SUMMARY

  • The market expects the Swiss National Bank to keep interest rates stable at 1.50% per annum.
  • Sixth consecutive day of positive closing in the USDJPY, reflecting the continuation of the uptrend, despite the Bank of Japan’s attempts to correct the currency.
  • Canada’s new home price index is expected to rise to +0.2% on a monthly basis, indicating a rise in prices due to increased market demand.
  • The government of Singapore, wants to turn the country into an Artificial Intelligence capital, and to this end, is designing a job training plan in the field.

 

Main events:

  • Swiss SNB interest rate decision.
  • ECB Economic Bulletin
  • Eurogroup meeting
  • Bank of England interest rate decision
  • Bank of England Inflation Report
  • New Unemployment Claims
  • Philadelphia Fed Manufacturing Index
  • EIA crude oil inventories
  • Japan CPI
  • Japan services PMI

EURUSD

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$539
  • Example: 100 pips change in EURUSD price = USD1,000 potential PL.
  • Support 1: 1.0740
  • Support 2: 1.0738
  • Resistance 1: 1.0743
  • Resistance 2: 1.0744

Fundamental Analysis

  • The market expects the Swiss National Bank to keep interest rates stable at 1.50% per annum. Traders are watching the ECB Economic Bulletin and the conclusions of the Eurogroup meeting. Currently, the EURUSD is trading sideways above the 1.0743 level.
  • In the US, new claims for unemployment benefits are expected to come in at 235,000. The Philadelphia Fed manufacturing index is at 4.8, in the zone of economic optimism.
  • U.S. crude oil inventories are expected to decline by -2.8 million barrels, which would cause oil prices to rise, possibly generating more demand for the dollar, allowing it to strengthen against the euro.
  • The currency is moving sideways, halfway between 1.0760 or 1.0720. The RSI stands at 53.28, in the neutral zone, and the short-term moving averages indicate a buy, while the medium and long-term indicate a sell.

USDJPY

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$499
  • Example: 100 pips change in USDJPY price = USD1,000 potential PL.
  • Support 1: 158,06
  • Support 2: 158,02
  • Resistance 1: 158,14
  • Resistance 2: 158,18

Fundamental Analysis

  • Sixth consecutive day of positive closing in the USDJPY, reflecting the continuation of the uptrend, despite the Bank of Japan’s attempts to correct the currency. At the moment the USDJPY is up +0.04% and is trading at 158.14.
  • Traders have taken long positions in anticipation of a favorable CPI result in Japan. On the other hand, analysts believe that the FED could make a first interest rate cut for the September meeting.
  • Retail sales declined in the US, which means a decrease in household demand, due to inflation and high interest rates.
  • Meanwhile, the BOJ Governor continues to convince the need to raise interest rates, as the weaker Yen could lead to higher inflation.
  • The USDJPY is just below the 158.25 resistance, which is likely to be overcome in the next trading session. The RSI is at 67.66, still with room to go before entering the overbought zone.

USDCAD

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$686
  • Example: 100 pips change in USDCAD price = USD1,000 potential PL.
  • Support 1: 1.3712
  • Support 2: 1.3709
  • Resistance 1: 1.3716
  • Resistance 2: 1.3717

Fundamental Analysis

  • Canada’s new home price index is expected to rise +0.2% on a monthly basis, indicating rising prices due to increased market demand. The USDCAD is currently up +0.07% and is trading at 1.3712.
  • Stock market analysts are beginning to see discrepancies between US and Canadian monetary policy. Canadians believe that the Fed is delaying and in turn delaying the BoC’s interest rate cut.
  • One of the BoC’s main concerns is that if they do not cut interest rates, the number of households renewing mortgages by 2025 will do so at higher market rates, impacting liquidity.
  • The BoC is reviewing whether it is prudent to initiate rate cuts by July 2024.
  • USDCAD is trying to break out of 1.3714 support. The RSI is at 52.13, in the neutral zone, while the moving averages indicate selling.

SOURCES

  • Thomson Reuters
  • Market watch
  • Bloomberg
  • Tradingview

 

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