25 July 2019 Afternoon Session Analysis
Market brace for dovish ECB policy statement.
The euro plunged against the dollar and sterling after the release of a set of disappointing data from the Eurozone. Ahead of ECB monetary policy statement, Manufacturing PMI from both Germany and France slumped to 43.1 and 50.0, missing their forecasted value of 45.1 and 51.6 respectively. Previously, the eurozone was continuously pressured by a slowdown in their economic growth as shown in their economic data. Besides that, recent inflationary level was straying away from ECB’s forecast and global trade tensions and economy slowdown further pressured the euro, heightening investors’ expectation that the ECB will further loosen their monetary policy to support the downfall. Although ECB is expected to keep interest rate unchanged during their meeting today, however they also mentioned that they will either cut their cash rates to a negative level or might resume their Quantitative Easing program in the future which caused investors to largely sell the currency ahead of today’s statement. Elsewhere, North Korea fired two projectiles suspected as missiles towards the East Sea earlier this morning, most probably due to heightened uncertainty regarding nuclear negotiations between US and North Korea. Tensions between the two countries remains since US President Donald Trump walked out of the negotiations at Vietnam summit last February and also the violation of US commitment to drop joint military exercises with South Korea. The launching of missiles is believed to be a threat from North Korea showing that they are not afraid of the US, heightening geopolitical tensions while causing investors to seek shelter in safe-haven Yen. As of writing, pair of EUR/USD and USD/JPY both inched lower by 0.04% to 1.1133 and 0.02% to 108.15 respectively.
On the other hand, crude oil price further its rebound by 0.25% to $56.02 per barrel after recorded large losses despite a major fall in US crude inventories. Oil sentiment remains mixed amid tensions in the Middle East which are affecting global supply in the market while fear of global economy slowdown in the long run are affecting global demands. Oil traders are now waiting on possible developments in the Middle East to obtain clearer signals for oil’s movement. Likewise, gold price was falling by 0.25% to $1421.75 a troy ounce amid stronger dollar.
Today’s Holiday Market Close
Time Market Event
N/A
Today’s Highlight Events
Time Market Event
19:45 EUR ECB Monetary Policy Statement
20:30 EUR ECB Press Conference
Today’s Highlight Economic Data
| Time | Nation & Data | Previous | Forecast | Actual |
| 16:00 | EUR – German Ifo Business Climate Index (Jul) | 97.4 | 97.1 | – |
| 19:45 | EUR – ECB Interest Rate Decision (Jul) | 0.00% | 0.00% | – |
| 20:30 | USD – Core Durable Goods Orders (MoM) (Jun) | 0.4% | 0.2% | – |
| 20:30 | USD – Initial Jobless Claims | 216K | 220K | – |
Technical Analysis
DOLLAR_INDX, H4: Dollar index was traded higher following prior breakout above previous resistance level 97.00. However, MACD which illustrate diminishing bullish momentum suggest index to undergo short-term technical correction and retrace towards the support level 97.10.
Resistance level: 97.55, 98.00
Support level: 97.10, 96.70
GBPUSD, H4: GBPUSD was traded lower following prior retracement from the resistance level 1.2510. MACD which illustrate diminishing bullish momentum suggest the pair to extend its retracement towards the support level 1.2440.
Resistance level: 1.2510, 1.2595
Support level: 1.2440, 1.2375
EURUSD, H4: EURUSD was traded lower while currently testing near the support level 1.1125. However, MACD which illustrate diminishing bearish momentum suggest the pair to undergo short-term technical correction and rebound towards the resistance level 1.1185.
Resistance level: 1.1185, 1.1235
Support level: 1.1125, 1.1080
USDJPY, H4: USDJPY was traded lower while currently testing the support level 108.15. MACD which illustrate bearish bias signal suggest the pair to extend its losses after it breaks below the support level.
Resistance level: 108.60, 109.05
Support level: 108.15, 107.60
AUDUSD, H4: AUDUSD was traded lower while currently testing near the support level 0.6965. However, MACD which display diminishing bearish momentum suggest the pair to undergo a short term technical correction towards the resistance level 0.7000.
Resistance level: 0.7000, 0.7035
Support level: 0.6965, 0.6930
NZDUSD, H4: NZDUSD was traded lower following prior retracement from the resistance level 0.6720. MACD which illustrate bearish momentum suggest the pair to extend its losses towards the support level 0.6650.
Resistance level: 0.6720, 0.6770
Support level: 0.6650, 0.6600
USDCAD, H4: USDCAD was traded lower following prior retracement from the resistance level 1.3145. MACD which display starting bearish momentum with the formation of death cross suggest the pair to extend its retracement towards the support level 1.3095.
Resistance level: 1.3145, 1.3230
Support level: 1.3095, 1.3020
USDCHF, H4: USDCHF was traded lower while currently testing near the support level 0.9840. MACD which illustrate bearish bias signal with the starting formation of death cross suggest the pair to extend its losses after it breaks below the support level.
Resistance level: 0.9890, 0.9935
Support level: 0.9840, 0.9800
CrudeOIL, H4: Crude oil price was traded lower while currently testing the support level 56.00. MACD which illustrate bearish bias signal with the starting formation of death cross suggest the commodity to extend its losses after it breaks below the support level.
Resistance level: 57.85, 59.25
Support level: 56.00, 54.50
GOLD_, H4: Gold price was traded flat near the support level 1421.40. Due to lack of momentum and direction from MACD, it is suggested to wait until further clear signal appear before entering the market.
Resistance level: 1437.95, 1457.10
Support level: 1421.40, 1403.15