US Dollar Holds Near Highs as Confidence Climbs in July

Talking Points:

  • Consumer certainty rose in Jul after a unsatisfactory dump in June
  • The consult surpassed expectations and climbed a indicate contra a prior month
  • A some-more minute demeanour during a consult outcome highlights some caveats in a certain reading

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Consumer certainty surpassed expectations in July, entrance in during 127.4, violence June’s figure of 126.4 and this month’s predict of 126.5. The dump final month was attributed to reduce income prospects. Consumer spending is a undeniably critical aspect of US mercantile activity so July’s clearly clever consult opening is a salvation to US equities that have been uneasy after a new FANG portfolio unraveling.

A some-more minute demeanour during a consult formula reveals that, nonetheless a title reading was strong, few respondents trust a economy will expansion during a faster gait relocating forward. Lynn Franco, Director of Economic Indicators during The Conference Board, pronounced “consumers comment of present-day conditions improved, suggesting that mercantile expansion is still strong. However, while expectations continue to simulate certainty in a short-term mercantile outlook, back-to-back declines advise consumers do not predict expansion accelerating.”

Consumers’ certainty about short-term mercantile opinion also waned in July. The commission of consumers that design business conditions will urge over a subsequent 6 months increasing +2.4% to 23.1% though those who design business conditions will wear also rose +1.5% to 10.8%. The some-more minute formula uncover signs that consumers trust a economy might be impending a peak, as conditions are flushed now and certainty in a long-term wanes.

While a outcome offers some passing certainty for recently uneasy US equities, it also offers discernment on a US consumer’s notice of a ongoing trade wars. Last month’s dump was a worrying pointer that trade wars had a discernible impact on mercantile opinion and a economy might start to unravel. This month’s boost shows consumers have not indispensably felt estimable impacts though see intensity for a trade wars to shackle or minister to a negligence economy in a future.

US Dollar Holds Near Highs as Confidence Climbs in July

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Although a certainty consult is an critical mercantile information piece, a fusillade of critical arriving information dominates financier focus. Tuesday saw a Japanese rate decision, Canadian GDP, and Mexican GDP. The FOMC decides seductiveness rates Wednesday and a Bank of England is due for a same Thursday. Still, US equities and a dollar basket were somewhat in a immature Tuesday morning, expected due to a few factors like a BoJ preference and Canadian GDP joined with a certainty data.

SPX 500 Price Chart: 1-minute Timeframe (July 31, 2018 Intraday) (Chart 1)

US Dollar Holds Near Highs as Confidence Climbs in July

DXY Index Price Chart: 10-minute Timeframe (July 31, 2018 Intraday) (Chart 2)

US Dollar Holds Near Highs as Confidence Climbs in July

Read more: EUR/USD Gains Weigh on DXY Index; Sideways Price Action Eyed

— Written by Peter Hanks, DailyFX Research

GBP/AUD Technical Outlook: Price Testing Major Trend Support

GBP/AUD Weekly Price Chart

GBP/AUD Weekly Price Chart

Technical Outlook: GBP/AUD has been trade within a proportions of a well-defined ascending pitchfork formation fluctuating off a 2016 low. Price is now contrast slope support (red) and a weekly tighten next this threshold would risk estimable waste for a span targeting connection support during 1.7470/90 (52-week relocating normal 38.2% retracement) and a yearly low-week tighten during 1.7344. Broader bearish cancellation stands during 1.7950– a crack above this segment would be indispensable to advise a some-more poignant low is in place.

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GBP/AUD Daily Price Chart

GBP/AUD Daily Price Chart

Notes: A closer demeanour during GBP/AUD cost movement highlights today’s exam of support during a shifting together fluctuating off a Sep lows with a 61.8% retracement of a Jun allege only reduce during 1.7617– A mangle / tighten next this threshold is indispensable to keep a evident brief disposition in play targeting a reduce together around 1.7470. Look for initial insurgency behind during a 200-day relocating normal / weekly open during 1.7717/20 corroborated by a monthly open / Apr trendline resistance during ~1.7810.

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Bottom line: GBP/AUD is contrast long-term up-trend support. Price has been coiling adult for months now and while there’s no evident play here, we’re looking for a dermatitis of a 1.7617-1.7810 for serve superintendence on a medium-term directional bias. From a trade standpoint, a near-term hazard stays for an depletion low while above 1.7617.

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Relevant GBP/AUD Economic Data Releases

GBP/AUD Economic Calendar

Economic Calendarlatest economic developments and upcoming event risk

Other Setups in Play

– Written by Michael Boutros, Currency Strategist with DailyFX

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Near-term Setups in EUR/USD and AUD/JPY

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EUR/USD 240min Price Chart

EUR/USD 240min Price Chart

Earlier this month we highlighted weekly support connection in EUR/USD with cost remaining within a proportions of a extended converging settlement after mixed unsuccessful attempts to mangle lower. The evident concentration is on a dermatitis of this converging operation and we need cost to transparent a 1.1603-1.1750 for superintendence (topside favored). From a trade standpoint, I’ll preference vanishing debility near-term while above 1.1642– Intraday trade levels sojourn unvaried from this week’s EUR/USD Technical Outlook.

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AUD/JPY 240 Price Chart

AUD/JPY 240mi Price Chart

In my prior researcher pick, we examined a reversal that was underway in AUD/JPY with a focus, “lower while next a weekly open during 83.24 with initial support objectives eyed during a connection of a 50-line / 100-day relocating normal during ~82.50 and a 61.8% retracement / Jul open during 82.00/04– demeanour for a stronger greeting there for guidance. “

A ‘strong’ greeting off a 82-handle has fueled a cost convene of some-more than 1.7% with a allege holding AUD/JPY by a 61.8% retracement during 83.12. Interim support now 82.61 with successive topside insurgency targets eyed during 83.61/70 and a 38.2% retracement during 84.25– and area of seductiveness for probable near-term depletion / brief entries. Broader bullish cancellation solid during 81.88/93.

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-Written by Michael Boutros, Currency Strategist with DailyFX

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US Dollar Price Action Setups Ahead of FOMC, NFP

The rest of this week brings a bustling economic calendar filled with high-impact events, and many vital banking pairs will be in concentration as we get pivotal rate decisions out of a Fed and Bank of England, along with a recover of Non-Farm Payrolls information on Friday morning. This comes on a heels of what’s already been a bustling week with final night’s Bank of Japan rate preference and this morning’s collection of European items, including Jul acceleration and Q2 GDP.

Talking Points:

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US Dollar Continues Knocking on Support

The bullish trend-line in a US Dollar continues to reason support, and that trend-line has now run into a Fibonacci territory that runs from 94.20-94.30. We did see some ceiling transformation this morning from a rebound off of this area, though bulls haven’t nonetheless been means to pull adult to a re-test of 94.75 or 94.90. This urges counsel as we proceed tomorrow’s FOMC rate preference and Friday’s Non-Farm Payrolls data. There’s deeper support structure in USD, privately looking during 93.71 that helped to furnish a Jul pitch low or 93.20-93.30 that helped to reason a lows in June.

US Dollar Four-Hour Price Chart: Continued Test of Key Support

us dollar 4 hour cost draft usd

Chart prepared by James Stanley

EUR/USD Deeper into a Wedge

The exquisite triangle continues to reason EUR/USD price action, and a span hasn’t nonetheless shown most for trends so distant in Q3. European data, on a other hand, continues to uncover acceleration above a ECB’s 2% target. This was partially equivalent by a slight beating in this morning’s Q2 GDP release, that came in during 2.1% contra a expectancy of 2.2%. But – a bar for a stronger Euro appears comparatively low, as a ECB formerly conspicuous that they’re formulation to keep rates during stream levels ‘at slightest by a summer of 2019.’ Will they be means to continue sitting on disastrous rates as acceleration runs higher? We saw this thesis removing labelled in for most of final year, and a intensity exists for that unfolding to uncover again in a second half of 2018.

For now – price action is displaying no such trend, so I’m not looking during directional strategies until that changes.

EUR/USD Four-Hour Price Chart: Driving Deeper into a Wedge

eurusd eur/usd 4 hour cost chart

Chart prepared by James Stanley

GBP/USD In-Focus Ahead of BoE Super Thursday

We looked into a span yesterday and a setup here is mostly a same. The down-trend in a British Pound has been sincerely conspicuous given mid-April. This is when acceleration took a downturn and, as of yet, hasn’t entirely recovered. Inflation in Mar came in during 2.5% and given then, we’ve had 3 uninterrupted months imitation during 2.4%. But – after a BoE hold off of a May rate hike, we saw 3 dissenting votes for a travel in June. Since afterwards we’ve seen flourishing probabilities for a 25 basement indicate composition during Thursday’s rate decision, and with this assembly being a ‘Super Thursday’ event, we’re also removing updated forecasts out of a bank.

This could, potentially, pierce in a insurgency exam during a forward trend-line taken from a Jun and Jul pitch highs.

GBP/USD Four-Hour Price Chart

gbp/usd gbpusd 4 hour cost chart

Chart prepared by James Stanley

USD/JPY Breaks Out After BoJ

We’ve been following a Yen around Jul as a banking started Q3 with a really manifest bearish pierce (a bullish dermatitis in USD/JPY), bringing to a forefront a probability of a delay of Yen weakness. We looked during a bullish setup there final week that didn’t fill and, again this week we highlighted a span in a FX setups of a week.

We discussed a Bank of Japan rate preference final night that appears to keep a BoJ on lane to be one of a some-more lax and pacifist Central Banks in a world. This could keep a thought of Yen debility as an appealing FX thesis as we trade deeper into a year. This was one of the Q3 themes of interest that we highlighted forward of July, and as this serve comes to fruition, this highlights captivate in setups like EUR/JPY or maybe even GBP/JPY (discussed during QA).

USD/JPY Daily Price Chart: Support Bounce After BoJ

usd/jpy usdjpy daily cost chart

Chart prepared by James Stanley

USD/CHF May Soon Bring Bearish Appeal

We had formerly looked during an descending triangle arrangement in a pair as insurgency from relation adult to 1.0055 was being joined with a bullish trend-line drawn from a Jun and Jul pitch lows. Yesterday saw that trend-line get taken out, and we’re now saying some insurgency form here. This can open a doorway to short-term bearish setups in a span for those looking to pierce aggressively. Alternatively, traders can wait for a bearish exam of .9850 before afterwards looking to place stops above lower-high insurgency around a trend-line.

USD/CHF Four-Hour Price Chart: Resistance during Prior Trend-Line Support

usd/chf usdchf 4 hour cost chart

Chart prepared by James Stanley

EUR/JPY with Bullish Potential After Today’s Breakout

We had looked during the span yesterday as we were entrance BoJ and this morning’s European data. Both array of events seemed to assistance out a topside of a pair, and with EUR/JPY now environment a uninformed weekly high, a doorway is open for a support exam during that before area of resistance. That territory runs from 130.00-130.35, and this can open a doorway for stops to go next a swing-low during 129.09.

EUR/JPY Four-Hour Price Chart: Support Potential during Prior Resistance 130.00-130.35

eurjpy eur/jpy 4 hour cost chart

Chart prepared by James Stanley

Gold Holds Support Going on Third Week

In this week’s elemental forecast, we looked during Gold prices holding a pivotal turn of support for a second week. This is entrance from a 50% pen of a 2014-2016 vital move, and notwithstanding countless tests below, sellers haven’t been means to make most belligerent over this support. This highlights a intensity for insurgency in a area that runs from around $1,235-$1,237 to demeanour for bearish delay strategies.

Gold Four-Hour Price Chart: Continued Hold of Support

gold 4 hour cost draft gld

Chart prepared by James Stanley

To review more:

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USD/JPY Rate Eyes July-High as BoJ Ramps Up Dovish Forward-Guidance

Japanese Yen Talking Points

USD/JPY appears to be on lane to exam a July-high (113.18) as a Bank of Japan (BoJ) stays in no rush to interpretation a easing-cycle, and dollar-yen might theatre a incomparable allege going into a Federal Reserve seductiveness rate preference as a sell rate breaks out a slight range.

Image of daily change for vital currencies

USD/JPY Rate Eyes July-High as BoJ Ramps Up Dovish Forward-Guidance

Image of daily change for USDJPY

Recent comments from a BoJ advise a executive bank will continue to lift out a Quantitative/Qualitative Easing (QQE) Program with Yield-Curve Control as Governor Haruhiko Kuroda Co. reduce a acceleration forecast, with USD/JPY during risk of exhibiting a some-more bullish function amid a diverging paths for financial policy.

Image of Fed Fund Futures

Even yet a Federal Open Market Committee (FOMC) is widely approaching to keep a benchmark seductiveness rate on reason in August, Chairman Jerome Powell Co. might implement a assembly to ready U.S. households and businesses for aloft borrowing-costs as ‘participants generally judged that, with a economy already really clever and acceleration approaching to run during 2 percent on a postulated basement over a middle term, it would expected be suitable to continue gradually lifting a aim operation for a sovereign supports rate to a environment that was during or rather above their estimates of a longer-run turn by 2019 or 2020.

As a result, a collection of hawkish Fed tongue might fuel a new allege in USD/JPY as a executive bank alters a forward-guidance for financial policy, though some-more of a same from Chairman Powell Co. might clap a new strength in a sell rate as curbs bets for 4 Fed rate-hikes in 2018.

Keep in mind, new cost movement encourage a some-more constructive opinion for USD/JPY as it breaks out of a slight range, though a broader opinion stays dark with churned signals as both cost and a Relative Strength Index (RSI) destroy to keep a ceiling trends from progressing this year.

USD/JPY Daily Chart

Image of USDJPY daily chart

  • There appears to be a change in USD/JPY function as a ceiling trend unravels, though new cost movement raises a risk for a run during a July-high (113.18) as it breaks out of a prior week’s range.
  • Close above a 111.10 (61.8% expansion) to 111.60 (38.2% retracement) segment brings a 112.40 (61.8% retracement) to 112.80 (38.2% expansion) area behind on a radar, with a subsequent segment of seductiveness entrance in around 113.80 (23.6% expansion) to 114.30 (23.6% retracement) on a radar, that sits only above a December-high (113.75).

For some-more in-depth analysis, check out a Q3 Forecast for a Japanese Yen

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Image of DailyFX mercantile calendar

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— Written by David Song, Currency Analyst

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Upbeat New Zealand Employment Report to Curb NZD/USD Losses

Trading a News: New Zealand Employment Change

Updates to New Zealand’s Employment news might coax a miscarry in NZD/USD as pursuit enlargement is approaching to boost 3.6% per annum in a second-quarter of 2018 contra a 3.1% enlargement during a initial three-months of a year.

Image of DailyFX mercantile calendar

Signs of a stronger labor marketplace might put vigour on a Reserve Bank of New Zealand (RBNZ)to change a forward-guidance for financial process during a subsequent assembly on Aug 8, and Governor Adrian Orr Co. might start to change their balance after this year as ‘ongoing spending and investment, by both households and government, is approaching to support growth.’

In turn, a certain growth might hint a bullish greeting in a New Zealand dollar as it encourages a RBNZ to lift a central money rate (OCR) off of a record-low, though a set of below-forecast prints might fuel a new debility in NZD/USD as it casts a enervated opinion for a economy. Sign adult and join DailyFX Currency Analyst David Song LIVE for a broader contention on stream themes and intensity trade setups!

Impact that a New Zealand Employment news has had on NZD/USD during a final release

1Q 2018New Zealand Employment Change

NZD/USD 15-Minute Chart

Image of NZDUSD 5-minute chart

New Zealand practice augmenting 3.1% per annum in a first-quarter of 2018, that compares to a 3.7% enlargement during a final three-months of 2017, while a jobless rate slight to 4.4% from 4.5% during a same duration as a Participation Rate suddenly slipped to 70.8% from a revised 70.9%. A deeper demeanour during a news showed Average Hourly Earnings augmenting 1.1% contra projections for a 0.5% print, and a churned information prints might do small to change a financial process opinion as a Reserve Bank of New Zealand (RBNZ) stays in no rush to lift a central money rate (OCR) off of a record-low.

The New Zealand dollar struggled to reason a belligerent following a muted print, with NZD/USD pulling behind from a 0.7340 segment to tighten a day during 0.7271. Learn some-more with a DailyFX Advanced Guide for Trading a News.

NZD/USD Daily Chart

Image of NZDUSD daily chart

  • A broader change in NZD/USD function appears to be underway as both cost and a Relative Strength Index (RSI) bluster a bearish formations from progressing this year, and a miscarry from a 2018-low (0.6688) might accumulate gait once a sell rate breaks out of a range-bound cost movement from progressing this month.
  • The former-support section around 0.6820 (23.6% retracement) to 0.6870 (78.6% expansion) stays on a radar, with a break/close above a settled segment lifting a risk for a pierce towards 0.6930 (23.6% expansion) to 0.6960 (38.2% retracement).
  • Need a shutting cost subsequent a 0.6710 (61.8% expansion) to 0.6720 (61.8% expansion) segment to open adult a downside targets, with a subsequent area of seductiveness entrance in around 0.6600 (23.6% retracement) to 0.6630 (78.6% expansion).

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Are we looking to urge your trade approach? Review a ‘Traits of a Successful Trader array on how to effectively use precedence along with other best practices that any merchant can follow.

— Written by David Song, Currency Analyst

Follow me on Twitter during @DavidJSong.