22 July 2019 Afternoon Session Analysis
Dollar held gains amid Middle East tensions.
Index dollar held its recent gains against its basket of six major currency pairs as increasing U.S Gulf tensions have helped bolster the greenback. Despite increasing confirmation on rate cut, dollar still remains buoyed by heightening Middle East tensions that caused investors to put their bid on the greenback. Tension in the oil trade’s most important waterway, Strait of Hormuz have escalated where Iranian military seized an oil tanker and defying a British warship have caused investors to putting more bets on the safe-haven dollar and kept the volatile dollar remain on where it left. Besides that, the greenback received further positivity on New York President John Williams where his recent remarks provide further clarification and “not about potential policy actions”. His comments eased market expectation for 50 basis point interest rate cut in the near-term. Dollar index rose 0.05% to 96.80 as of writing. On the other hand, EUR/USD edge lower by 0.05% to 1.1217 at the time of writing as investors also brace for rate cut from ECB. According to recent report, the chance of rate cut from European Central Bank are increased where markets are now pricing in a 60% chance of a 10 basis point cut this week compared to a 40% chance earlier during this week’s session. At the same time, weak German PPI also putting further pressure on the Euro where the data came in weaker as -0.4% against market expectation of -0.1% , the worst slump in inflation since December 2018.
In the commodities market, crude oil price skyrocketed 0.59% to $56.07 per barrel as of writing following ongoing tension in the Middle East. Iran’s Revolutionary Guards said they had captured a British-flagged oil tanker in the Gulf after Britain seized an Iranian vessel earlier this month, ratcheting up tensions along a vital international oil shipping route. The increasing tension could jeopardize the commodity supply, therefore boosted the price higher. Next, gold price rebound 0.17% to $1427.96 from its recent dip amid a strong dollar despite rate cut.
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Technical Analysis
DOLLAR_INDX, H4: Dollar index was traded higher following prior rebound from the support level 96.35. MACD which illustrate bullish momentum with the formation of golden cross suggest dollar to extend its gains towards the resistance level 97.00.
Resistance level: 97.00, 97.60
Support level: 96.35, 95.50
GBPUSD, H4: GBPUSD was traded lower while currently testing near the support level 1.2490. MACD which illustrate diminishing bullish momentum suggest the pair to extend its losses after successfully breaking below the support level 1.2490.
Resistance level: 1.2555, 1.2610
Support level: 1.2490, 1.2425
EURUSD, H4: EURUSD was traded lower prior breakout below previous support level at 1.1245. MACD which illustrate bearish bias signal suggest the pair to extend its losses towards the support level 1.1185.
Resistance level: 1.1245, 1.1285
Support level: 1.1185, 1.1120
USDJPY, H4: USDJPY was traded higher while currently testing near the 60-MA line (red). MACD which illustrate bullish momentum and the formation of golden cross suggest the pair to extend its gains after successfully closing above its 60-MA line.
Resistance level: 108.20, 108.70
Support level: 107.60, 107.25
AUDUSD, H4: AUDUSD was traded lower while currently testing the support level 0.7040. MACD which display bearish bias signal and the formation of death cross suggest the pair to extend its losses after successfully breaking below the support level.
Resistance level: 0.7090, 0.7135
Support level: 0.7040, 0.7000
NZDUSD, Daily: NZDUSD was traded higher while currently testing the resistance level 0.6770. MACD which illustrate bullish momentum suggest the pair to extend its gains after successfully closing above the resistance level.
Resistance level: 0.6770, 0.6825
Support level: 0.6720, 0.6675
USDCAD, H1: USDCAD was traded higher following prior rebound from the support level 1.3050. Due to lack of signal and momentum from the MACD, a breakout above the resistance level 1.3090 or below the support level 1.3050 is required to obtain further confirmation before entering the market.
Resistance level: 1.3090, 1.3110
Support level: 1.3050, 1.3015
USDCHF, H4: USDCHF was traded higher while currently testing the 20-MA line (green). MACD which display bullish bias signal with the starting formation of golden cross suggest the pair to extend its gains after successfully closing above the 20-MA line.
Resistance level: 0.9860, 0.9905
Support level: 0.9805, 0.9750
CrudeOIL, H4: Crude oil price was traded higher while currently testing the resistance level 56.30. MACD which illustrate bullish momentum suggest the commodity to extend its gains after successfully breaking above the resistance level.
Resistance level: 56.30, 57.95
Support level: 54.60, 52.65
GOLD_, H4: Gold price was traded higher following prior rebound from the support level 1421.40. MACD which illustrate diminishing bearish momentum suggest the commodity to extend its rebound towards the resistance level 1435.90.
Resistance level: 1435.90, 1453.75
Support level: 1421.40, 1405.00