While people enjoy summer holidays, the financial markets are experiencing thin volatility and lack of trading volume, which is why the Asian session has remained a bit quiet from the trading viewpoint. During the previous sessions, a decline in Treasury yields sent bank shares lower, which undermined the financial sector-weighted S&P 500 and Dow.
Benchmark 10-year yield dropped nearly five basis points on Tuesday, or 0.05 percentage points, to 1.54% and triggered the risk-off sentiment for the second time this week.
Bitcoin is trading at $10,200 amidst a building bearish momentum. BTC/USD is likely to plunge under $10,000 and even explore last week’s lows $9,469 as Bitcoin has already completed 61.8% Fibonacci retracement on the 4 hourly timeframes.
Economic Calendar – FOMC Meeting Minutes
As the markets prepare for the FOMC meeting minutes due out later today, Boris Johnson will be in focus early in the day.
EUR/USD – Going Nowhere, Sideways Channel Plays
On Wednesday, the EUR/USD pair continues to consolidate within a narrow trading range of 1.1115 – 1.1070 as investors are finding no solid reason to determine the trend in Euro and US dollar.
Previously, the single currency Euro experienced a macroeconomic setback, as data from the Union was generally discouraging. However, German PPI m/m data managed to underpin Euro’s demand.
German PPI – For July 2019, the PPI (Producers Price Index) soared by 1.1% compared with the similar month of the preceding year. In June 2019 the annual rate of change all over had been +1.2%, as reported by the Federal Statistical Office. Compared with the previous month of June 2019, the overall index expanded slightly by 0.1% in July 2019.
On the technical side, the EUR/USD hasn’t registered much improvement as the pair is still directionless, rangebound within a tight trading range of 45 pips, from 1.1115 to 1.1070. The risk continues for the downside, although to validate a bearish rally, the pair would need to violate 1.1065 on the lower side.
Today, Investors are still likely to trade EUR/USD with a bearish bias, but most of the price action will be determined by the FOMC meeting minutes during the New York session.
EUR/USD – Daily Technical Levels
Pivot Point 1.1154
EUR/USD – Daily Forecast
I will be staying bearish below 1.1115 to target 1.1060 support areas. Below this, the EUR/USD can extend bearish rally until 1.1030 today.
AUD/USD – Choppy Trading Dominate
At the starting of the Asian session, the AUD/USD currency pair currently trading near 0.6780 and has little changed, due to different comments from the United States policymakers confusing Australian Dollar traders between a lack of data at home.
While, on the other side, the United States President Donald Trump said that they are not ready to make a trade deal with China right now. Possibly the Secretary of States Mike Pompeo said bit upbeat comments regarding the United States and China trade deal and also said he thinks that they will reach on a positive result before the 2020 elections.
Moreover, the statement came from the Federal Reserve Bank of San Francisco’s President Mary C. Daly, who appreciated the United States employment statistics instead of the expectation of recession down.
The market again secured from risk during the earlier day due to light economic calendar and political uncertainty in Italy. Therefore, the United States treasury yields lost a major part of their previous improvements. It should also keep in mind that minutes comment of the Reserve Bank of Australia’s newest monetary policy meeting restated the readiness to modify the monetary policy.
Daily Support and Resistance
Pivot Point 0.678
AUD/USD – Daily Forecast
I’m looking to stay bullish above 0.678 and bearish below the same level to target quick 30 pips on either side.
GBP/USD – Steady Ahead of FOMC
The trading is ultimate boils down to monetary policy, with the FOMC meeting minutes and the Jackson Hole Symposium key for the majors. The lack of stats left the markets to look ahead to the FOMC meeting minutes due out later this afternoon.
Sterling is consolidating within a narrow trading range of 1.2085 – 1.2140. This range is likely to keep GBP/USD choppy, offering scalpers quick trade opportunities. But later today, we may have a breakout on the release of economic data.
Closing of candles outside of downward trendline resistance 1.2140 is now likely to bring bullish moves in the Cable. For now, the same level is likely to work as a support for the Cable. On the upperside, resistance stays at 1.2207, while support is likely to be 1.2140, and below this, the 1.2100 level may underpin the GBP/USD.
GBP/USD – Daily Technical Levels
Pivot Point 1.2136
GBP/USD – Daily Forecast
I’m looking to stay bullish above 1.2136 with a target of 1.2170 and 1.2200 on the upper side. Conversely, bearish positions are suggested below 1.2085 support.
All the best!