What will happen? The US Q2 Gross Domestic Product will be announced at 15:30 MT time (GMT+3) on Thursday, July 29…
How to trade EUR/USD and GBP/USD on Monday?
- The week has started with the mixed data from China. China’s data is important as it sets the risk sentiment. Industrial production with retail sales jumped, exceeding market estimates. However, it was offset by worse-than-expected numbers of fixed asset investment and unemployment rate. Overall, analysts consider China has still shown a strong rebound.
- These days, investors worry about inflation risks. We already can see it in the rotation in the stock market from growth such as Amazon and Facebook to value stocks such as Johnson & Johnson, Procter & Gamble as it’s considered values stocks will survive anyway.
- If inflation rises over 2%, Fed may break its promise to keep rates low for longer and will increase interest rates faster than the market expects. This will lead to the market shock: stocks and riskier assets will drop and the USD will surge.
- However, Treasury Secretary Janet Yellen reassured that the risk is “small and manageable” due to Biden’s $1.9 trillion stimulus.
EUR/USD has just broken through the 23.6% Fibonacci retracement level of 1.1930. Thus, the doors are open to the psychological mark of 1.1900, which the pair shouldn’t cross on the first try. The move below it will drive the pair down to the next support of 1.1875. On the flip side, if it reverses, it may jump to the intraday high of 1.1960 and then if it breaks it, the pair may rise to the 38.2% Fibo level of 1.1990.
GBP/USD is more likely to reverse from the 50-period moving average of 1.3900 and rise to the 38.2% Fibo level of 1.3950. The move above this resistance will drive the price to 1.4000. On the flip side, if the pound falls below the support zone of 1.3900-1.3885, the way to 1.3850 will be open.
USD/JPY is getting closer to the resistance of 109.50, which it’s unlikely to cross as the RSI indicator is above the 70.0 level, signaling the overbought area. Thus, the pullback should happen soon. Support levels are the low of March 10 at 108.35 and 107.00.
The Canadian dollar gained due to the high oil prices. USD/CAD is falling to the psychological level of 1.2400. The move below it will drive the pair down to the next round number of 1.2350. Resistance levels are at the recent highs of 1.2560 and 1.2610.
Today the Fed will make a policy statement at 21:00 GMT+3. This event will affect all the currency pairs with the USD and thus almost the all Forex market!
Hong Kong stock index extended a decline sparked by China’s tech crackdown. Tesla posted better-than-expected results. Jump in!
What events to follow and how to trade during the week of July 2-6?
EUR/USD retraced to 1.1870 after breaking out this level. It should be just a natural sell-off ahead of the further rally up.
The Fed held a much-awaited meeting yesterday. The bank hasn’t made any policy changes. As a result, the USD weakened and EUR/USD rocketed. Jump in to know all the latest news!