SUMMARY

  • Spanish GDP increased by 2.5% year-on-year. Traders are eagerly awaiting the ECB statement.
  • Stock analysts expect the Bank of England to start cutting interest rates at the August 2024 meeting. This would cause the GBP/USD to fall.
  • US bond yields have fallen, so traders are holding long positions in USDJPY. Currently, the currency is up +0.08% and trades at 159.82, very close to the 160 level, which could be the Bank of Japan’s intervention target.

 

Main events:

  • Canadian wholesale sales
  • U.S. new home sales
  • EIA Crude Oil Inventories

EURUSD

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$539
  • Example: 100 pips change in EURUSD price = USD1,000 potential PL.
  • Support 1: 1,0711
  • Support 2: 1,0708
  • Resistance 1: 1,0717
  • Resistance 2: 1,0720

Fundamental Analysis

  • Spanish GDP increased by 2.5% year-on-year. Traders are eagerly awaiting the ECB statement. In the United States, new home sales and crude oil inventories will be published. For the time being, the EURUSD is stable at 1.0714.
  • European Central Bank officials have indicated that two more rate cuts are possible in the remainder of 2024.
  • As for the Fed, analysts believe the bank will cut rates at the November or December 2024 meeting.
  • The gap between the Fed’s and ECB’s monetary policy strategies continues to widen, so EURUSD weakness is expected.
  • The currency remains sideways. The price remains at 1.0710. RSI is at 44.05, in the neutral zone. The moving averages indicate a massive sell-off. The price could fall to 1.0690 support, and then resume the uptrend.

GBPUSD

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$686
  • Example: 100 pips change in GBPUSD price = USD1,000 potential PL.
  • Support 1: 1.2684
  • Support 2: 1.2680
  • Resistance 1: 1.2693
  • Resistance 2: 1.2698

Fundamental Analysis

  • Stock analysts expect the Bank of England to start cutting interest rates at the August 2024 meeting. This would cause the GBP/USD to fall. The currency is currently trading sideways at 1.2686.
  • According to analysts, Bank of England officials are waiting for the results of the UK election on July 4, 2024 to start executing the monetary policy strategy.
  • GBPUSD remains at 1.2686, halfway between the resistance zone and the next support level. RSI is at 52.33, in neutral territory, so the sideways trend could continue. The moving averages indicate buying.
  • WikiLeaks founder Julian Assange has left the UK after being released from prison.
  • The British Labor Party has suspended its candidate following corruption scandals.

USDJPY

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$499
  • Example: 100 pips change in USDJPY price = USD1,000 potential PL.
  • Support 1: 159,76
  • Support 2: 159,69
  • Resistance 1: 159,89
  • Resistance 2: 159,95

Fundamental Analysis

  • As US bond yields have fallen, traders are holding long positions in USDJPY. The currency is currently up +0.08% and trades at 159.82, very close to the 160 level, which could be the Bank of Japan’s intervention target.
  • BoJ officials have announced that they will take appropriate measures to respond quickly to the yen’s depreciation.
  • In the absence of BoJ intervention, the currency could rise towards 162.50 in the coming days. For the time being, the currency remains in a resistance zone. The price is above its 200-day moving average. The RSI is at 62.67, very close to the overbought zone, which could lead to profit taking. The moving averages indicate buying.
  • Japan’s Nikkei 225 is currently up 1.08% and trades at 39,730 on fears of intervention by the Bank of Japan in the currency market.

SOURCES

  • Thomson Reuters
  • Market watch
  • Bloomberg
  • Tradingview

 

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