SUMMARY

  • Traders start the week focused on the statements of Christine Lagarde as president of the ECB.
  • After reaching a price of 158.26, the Bank of Japan’s intervention in the currency market was presented again.
  • Traders are watching the number of new housing starts in Canada, which is expected at 247K. On the other hand, the country’s Foreign Assets Investment is expected at 12.30 Billion.
  • In Asia, businessmen in China are awaiting an economic stimulus plan from the government. The main objective is to return to a double-digit economic growth rate.

 

Main events:

  • Eurogroup meeting
  • Empire State Manufacturing Index
  • FOMC statements
  • BoA interest rate decision

EURUSD

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$539
  • Example: 100 pips change in EURUSD price = USD1,000 potential PL.
  • Support 1: 1.0701
  • Support 2: 1.0697
  • Resistance 1: 1.0707
  • Resistance 2: 1.0709

Fundamental Analysis

  • Traders start the week focused on Christine Lagarde’s statements as ECB president. Tomorrow, the Eurogroup meeting begins, where one of the main topics will be the effect of the ECB rate cut.
  • In the US, the Empire State manufacturing index is expected to come in at -12.50, meaning that the top 200 manufacturing producers in New York State believe that economic conditions are deteriorating.
  • Today we will hear statements from FOMC policymakers, who will continue to discuss the performance of U.S. inflation.
  • EURUSD has bounced off support at 1.06691. It is currently sideways at 1.0699. The RSI is at 41.60, in the neutral zone, so the currency can hold above this level. The moving averages indicate a massive sell-off.
  • The European Championship has started and, with it, companies are investing heavily in advertising. The optimism of the competition may lead to higher euro buying volume and upward movements in European stock indices.

USDJPY

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$499
  • Example: 100 pips change in USDJPY price = USD1,000 potential PL.
  • Support 1: 157.41
  • Support 2: 157.33
  • Resistance 1: 157.54
  • Resistance 2: 157.59

Fundamental Analysis

  • After reaching a price of 158.26, the Bank of Japan intervened again in the foreign exchange market. This generated a rapid correction towards the 156.87 support. However, as technically the USDJPY is still in an uptrend, the price quickly recovered the current 157.44 zone.
  • The USDJPY is currently up +0.05% and is trading at 157.44. The price is trying to break out of the support zone, in order to move towards the 158 resistance again. The RSI is at 53.70, in neutral zone, so the bullish movement is maintained. The moving averages indicate buying.
  • In Asia, China’s industrial production index rose +5.6%, although the market was expecting 6.2%. The country’s unemployment rate remained at 5%, meeting market expectation.
  • In Australia, interest rates are expected to remain stable, which could generate high volatility in the currency.

USDCAD

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$686
  • Example: 100 pips change in USDCAD price = USD1,000 potential PL.
  • Support 1: 1.3737
  • Support 2: 1.3734
  • Resistance 1: 1.3743
  • Resistance 2: 1.3746

Fundamental Analysis

  • After reaching a price of 158.26, the Bank of Japan intervened again in the foreign exchange market. This generated a rapid correction towards the 156.87 support. However, as technically the USDJPY is still in an uptrend, the price quickly recovered the current 157.44 zone.
  • The USDJPY is currently up +0.05% and is trading at 157.44. The price is trying to break out of the support zone, in order to move towards the 158 resistance again. The RSI is at 53.70, in neutral zone, so the bullish movement is maintained. The moving averages indicate buying.
  • In Asia, China’s industrial production index rose +5.6%, although the market was expecting 6.2%. The country’s unemployment rate remained at 5%, meeting market expectation.
  • In Australia, interest rates are expected to remain stable, which could generate high volatility in the currency.

SOURCES

  • Thomson Reuters
  • Market watch
  • Bloomberg
  • Tradingview

 

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