Market Comment
We had a generally quieted begin to the trading week as speculators both the UK and the US enjoyed long weekends.
Securities & Stock exchanges had a blended day, and the dollar recovered a portion of the lost ground from Friday.
The primary focal point of the day was on President Trump’s trek to Japan, and any reports on the U.S.’s global exchange strategy and the aftermath from the E.U. is likely to rule the market.
Indeed the market got blended messages from the President as he showed that discussions were going great with Japan yet, he is looking to add further traiff on the Chinese products.
Oil gained back some more of last weeks losses but remains at more muted levels, WTI at $59 and Brent near $70.
EUR/USD Consolidates Below Resistance – Is It Worth Selling?
The euro traded nowhere on Monday, but it’s trading slightly bearish on Tuesday after the results of European Union political elections declared that pro-EU parties continued to two-thirds of seats, limiting the increases of their euro-sceptic opponents.
EUR/USD was little changed at 1.1199, close to one-and-a-half-week highs, having pulled away from Thursday’s two-year trough of 1.1105. The EUR/USD bounced off slightly from 1.1150 to 1.1160 during the last week as the trade war between the U.S. and China is not moving off and even going critical as Google is restricting its communications with Huawei, the Chinese telecommunications beast.
Technically, there’s a ‘bearish engulfing’, which has been validated the setup. It’s expected to have a restricted upward correction towards the nearest resistance at 1.1195 in the coming days.
Following the pullback from this level could be an opening point for a drop towards another support at 1.1125 and 1.1064. If any bullish pattern completes around 1.1130 level, there’ll be a moment to have an upward correction until 1.1168 and 1.11850.
Support and Resistance
R3: 1.1224
R2: 1.1195
R1: 1.1176
Key Trading Level: 1.1166
S1: 1.1147
S2: 1.1136
S3: 1.1107
EUR/USD – Trade Tip
Consider staying bearish under 1.11750 to target 1.1130 at first and then 1.1101.
NZD/USD – Bearish Channel Breakout & RBNZ Financial Stability Report
At 21 GMT, the Reserve Bank of New Zealand is due to release Financial Stability Report. The New Zealand Dollar attempts to retrace the drop following the RBNZ rate cut, but NZD/USD holds at risk of delivering back the rebound from the monthly-low (0.6482) as the central bank endorses a ‘downward bias’ for the official cash rate (OCR).
The primary trend seems to reverse from bearish to bullish, especially after the violation of a bearish channel. The NZD/USD is approaching its resistance at 0.6586 (100% Fibonacci extension, 50% & 23.6% Fibonacci retracement, horizontal pullback resistance) where it is could reverse down to its support at 0.6486 (horizontal swing low support).
Stochastic (55, 5, 3) is approaching its resistance at 89% where a corresponding reversal is expected.
Support and Resistance
R3: 0.6798
R2: 0.6692
R1: 0.6646
Key Trading Level: 0.6585
S1: 0.6539
S2: 0.6479
S3: 0.6372
NZD/USD – Trade Tip
Consider buying over 0.6540 and selling below the same level to target quick 50 pips on both sides. All the best for today!
