Forex Trading News
The USD and stocks are given a strong lift after Trump-Xi meeting in Japan delivered what the markets expected. For now, the greenback is trading as the strongest ones while traders are revisiting the chance of Fed cut in July. CAD is steadily firm, partly helped by rally resumption in oil price, as WTI breaches 60 handle. Swiss France and Yen are broadly pressured but Euro and AUD are not far behind.
US job numbers, PMI figures from the UK, eurozone, China and the US, and an OPEC meeting are key events this week, with much of the tone for the first half of the week determined by the outcome of the G20 meeting over the weekend. US markets are closed on Thursday for Independence Day, with trading likely to be quiet around this key holiday period.
Our Favourite assets we are watching this week:
#EUR JPY – Strongly Bullish on 4hr, Daily and Weekly charts
EUR/JPY edged higher today but the overall outlook is unchanged. Price actions from 120.78 are seen as a consolidation pattern. The further rise cannot be ruled out. But upside should be limited by 123.73 resistance to bring larger fall resumption. On the downside, below 121.65 minor support will turn bias to the downside for 120.78 low. Decisive break there will resume the decline from 127.50 and target 118.62 low next.
#CAD/JPY – Strongly Bullish on Daily to Monthly charts
CAD/JPY is trading higher and closed above 55- day EMA for the second consecutive day. It hits 5 -week high after the release of Canadian GDP data. Canadian Apr GDP came at 0.3% compared to forecast of 0.2% and y/y reading came at 1.5% vs 1.6% expected. The strong oil price due to the escalation of tension between the US and Iran is supporting the pair. It hits an intraday high of 82.43 and is currently trading around 82.33.
Trade War Impact in July 2019
This weekend’s trade truce between the US and China delivered a nice start to the trading week for equities all around the globe. All the major indexes are higher on the reset of trade talks between the world’s two largest economies.
President Trump softened his tone on supplying Chinese tech giant Huawei and signalled he will not raise tariffs, while China will buy more US farm goods. The concessions from both sides are hardly anything for both sides to brag about, this meeting basically just brings us back to where we were in talks in late April.
While no set timeline has been suggested by both sides, financial markets are appearing to be optimistic we could see something by Autumn. The political motivation from both sides to reach final trade deal is growing, Trump with his 2020 election and China with the 70th anniversary of the founding of the People’s Republic of China, which falls on October 1.
Oil & OPEC’s Impact for July 2019
Crude prices opened the weak gap higher as the G20 side-line meetings delivered two positive outcomes: the world’s largest two economies resume trade talks and Russian President Putin gave the Saudis the green light to approve cuts by six to nine months.
Today, the JMMC meeting saw the committee fall in line with what President Putin and Saudi Crown Prince Mohammed Bin Salman agreed upon over the weekend. The big surprise from the JMMC meeting was that Iran backed down from their stance of requiring the input of anti-sanctions language in its communique. Going into the meeting the base case was for the production cuts to be extended until year end. The potential of having them last until the first quarter of 2020 is helping oil stay near its sessions high.
Gold’s Impact for July 2019
Gold plummeted below the $1,400 an ounce level after the latest chapter in the US-China trade war saw a reset in trade talks. The yellow metal’s selloff was the worst in a year, but we should see global growth concerns and fresh stimulus bets from the largest central banks see buyers jump back in. A finalized trade deal is still far away and we could see talks collapse again in a couple of months.
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