Daily FX Analysis, Aug 20 –Major Trade Setups In Forex & German PPI Ahead!

The Asian session has been a bit quiet on the economic calendar as traders seem to be out on summer holidays, so we are facing a lack of volatility and trade opportunities in the market. Thus, there are no quantitative stats to present direction through the early part of the day. On the monetary policy front, the RBA meeting minutes provided the Aussie Dollar with direction.

Quick Look on RBA Meeting Minutes

Prominent features from the RBA meeting minutes included:

BTC/USD

Bitcoin price rebounded recently and climbed above the $10,700 resistance against the US Dollar. The price is currently trading nicely above $10,500, but facing hurdles near $11,000.There is a mixing bullish trend line likely to extend support near $10,250 on the hourly chart of the BTC/USD pair. The price is likely to climb higher if it breaks the $11,000 resistance area in the near term.

Economic Calendar – German PPI In Focus

EUR/USD – Horizontal Resistance Pushes Euro Lower

On Tuesday, the EUR/USD pair lost some ground, concluding the day in the 1.1080 area after topping for the day at 1.1113. The single currency Euro experienced a macroeconomic setback, as data from the Union was generally discouraging. The EUR/USD pair sellers were testing a 78.6% Fibonacci Retracement level or 1.1081 level.

On the economic calendar, the worse than expected Eurozone July Consumer Price Index (CPI) was something worth mentioning that recorded 0.1% beneath market expectations. Moreover, the July MoM CPI Core reported -0.6% above 0.3% estimates. Any developments from China or the U.S. on trade discussions will influence as the EUR struggles following last week’s dovish ECB tone.

Technical indicators seem to be directionless within negative levels during the day, as the pair was restricted to a 30 pips’ intraday range. The risk continues for the downside, although to validate a bearish rally, the pair would need to violate 1.1065 on the lower side.

At the moment, the single currency euro is consolidating below hasn't moved much as the EUR/USD pair continues to trade below support come resistance level of 1.1115. Investors are still likely to trade EUR/USD with a bearish bias, but most of the price action will be determined by the German PPI m/m during the European session. Thus, we may see a further drop in the EUR/USD until 1.1060. The immediate resistance stays at 1.1115 today.

EUR/USD – Daily Technical Levels

Support Resistance

1.1118   1.1178

1.1094   1.1215

1.1034   1.1275

Pivot Point 1.1154

EUR/USD – Daily Forecast

Today, I'm sticking with the same plan to stay bearish below 1.1115 to target 1.1080 (already achieved) and 1.1060 support areas. Below this, the EUR/USD can extend bearish rally until 1.1030 today.

GBP/USD – 50 Periods EMA Underpin Sterling

It’s been another a quiet day before on the economic events front. August CBI industrial Trend Orders are expected to out of the UK this midday. With stats on the softer side, we can anticipate the Sterling to be sensitive to today’s economic events.

Whereas the British Pound will react to any chatter on Brexit which will likely overshadow today’s figures. At the time of writing, the Pound was up by 0.05% to $1.2128.

On the technical side, 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.

The Relative Strength Index (RSI) is now trading at 25, in the bearish zone, but it's not worthly to look for RSI, especially during the choppy market sessions. 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

Support Resistance

1.2096 1.2186

1.2046 1.2226

1.1956 1.2316

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.

Gold – RSI Enters Oversold Region, Can We Expect Bounce-Off?

On Monday, the yellow metal gold prices slipped more than 1% over concerns mounted that major markets could tip into recession, boosting investors’ association for risk and decreasing from bullion’s safe-haven appeal.

One of the reasons behind bearish bias in gold is the Benchmark treasury yield. Benchmark U.S. Treasury yields climbed yesterday, easing risks of a recession, following the U.S. yield curve between two- and 10-year bonds reversed for the first time since 2007 on Wednesday, flashing warning signals for the economy.

During the Asian session, the precious metal gold continues to trade is sideways, within a narrow trading range of around 1502 - 1494 over risk-on sentiments, where traders are seen to switch their investments from safe-haven assets to risky ones, as they are yielding more profits right now.

Gold's immediate support stays at 1,494 and 1,489 the violation of these levels can expose gold towards 1,470 area. On the other hand, gold is likely to face resistance around 1,508 and 1,517.

Gold – Daily Technical Levels

Support Resistance

1483.43 1539.31

1453.42 1565.18

1397.54 1621.06

Pivot Point 1509.3

Gold – Daily Forecast

I will be looking to stay bullish above 1,489 to 1,509 level. The safe-haven has faded, and most of the traders are now trading risk-on sentiment, moving funds into the global stock markets.

All the best and have a profitable day!