29 July 2019 Morning Session Analysis
Dollar gains on GDP but pressured by rate cut.
Dollar index measuring its value against a basket of six major currency pairs surged to its 2-months high on Friday after the release of upbeat US second quarter GDP data. According to US Bureau of Economic Analysis, US GDP growth was higher than expected at 2.1% as compared to forecast of 1.8%, however showing signs of contraction falling from previous 3.1%. The higher than expected data provided support for dollar as investors place their bets on a less aggressive rate cut by the Fed this week. However, some fears that the slowdown in growth during the second quarter might cause the Fed to change their monetary policy stance, signaling more than one rate cut throughout this year during its Thursday policy meeting hence limiting the gains on dollar. In other news, the safe-haven Yen was gaining against the dollar following upbeat Retail Sales data with a reading of 0.5%, exceeding economists’ forecast of 0.2%. Last Friday, Japan had also announced its Tokyo Core CPI data with a reading of 0.9% compared to its forecasted value of 0.8%, just ahead of this week Bank of Japan (BoJ) Policy Statement. With a set of bullish data supporting its economy, BoJ is widely expected to remain their low-interest rate level unchanged while investors focus on its statement to obtain further signals. As of writing, dollar index fell by 0.09% to 97.60 while pair of USD/JPY fell 0.20% to 108.43.
As for commodities, crude oil price fell 0.07% to $56.11 per barrel following diminishing tensions in the Middle East as Oman was reported to act as a mediator to resolve dispute between UK and Iran. However, oil sentiment remained mixed as recent US crude inventory data showed a major retracement while US Baker Hughes reduced its’ rig count by 3 to 776, lowering oil drilling activities. On the other hand, gold price increased by 0.37% to $1423.65 a troy ounce following a weaker dollar.
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Technical Analysis
DOLLAR_INDX, H4: Dollar index was traded lower following prior retracement from its high level. MACD which illustrate bearish bias signal with the formation of death cross suggest the dollar to extend its retracement towards the support level 97.55.
Resistance level: 98.00, 98.50
Support level: 97.55, 97.10
GBPUSD, H4: GBPUSD was traded lower while currently testing the support level 1.2375. However, MACD which illustrate diminishing bearish momentum suggest the pair to experience a technical correction in short term towards the resistance level 1.2440.
Resistance level: 1.2440, 1.2510
Support level: 1.2375, 1.2295
EURUSD, H4: EURUSD was traded higher following prior rebound from the support level 1.1120. MACD which illustrate bullish momentum signal suggest the pair to extend its rebound towards the resistance level 1.1185.
Resistance level: 1.1185, 1.1235
Support level: 1.1120, 1.1080
USDJPY, H4: USDJPY was traded lower following prior retracement from its resistance level 108.60. MACD which illustrate bearish bias signal suggest the pair to extend its retracement towards the support level 108.15.
Resistance level: 108.60, 109.05
Support level: 108.15, 107.60
AUDUSD, H4: AUDUSD was traded higher following prior rebound from the support level 0.6900. MACD which display diminishing bearish momentum suggest the pair to extend its rebound towards the resistance level 0.6930.
Resistance level: 0.6930, 0.6965
Support level: 0.6900, 0.6865
NZDUSD, H4: NZDUSD was traded lower following recent breakout below the previous support level 0.6650. However, MACD which illustrate diminishing bearish momentum suggest the pair to be traded higher as a short term technical correction towards the resistance level 0.6650.
Resistance level: 0.6650, 0.6720
Support level: 0.6600, 0.6550
USDCAD, H4: USDCAD was traded lower following prior retracement from its high level. MACD which illustrate bearish momentum signal with the formation of death cross suggest the pair to extend its retracement towards the support level 1.3145.
Resistance level: 1.3230, 1.3290
Support level: 1.3145, 1.3095
USDCHF, H4: USDCHF was traded lower following prior retracement from the resistance level 0.9935. MACD which display diminishing bullish momentum suggest the pair to extend its retracement towards the support level 0.9895.
Resistance level: 0.9935, 1.0005
Support level: 0.9895, 0.9840
CrudeOIL, H4: Crude oil price was traded flat near the support level 56.00. Due to lack of signal and direction from MACD, it is suggested to wait until further clear signal appear before entering the market.
Resistance level: 57.85, 59.25
Support level: 56.00, 54.50
GOLD_, H4: Gold price was traded higher while currently testing the resistance level 1421.40. MACD which illustrate bullish bias signal with the starting formation of golden cross suggest the commodity to extend its gains after it breaks above the resistance level.
Resistance level: 1421.40, 1437.95
Support level: 1403.15, 1386.35