ranges.

On the downside, the USD/JPY was capped by the strength of the greenback, but on the upside, falling US Treasury yields, mainly the US 10-year Treasury yields, are nose-diving thirteen basis points, sitting at 2.794%, well below the 3.50% YTD high.

USD/CAD

USD/CAD is at the highs of the day, up 175 pips to 1.3034.

That puts the pair within striking distance of the closing high for the year, which was at 1.3037 and set on June 17. That day they pair also set the intraday high at 1.3079.

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[forum.forex]

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.

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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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[forum.forex]

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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[forum.forex]

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.

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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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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