Daily Market Analysis from Investizo.com

General analysis AUDUSD for 27.07.2022

Current dynamics

AUD/USD drops to 0.69450 ahead of major macroeconomic news on the pair

The pair AUD/USD, traditionally sensitive to the appetite for risk and dependent on it in direct relation, since the beginning of the trading week is in a downtrend, as a whole market is in an anxious condition, expecting the probable occurrence of economic recession. These concerns are dictated not only by steadily rising inflation and a consistent increase in the key rate of the U.S. Federal Reserve, but also negative forecasts about the prospects for economic growth in the whole world, including the Peoples Republic of China, heavily affected by prolonged restrictions caused by the epidemic situation around the pandemic of Covid-19. Another round of geopolitical tension in the world also affects the reduction of appetite for risk: the USA confronts China about its claims in the Taiwan issue, relations between Russia and European countries are complicated due to the news about a possible further reduction of gas supplies to the West. 

Negative statistics were released in the USA, showing a consecutive three-month decline in consumer confidence (95.7 vs. previous 98.4), new home sales in June (0.59 million vs. previous 0.64 million).

In Australia, experts predict the worst performance since 1990, probably in annual terms, it will reach 6.2%, which will inevitably provoke an increase in interest rates of the Reserve Bank of Australia.  The main reasons for such a surge in inflation in Australia is the energy and agricultural crisis, the global rise in prices for energy and food products.

The meeting of the Reserve Bank of Australia will be held on August 2, the main agenda is expected to raise the main interest rate to 1.35%. Experts believe that the most probable decision is to increase the rate by 50 basis points, at the same time the ceiling of its growth at the moment is forecasted at 3.35%, as the situation does not look inclined to stabilization and the cycle of tightening of the monetary policy, probably, will not end soon. The nearest step in the pairs development is for the U.S. Federal Reserve meeting, which is scheduled for July 27. Analysts expect the key rate to be raised by 75 basis points at once this time.

Support and resistance levels

Alligator is sleeping: the moving averages are twisted, the instrument is flat. The nearest fractal below the alligators teeth (red line) is at 0.69340. Awesome Oscillator (AO) and Accelerator Oscillator (AC) are in the gray area, showing a divergence, which is not a reliable signal to open a position.

✔️ Support levels: 0.69340, 0.69040, 0.68720.
✔️ Resistance levels: 0.70510, 0.70150, 0.69760.

Trading scenarios

✔️ Short positions should be opened at the 0.96800 with a target of 0.69040 and a stop loss at 0.69550. Implementation period: 1-2 days.
✔️ Long positions can be opened above the level of 0.69760 with a target of 0.70150 and a stop-loss at the level of 0.69550. Implementation period: 1-2 days.






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Analytical department investizo.com


Disclaimer:*This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument.

General analysis USDJPY for 16.08.2022

Current DynamicsJapan's economy grew 0.5% in real terms from April to June. Consumption in Japan, which accounts for more than half of the country's GDP, grew on 1.1%, exports increased on 0.9% and imports increased on 0.7%. Builder confidence in the U.S. housing market fell harder than expected in August to its lowest level since the COVID-19 pandemic. Citizens of border areas in California started regularly traveling to Mexico for shopping products.GDP in Japan rose for the third quarter in a row. According to data released Aug. 15 by the country's Cabinet, Japan's economy grew 0.5% in real terms from April to June. Personal consumption, on which more than half of GDP accounts, increased on 1.1%.More people started going to restaurants and traveling after covid restrictions were removed in Japan. Capital spending increased on 1.4%. It is worth noting that in the previous quarter the same figure showed a decline from 0.3%.At the same time public investment in Japan also increased on 0.9% in real terms. In the previous quarter there was a decrease by 3.2%. Exports increased on 0.9%, and imports - on 0.7%.Even though Japan's economy grew at an annualized rate of 2.2%, which is worse than economists' expectations for 2.7%, Minister Daishiro Yamagiwa, who is in charge of economic recovery, said that Japan's economy is gradually recovering.Meanwhile in the U.S., builder confidence in the housing market fell in August to its lowest level since the COVID-19 pandemic. High inflation and rising borrowing costs have affected the downturn. The Wells Fargo index of the National Association of Home Builders (NAHB) in the United States, which measures the dynamics of the single-family housing market, fell for the eighth straight month and dropped to 49, which is the worst reading for the housing market since the financial crisis of 2008.Along with that, residents of California's border areas have started regularly traveling to Mexico for shopping products. For example, gasoline in Mexico for $1.24 cheaper than in California; milk is twice cheaper. Sellers and supermarkets in Tijuana are seeing a 20-30% increase of U.S. shoppers.Against the backdrop of declining GDP in the U.S. for the second quarter in a row, Japan's economy looks much better off. Low key interest rates and growing imports exports indicate the economy is recovering even though energy resources are expensive.

The USD/JPY tested the 38.2 Fibonacci level, but failed to consolidate near it and went back to the 50.0 Fibonacci level. Trend is descending. The RSI oscillator is in the lower half near 50.

Support and resistance levels

✔️ Support levels: 135.57, 134.43, 133.72, 133.15
✔️ Resistance levels: 132.57, 131.86, 130.70

Trading scenarios

✔️ Short positions can be opened below the level of 132.57 with a target of 131.86 and a stop loss of 133.72 : Implementation period: 1-3 days
✔️ Long positions can be opened above the level of 133.72 with a target of 134.43 and a stop loss of 133.15 : Implementation period: 1-3 days

More analytics on our website


Analytical department investizo.com


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument.

Fundamental analysis of EUR/USD

EUR/USD started the week with a decline to $1.09750 amid disappointing German retail sales data and mixed Eurozone economic data.

In terms of Eurozone data, Monday saw the release of July's harmonized consumer price index, which rose 5.5% year-on-year, as well as a flash GDP figure of 0.3% QoQ and 0.6% YoY. Despite a 1.6% y/y increase in German retail sales in June, the monthly figure fell to -0.8%. The ECB, raising interest rates, added 25 basis points to 4.25%, suggesting a pause in interest rate hikes in September as signs of weakening inflation and recession fears emerge. The media's interpretation of today's PMI, especially its sub-components - prices, employment and new orders - could affect market sentiment.



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Fundamental analysis of EUR/USD

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Fundamental analysis of GBP/USD

The GBP/USD pair is trading around 1.26900, recovering from a one and a half month low as traders await the release of important economic data from the UK and the US. This small rally comes despite a cautious atmosphere in global markets and uncertainty surrounding major risk events.



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