The dollar showed an increase in U.S. Treasury Yields last week due to the possibility of the end of US-China Trade war. That came after the comment of President Trump on upcoming US-China Trade talks in October. Another factor adding in the U.S. Dollar Strength was a report of a possible ceasefire in Yemen by Saudi Arabia, created hope for a reduction in prevailing political tensions in the Middle East.
On Sunday, Boris Johnson vowed that he would continue to stay as Prime Minister even if he failed to secure a deal to leave the European Union. He also said to his party that he would deliver Brexit on Oct 31 with or without any agreement.
Economic Calendar – U.K. GDP Figures In Focus
BTC/USD – Daily Analysis
The leading cryptocurrency continues it’s bearish momentum following much inkling of a critical move. Bitcoin has undoubtedly taken a direction for the short-term dumping within the asymmetrical triangle support. Prevailing market price broke the $8,000 support and now looks poised to drop further.
Bitcoin is now in a new trading range of 8200 – 7700. The 50 periods exponential moving average on the 4-hour chart is signaling selling trend in the BTC/USD.
One of the leading technical tool, the Relative Strength Index (RSI) is steady at 77, entering in the bullish zone, suggesting odds of the buying trend in the BTC/USD.
The BTC/USD is now having a current trading range of 8200 – 7720. The bearish breakout of 7700 can extend bearish rally until 7425.
BTC/USD – Daily Technical Levels
Pivot Point 8,093.37
BTC/USD – Daily Forecast
The BTC/USD continues to trade in a narrow trading range of 8,235 – 7,780. Sideways trading is expected today. A drop below 7,780 is likely to drive further selling until 7,460. Whereas, a bullish breakout of 8,200 can lead BTC/USD towards 8,595.
EUR/USD – German Business Climate Improves
During the previous week, EUR/USD closed at $1.09411 after placing a high of $1.09586. Overall, this pair showed a bearish trend last week.
EUR/USD placed a new two-year low of $1.09038 at the end of last week. The pair continued to drop due to the strength of the US Dollar. Also, the US Dollar was out of control last week due to High U.S. Treasury Yields and the auspicious headline from US-China trade talks. That pushed the EUR/USD to a 2-year fresh low.
At the beginning of last week, weak European Economic data related to French & German Manufacturing & Services PMI also created a selling sentiment in the market for EUR/USD. The possibility of Germany falling into recession is also making it hard for EUR/USD to pull its prices upward. Later, there was a lack of Economic releases from Europe for the rest of the week and made the movement of pair dependent on Strong U.S. Dollar.
At the end of last week, the resignation of Sabine Lautenschlaeger from the executive board of European Central Bank in an act of protest against the decision of reviving quantitative easing and loose monetary policy by ECB’s President Mario Draghi, caused further downward movement in EUR/USD.
EUR/USD – Daily Technical Levels
Pivot Point 1.0931
EUR/USD – Daily Forecast
The EUR/USD is still trading in the bearish channel, which is providing it a substantial resistance at 1.0966. It’s the same level which kept the EUR/USD supported during the previous week, and since it’s violated, we may see this level extending resistance to the EUR/USD today. On the lower side, the targeted support stays at 1.0907 today.
GBP/USD – CBI Realized Sales Ahead
On Thursday, GBP/USD opened at 1.23504 and is currently moving at 1.23243 after placing a high of 1.23800 and low of 1.23029.
GBP/USD showed mixed movement today as it has been moving in up and down throughout the day. On Wednesday, the pair dropped sharply due to U.S. Dollar strength.
However, on Thursday the GBP/USD toned-down its losses due to the votes given by M.P.s against granting a mini-recess for Conservative Party Conference. However, the economic reports issued by the U.S. showing results as expected made it difficult for GBP/USD to create an upward trend.
The release of whistleblower allegation on President Trump on Thursday also made U.S. Dollar weak and moved from GBP/USD up a little.
The downward movement of GBP/USD was mainly due to the rise of political anxiety in the U.K. Parliament. The resisting calls for the resignation of U.K.’s President, Boris Johnson, gave the potential for early general elections and put pressure on Sterling. The Pound is likely to remain under pressure until there are hopes for political certainty.
On Friday, the U.K. consumer Confidence index is due to release, in case of failure to impress the market, we may see Sterling trading further bearish.
Under the ongoing Brexit uncertainty, the GBP/USD will remain biased to the downside. Even if the Consumer Confidence came positive, any political development could easily overshadow its effect due to the sensitivity of Sterling towards the events of Parliament.
However, on the other hand, on 17;30 GMT the U.S. Final GDP, came as expected 2.0% along with GDP Price index as 2.4%. The U.S. Goods Trade Balance -72.8B came higher than expected -73.3B. U.S. Unemployment Claims 213K also came slightly more than expected 210K. The only data which was not in favor of USD was the preliminary Wholesale Inventories which came as 0.4% as compared to 0.1%. At 19:00 GMT, the U.S. Pending Home Sales came as 1.6% was in favor of U.S. Dollar. Investors almost ignored the U.S. data released on Thursday because all came as expected.
The pair is showing signs of further downward trend because of persistent lack of development towards a Brexit deal settlement between E.U. & U.K. with a little over month time left for its Deadline.
GBP/USD – Daily Technical Levels
Pivot Point 1.2336
GBP/USD – Daily Forecast
The GBP/USD has crossed below 38.2% Fibonacci retracement level of 1.2340 and currently, it’s holding below this level at 1.2280. As shared in the previous forecast, such a scenario could lead the Cable further lower towards the 50% Fibo levels at 1.2270, and it’s right on the spot. Today 1.2270 is a basic level, and below this, the GBP/USD may trade bearish until 61.8% Fibonacci retracement level of 1.2195.
All the best for today.