Daily Market Analysis from ForexMart

The British pound against the U.S. dollar has been in consolidation for the past 24 hours and it seems that the support is sufficient enough. This somehow gives a hint that the pair is ready to move up since there is a strong support in the 1.30 region. As the month end approaching, it is anticipated for the money flow to be different come to the end of the month and there will be choppiness in trades to keep the traders to be interested in the market.

The pair pushes to reach the 1.30 region and was able to sustain higher than the region majority of the day. For the first day of the week, both the volatility and liquidity was low since there is low trading activity. The pair attempted to reach the 1.3050 level for the day but was countered by strong selling that pushes it back with strong support towards the 1.30. It won’t be long when the next bullish trend happens to move towards 1.31.

Risks and uncertainties are still present in trading the pound amid the Brexit negotiation process and the market as a whole. This is why the GBP/USD pair has still not moved out of its restrictions. Although, the Bank of England supports the British currency through its statements and minutes of the meeting that increases the chances for a rate hike in the succeeding months. Yet just last week, the usual strong economic data from the U.K. has had a choppy trading mixed of good and bad results of the data. This has put pressure on the pound and had a big impact.
For today, there is no major news from the U.K. Even so, month end flows are expected to happen throughout the day that keeps the GBP/USD afloat.

Me and my colleagues will provide you daily forex analysis on this thread to help you increase your trading efficiency as well as maximizing your profit.

The British pound against the U.S. dollar moved sideways in the beginning of the Wednesday session. There is sufficient support found at the 1.30 level which pushes the trend to the upside. Later on, it is possible for the market to break the current psychological levels with the FOMC announcement to be released in the afternoon. Nevertheless, the markets were quiet as they wait for any hints from the Federal Reserve.

If traders can maintain traders more than the 1.30 level, the GBP/USD pair could move higher towards 1.3125 level and even much higher. There are still buying opportunities on the lows in the market since the British pound became cheaper.

Buying lows in the market are suggested instead of selling until a breakdown occurs below the massive support level. Unless it reaches lower than 1.2950, it is alright to sell the pair. However, if it drops even much lower, it is possible to drop even much more that would change the trend when it happens.

Buyers are more aggressive and it would not take long before they return to the market. If the trend gaps in the upper region, it will most likely reach the 1.3450 level which is possible after some time. Many major events that would come out from politicians could affect the British currency. The uptrend will presumably to continue in the long-term. Also, the pullbacks could offer opportunities in the market at a cheaper level.

The Australian dollar rallied in the beginning of Thursday session. There is sufficient resistance found at the 0.8050 level to reverse the trend and drop lower than the 0.80 level. The 0.7975 handle is being tested as the support level which was the former resistance level.

A pullback gives out a buying opportunity although this has been resistive previously. Yet, the market would not have an easy time to move higher. Although after some time, the pair would continue to move on the upper side as the U.S. dollar will proceed in a subdued manner.

As expected, the gold market will have an impact on the Australian currency.Hence, when it surges, the Aussie will follow. If it can break successfully more the 0.8065 handle, then the market will aim for 0.81 level above as the next target then eventually towards the 0.82 level.

There are opportunities in the volatility of the Australian dollar as it is a strong currency because of gold and the depreciation of the dollar for long-term. After some time, there will be more buyers for the Australian dollar and look for much higher levels.

There is a possibility for a rebound close to the 0.80 handle despite the long-term direction of the market is upward which includes the Australian dollar and not just gold. There has been a pause in the rally of the U.S. dollar that brings some noise in the market as it has been moving subtly over the long-term. There is a likelihood for buyers to return to the market.

The USD/CAD was able to obtain the highly-needed bounce on Thursday, which was previously mentioned since the week started. It is followed by the decline of the pair in the past few weeks because of the strong level in which the pair sits together with the possibility that this region is the buyer’s final stand.

As the strength of the dollar recovered, it helped the pair to soar high and affirmed lot of things in the following days. However, there is already a warning that the downward will be very intact and needed much time to return.

It is also mentioned that bears will use any bounce from the commodity-linked pair as an opportunity to sell prices highers. Any hints of recovery seen on Friday had plunged conclusively while the USDCAD appeared to be weak as usual.

The sluggish stance was triggered by the GDP figures of Canada and the United States. But the US data showed a marginally better than expected, while the Thursday’s data from the US prompted the market to have higher expectations from the gross domestic product. On one side, the Canadian GDP came in very strong and able to have another rate increase soon.

This led to a reversal of the whole trend since yesterday and the pair lies in below the 1.24 level which might become weaker.

Ultimately, there are no any major economic releases either from US or Canada. Therefore, consolidation is safely expected together with ranging of the dollar which is at disadvantage because of the developments over the White House during weekends.

Furthermore, it is predicted the USDCAD to remain in pressured area as the markets look forward to a plenty of data expected in the latter part of the week.

There is high volatility during the Tuesday session as it reached the 1.3250 level but was reversed later on. It seems that the 1.32 level is being supportive as the trend proceed moving higher.

A break lower would push the market for a support towards 1.3150 level then to 1.31 level. The British pound is going to be sensitive to a lot of noise which is anticipated as amid the negotiations from the European Union and the United Kingdom. Hence, traders should be cautious of the of any abrupt changes in this pair.

The bullishness could persist for the long term. Although, this has been quite extended in the present time. A pullback opens more opportunity to make use of the current value. The market could target for a 1.3450 level above which the peak of the consolidation for the past few months.

However, if the market successfully gaps higher than the 1.3450 level, the next retest would be at 1.35 handle. A breakout would mean large bullish tone but it will not be long before the currency starts to rally once again. There will be high volatility from the start until this period ends.

The main focus for today will be on the sterling pound as there are an expected economic releases and other data from the United Kingdom for this day. We await for the UK inflation hearings along with the rate announcement of the Bank of England to be issued. Also, BOE Governor Mark Carney will conduct his speech, therefore these events would likely cause high volatility for the GBP/USD.

The central bank of England was hawkish during their last meeting which led few markets to think that rate hike is possible sooner or later. There are three BOE members who agreed for a rate increase which triggered confidence for some markets, however, this only accounts a small portion of the market because the majority still believes that the bank will maintain its benchmark.

This is considered a logical approach regarding the continuous financial circles of Britain which could be a turmoil caused by the Brexit procedures. Moreover, a lot of things remain unclear, particularly the results of the referendum process in determining if it will a soft or hard Brexit. Due to many uncertainties, it is absurd for the BOE to make an increase and most likely, they want to see first the effect of the Brexit negotiations prior making such decisions.

The pound-dollar resume to consolidate yesterday and the range near the highs of its range are expected for this very important day. In case that the BOE decided to kept rates steady, the Cable is anticipated for further correction. The 1.3250 level serves as the ceiling at this moment.

British consumers lessened their expenditures for the third month in July, leading them into the worst decline in four years or longer. This also causes another economic impact at the beginning of the quarter.

According to a report published on Monday, IHS Markit and Visa said that the decline in spending was 0.8 percent year-on-year which appeared to be wide-ranging as the apparel, foods, household goods and transport suffered the hardest hit.

The downturn is compelled by consumers belt tightening because of the inflation rise over wage growth and shoppers’ concerns regarding the extensive outlook after the economic slowdown during the Q1 in 2017.

The negative report was issued after the Bank of England decided to lower its forecast for the economy. BOE Governor Mark Carney gave a warning about the uncertainty of Brexit that puts pressure towards businesses and households.

The consumer figures for July showed a 6 percent growth in spending on hotels, bars, and restaurants. The Markit mentioned that this may be somewhat relative to the expansion of “staycations,” as the sterling pound weakened which makes overseas holiday become more costly.

The markets may appear to be in a deep coma and traders seems to relax for awhile, however, there is something turned up that triggered their presence. The markets woke up from the slumber because of the recent data but did not cause a lot of movements. On Tuesday, the condition was different and this move built up in the past couple of days.

The recently released data is the JOLT employment figures which exceed its expectations and further boost the US dollar unexpectedly. This manages the pair to fall near 100 pips as it drops from the 1.18 level above towards the support region at 1.1720.

It was previously mentioned in the past few days that the 1.1720 support will indicate the time when it will be broken, as we expect for a deeper correction. Hence, this area was able to maintain the price but it seems to be under pressure in the near-term.

The global risk heightened due to threatening attacks by the North Korea while the United States warns the N.Korea about their possible counterattacks. With this, the gold and Japanese yen strengthened while the prices of other trading instruments were affected.

The euro-dollar pair rebounded from the 1.1720 mark to return and reach the highs at 1.1780. But this morning, the pair was seen to move in the lows due to an increase of risks worldwide.
Currently, the EURUSD experience lots of pressure due to investors and traders. The European leaders possibly felt that pinch of a stronger euro.

Ultimately, there is no major economic news from the eurozone or the US but volatility is predicted since yesterday which would likely dominate the markets this day, keeping the pair in the pressured area.

The GBP/USD hovered around the tight range of 60 pips after breaking the significant support level at 1.3030. Due to the absence of some economic and fundamental indicators, the Cable was pushed through the consolidation and ranging period.

The pound-dollar pair remains to be sluggish and attempted to break back the weak support that became the resistance. This was immediately broken by a lot of selling on Wednesday. As of this writing, it currently trades under the 1.3000 mark.

We don’t expect any economic releases from the United Kingdom within this week, as the volatility and further actions needed to complete from last week.

The Bank of England announced for some growth and British inflation fears. The UK was strained to live with uncertainties due to Brexit procedures while traders should track down upcoming UK economic statistics in order to measure how does Britain deal with the EU exit.
Due to lack of fundamental and economic drivers in the market, the GBP/USD struggled in the past couple of days and the weakness of the Cable was clearly seen by everyone.

It is projected that the weakness will continue in the near-term when the British economic data came under renewed focus.

The United Kingdom was able to manage well in terms of economic indicators, however, the statistics became choppy previously. This triggered concerns about the impact of Brexit which begins to take place.

Ultimately, the manufacturing data from the United Kingdom was released with bulls that expect for strong results in order to raise the plunging Sterling pound. In addition to it, the US PPI data will be issued and should be watched carefully to assess whether the American data will resume recovering. Moreover, expect higher volatility for the GBPUSD this day.