USD Gains Momentum
The US dollar index breaks one resistance after another. Read the report to learn the next target for the US dollar index!
What drives the market on July 8?
Fundamental factors
- US new virus cases surged again on Tuesday. California and Texas recorded 10 000 infections each. Investors are worried that it will slow down the economic recovery.
- The Australian new infections rose, as well. Its government imposed strict restrictions. If Australian citizens decide to go to China, they may be even arrested. It weighed on the aussie.
- The Trump administration considers to break the Hong Kong dollar peg to punish China. In other words, they want to stop businesses from investing in the city or limiting the ability of Hong Kong banks to buy US dollars. You may think the Hong Kong dollar is insignificant for the rest of the world and you may be right. However, Hong Kong ranks the third largest USD trading center in the world after New York and London. Also, the city plays the important role of a channel between the USA and China. Just think about it, 73% of the city's stock market value is of companies from the mainland. If the USA managed to do that, it will deteriorate Sino-American tensions.
- EU’s Brexit negotiators arrived in London on Tuesday. The progress in the Brexit deal will encourage investors to go long on the British pound.
Watch our daily forex trading plan!
Technical tips
XAU/USD
Gold is the main focus of attention today. It surged to $1 795. There are just few steps left to achieve the $1 800 mark. Anyway, look for support levels at the yesterday low at $1 778 and then at $1 770.
EUR/USD
The Euro is loosening against the US dollar. It’s moving down towards the strong support at the intersection of the 50- and 100-period moving averages at 1.1255. The move below this level may push the price to the next support at 1.1215. Resistance levels are at 1.1300 and 1.3300.
USD/CNH
USD/CNH has just broken through the support at 7.0200 after the short correction. We can notice that red candles prevail and the long term trend is downward. Based on that, we can expect the further falling. It will meet the support at 6.9650. If it breaks it down, it will open doors towards the next barrier at the low of March 4 at 6.9200. Resistance levels are at 7.0920 and 7.1000.
Oil
The WTI oil has been trading near $40 a barrel for quite a long time. That proved the sustainable recovery of the oil market. Watch out the crude oil inventories report today at 17:30 MT time. It will add the fresh volatility. If the data comes better than the forecast, the WTI oil will rise, otherwise-fall. Don’t miss out this chance!
To trade WTI with FBS you need to choose WTI-20Q.
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