The financial markets experienced a lack of trend during the Asian and European session as big traders seem to stay out of the market after pricing in the ECB deposit rate cut. We may see a jump in trading volume during the U.S session open trading as traders will be active to take benefit of U.S. retail sales figures.
U.S. Retail Sales - 12:30 GMT
Today, one of the significant economic events which have the potential to shake the market is the U.S. retail sales. The purchaser has been on a turn in July, with headline sales surging by 0.7% and core retail sales soaring by 1%.
On the other hand, the consumer confidence figures for August have been mixed, which indicates the weaker trade volume for the month of August. The dollar may have a significant impact on these economic releases today.
In this update, we are going to see trade setups in the EUR/USD, GBP/USD, and Gold.
EUR/USD - Buy the Rumors, Sell the Fact
A day before, the euro marked a day-low of $1.0927 before bouncing back to close at 1.1056, up 0.4%. The European Central Bank lowered its deposit facility rate to -0.50% from -0.40% as expected and announced the restart of bond purchases at a monthly pace of 20 billion euros from November 1. However, media reported that chiefs of central banks of German, French, and the Netherlands opposed an immediate resumption of quantitative easing.
At the moment, the EUR/USD is trading bullish at 1.1100 level as investors are buying the Euro over sentiment analysis. The dovish policy from ECB, deposit rate cut, and reinstating the quantitate easing didn't come as a surprise. Investors already took sell positions on this news even before the4se got released yesterday, which is why we saw selling bias in the EUR/USD pair. Yesterday, on the release of ECB dovish policy, investors started doing profit takings, buy getting rid of their short positions and entering in the long positions.
EUR/USD - Daily Technical Analysis
The Fiber has violated the triple top resistance area of around 1.1065, which was extending a substantial resistance to EUR/USD. The direct currency pair has the potential to go after 1.1150 during the U.S session as both of the leading indicators RSI and MACD are staying in the bullish zone. The 1.1075 level is now likely to work as a support.
EUR/USD - Technical Levels
Pivot Point 1.1098
EUR/USD - Daily Trade Sentiment
The EUR/USD can stay bullish above 1.1085 to target 1.1150 as an initial target. On the lower side, bears can take control below 1.1065 area. Let's wait for U.S. retail sales to determine further trends in the market.
GBP/USD - Sterling's Bullish Run Begins
Following a consolidation phase for almost a week, the GBP/USD surged during the early European session. The Sterling rose against its primary equivalents in early trading on Friday as traders proceed to comprehend the probabilities of a no-deal Brexit declining.
A weaker dollar further boosted GBP/USD as the greenback shifted on Thursday on the back of less dovish than expected ECB monetary policy.
Yesterday's European Central Bank conference triggered a subtle effect in the markets. The greenback initially soared towards yearly highs, as the European central bank delivered an effective stimulus plan, but abruptly turned gains.
GBP/USD - Daily Technical Analysis
The bullish bias in Cable dominates the market and leads the GBP/USD prices at 1.2450. On the 4 hours timeframe, the GBP/USD was facing substantial resistance at the double top pattern of 1.2375 area which has also been breached and now it's likely to work as a support level today.
The bullish engulfing candle on the 4-hour charts is saying a lot about the bullish trend of the cable. Today, the GBP/USD bullish trend may lead its exchange rate towards .2525 area.
Leading indicators such as a MACD and RSI are holding in the bullish zone, suggesting bullish trade opportunities in the Cable.
GBP/USD - Technical Levels
Pivot Point 1.2201
GBP/USD - Daily Trade Sentiment
Just like the EUR/USD, we may see a bullish trend continuation in the GBP/USD. The pair is expected to trade bullish above 1.2400 until 1.2525 area. While support continues to hold around 1.2375.
Gold - XAU/USD - Range bound Gold Going Nowhere.
During the European session, the precious metal gold's prices traded range-bound as monetary easing changes by big central banks maintained demand while trade discussion confidence lifted other assets, bending the gold's market.
The ECB rate decision and dovish stance have triggered the sentiments that the U.S. Central Bank Federal Reserve may also be forced to keep the interest rates lower. Consequently, we saw a bullish move in gold and the dovish policy sentiment is still underpinning the demand for gold today.
Gold (XAU/USD) - Daily Technical Analysis
On the technical's side, gold is trading slightly bullish after crossing over the psychological trading level of $1,500. The histograms of MACD are consistently staying in the bullish zone, supporting the bullish sentiment amount traders.
Well looking at the support and resistance, the safe-haven gold may find immediate support at $1,500 and $1,484 area. Whereas, the resistance is likely to stay at $1,511 and $1,522 regions.
XAU/USD - Daily Technical Levels
Pivot Point 1504.09
XAU/USD -Daily Trade Sentiment
Let's stay bullish above $1,500 trading zone in order to target $1,509 area. Selling can be seen below $1,500 with a target of 1$484 today.
Risk Warning: CFD and Spot Forex trading both come with a high degree of risk. You must be prepared to sustain a total loss of any funds deposited with us, as well as any additional losses, charges, or other costs we incur in recovering any payment from you. Given the possibility of losing more than your entire investment, speculation in certain investments should only be conducted with risk capital funds that if lost will not significantly affect your personal or institution’s financial well-being. Before deciding to trade the products offered by us, you should carefully consider your objectives, financial situation, needs and level of experience. You should also be aware of all the risks associated with trading on margin.