Spreads
Spreads
Spreads
Spreads
Spreads
EURUSD
The EUR/USD pair advanced on Monday, regaining upside momentum and touched a daily high above near 1.027 level after the release of dismal US ISM Manufacturing PMI data. The pair is now trading at 1.0268, posting a 0.41% gain daily. EUR/USD stays in the positive territory amid a weaker US dollar across the board, as the risk-on market sentiment exerted bearish pressure on the greenback and helped the EUR/USD pair to find demand. The US ISM Manufacturing PMI declines to 52.8 in July, which was the lowest reading since June 2020 and showed slowing signs in business activity. For the Euro, investors continued to fuel their speculations of an impending recession in the Eurozone amid the downbeat German Retail Sales data, which plunged the most since 1994 and dropped 8.8% YoY in June.
For the technical aspect, the RSI indicator is 61 figures as of writing, suggesting that the upside is more favoured as the RSI stays above the mid-line. As for the Bollinger Bands, the price preserved its bullish momentum and continued to climb toward the upper band, therefore the upside traction should persist. In conclusion, we think the market will be slightly bullish as the pair tests the 1.0264 resistance line. A sustained strength above that resistance might open the road for additional gains.
Resistance: 1.0264, 1.0438, 1.0484
Support: 1.0177, 1.0153, 1.0111
The GBP/USD pair surged on Monday, jumping back above the 1.220 mark and kept refreshing its daily high during the US trading session amid renewed weakness in the US dollar. At the time of writing, the cable stays in positive territory with a 0.88% gain for the day. Investors continued to scale back their expectations for more aggressive rate hikes by the Federal Reserve amid the fear of recession, which acted as a headwind for the safe-haven greenback. Markets are now pricing in a 30% probability of a 75 bps Fed rate hike in September. For the British pound, despite the data from the UK showing that the S&P Global Manufacturing PMI fell to 52.1 in July, the cable remained underpinned by the rising bets for a 50 bps rate hike by the Bank of England.
For the technical aspect, the RSI indicator is 70 figures as of writing, suggesting that the pair is facing heavy upside pressure as the pair stays in the overbought zone. For the Bollinger Bands, the price moves out of the upper bands so a strong trend continuation can be expected. In conclusion, we think the market will be slightly bearish as long as the 1.2284 resistance line holds. The pair might witness some short-term technical corrections before climbing higher amid the overbought condition.
Resistance: 1.2284, 1.2317, 1.2381
Support: 1.2218, 1.2200, 1.2115
Despite the diminishing odds for more aggressive Fed rate hikes continuing to weigh on the US dollar, the pair USD/CAD gained positive traction and rebounded from seven-week lows toward 1.2835 during the US session. USD/CAD is trading at 1.2846 at the time of writing, rising 0.23% daily. Last week, the Fed hinted that it could slow the pace of the rate hike campaign at some point, which continued to undermine the safe-haven greenback. On top of that, the retreating crude oil prices have acted as a headwind for the commodity-linked loonie and pushed USD/CAD higher as WTI slides towards the $96 per barrel area. Oil prices remained under pressure amid a cautious mood ahead of this week’s OPEC meeting.
For the technical aspect, the RSI indicator is 50 figures as of writing, suggesting that there is no obvious direction for the pair now. For the Bollinger Bands, the price regained some bullish strength and crossed above the moving average, therefore the upside traction should persist. In conclusion, we think the market will be slightly bullish as the pair is heading to test the 1.2841 resistance. A break above that resistance could open the road for additional gains.
Resistance: 1.2841, 1.2891, 1.2944
Support: 1.2785, 1.2698