Weekly Trading Forecasts: EURUSD Top Fundamental Candidate on Fed Speculation, ECB Decision Approaches

US Dollar May Gain if IMF Report, US GDP Data Fuels Haven Demand

The US Dollar may find itself propelled higher if the IMF’s updated assessment of the world economy and an underwhelming US GDP data report stoke demand for liquidity.

Australian Dollar Gains Should Hold As Markets Still Think Fed Will Cut

The Australian Dollar has shared fully in the broad US Dollar weakness seen as markets become more certain that US rates are going lower.

Gold Price Weekly Forecast: Fed Drives Next Leg Higher

The price of gold made a fresh six-year high Thursday, fueled by dovish Fed commentary. This stimulus comes on the back of recent, heavy, central bank buying of the precious metal alongside large gold ETF inflows.

DAX & FTSE MIB Fundamental Forecast: Eyes on ECB Rate Decision

DAX focus centered around ECB rate decision and heavyweight earnings, while Italian political risks weigh on the FTSE MIB.

Currencies Performance Price Chart

Weekly Technical Forecast: Dow Eases Back from Record, Dollar Struggles to Light Fuse, Gold Holds Its Break

Gold Price Technical Forecast: Trading Bias to Remain Higher

Gold pushed higher last week, keeping the trading bias pointed higher; may be some stop-and-go behavior but longs should have a favorable tailwind.

Dow Jones, Nasdaq 100, DAX 30, FTSE 100 Technical Forecast

With US stocks teetering around all-time highs, volatility derived from earnings season could see the major markets fluctuate between key areas. Here are the levels to watch.

Dollar Outlook: USD 2018 Uptrend In Focus on Aussie as Yen Gains?

The Dollar uptrend from 2018 still holds, near-term price action could be overshadowed by medium-term bullish signals. As USD/JPY eyes support, AUD/USD may reverse on resistance.

Euro Price Chart: EUR/USD Holding Multi-year Trend Support

Euro has been testing multi-year slope support since April and leaves bears vulnerable while above 1.1186. Here are the levels that matter on the EUR/USD weekly chart.

Crude Oil Prices Get Hit to Key Support – More Room to Fall?

Oil bears got back into the driver’s seat this week after supply disruptions from Tropical Storm Barry turned out to be less-than-feared. Can bears continue to drive?

Australian Dollar: Is This a True Bullish Reversal?

AUDUSD triggered one of the most recognizable reversal patterns in the technical scales this past week: an inverse head-and-shoulders pattern. But is this a spark that can truly catch fire in otherwise difficult markets?

Currencies Performance Chart

Australian Dollar Gains Should Hold As Markets Still Think Fed Will Cut

AUDUSD Price Chart

Fundamental Australian Dollar Forecast: Bullish

  • The prognosis of lower US rates continues to support the Greenback
  • The Aussie has props of its own, not least in ongoing labor market strength
  • It’s hard to see a near-term AUDUSD reversal, unless US data make rate cuts less likely

Find out what retail foreign exchange traders make of the Australian Dollar’s prospects right now, in real time, at the DailyFX Sentiment Page

The Australian Dollar gained on its US big brother last week, a process largely but by no means solely driven by broad weakness in the latter.

The prime mover, obviously, is the expectation that the Federal Reserve will shortly begin to cut interest rates once again, whether or not it opts to do so at its next scheduled monetary policy conclave on July 31.

The Aussie does have some domestic support however.

Australia’s Jobs Miracle Endures

Labor market data released on July 18 showed an underwhelming headline net increase of just 500 jobs for June. However, there was a lot more cheer in the detail which showed an encouraging surge in full-time work as well as a steady participation rate. Investors know that the Reserve Bank of Australia places special emphasis on these numbers when it meets to set rates. The latest figures show that Australia’s enviable record of strong job creation endures.

Moreover there is a suspicion that, after back to back monthly rate cuts in June and July, the RBA has done all it intends to do on that front. Unless there is absolutely no sign that inflation is picking up, further cuts may be unlikely given the astonishing indebtedness of Australian consumers, understandable though it is after years of record-low borrowing costs.

The coming week is likely to see continued emphasis on the ‘USD’ side of the AUDUSD pair, with Fed commentary at its usual premium. Domestically markets will get a look at July’s timely Purchasing Managers Indexes for Australia.

Two RBA Leaders Due to Speak

There’s also a speech from RBA Governor Philip Lowe due, on Thursday. Assistant Governor Christopher Kent will speak on Tuesday.

It’s possible that either or both of them will have something to say about the Australian Dollar’s recent bounce from its 2019 lows. A resurgent currency won’t be much help when it comes to juicing inflation, as it will keep the price of imports down.

However, given that the underlying source of this bounce has been broad US Dollar weakness, they seem unlikely to fight it too hard. The RBA is notably pragmatic about such things.

On balance then, the Aussie looks likely to continue to gain, unless the US data round puts near-term rate cuts there in doubt. It’s a bullish call this week.

AUDUSD

Australian Dollar Resources for Traders

Whether you’re new to trading or an old hand DailyFX has plenty of resources to help you. There’s our trading sentiment indicator which shows you live how IG clients are positioned right now. We also hold educational and analytical webinars and offer trading guides, with one specifically aimed at those new to foreign exchange markets. There’s also a Bitcoin guide. Be sure to make the most of them all. They were written by our seasoned trading experts and they’re all free.

— Written by David Cottle, DailyFX Research

Follow David on Twitter@DavidCottleFX or use the Comments section below to get in touch!

Gold Price Technical Forecast: Trading Bias to Remain Higher

Gold Price Technical Outlook:

  • Gold continues to look strong after multi-year wedge-break
  • Longs remain the focus as long as price action continues to act well

Check out the DailyFX Trading Guides page for intermediate-term forecasts, educational content aimed all experience levels, and more.

Gold continues to look strong after multi-year wedge-break

Setting the stage for a rally last month was a massive breakout from a multi-year wedge, which put shorts on hold and longs into the spotlight. Last week, we saw a small shot higher out of a short-term bullish consolidation/wedge formation, furthering along the short-term upward trading bias.

As we head into a new week, watch for gold to hold the rally from the second half of last week and stay above 1420. Price could sink a little lower than that to the developing trend-line from May, but it will be more ideal if the top of the recent consolidation pattern is held without too much of a breach.

A firm decline back inside the recent wedge will need to be only brief or else further weakness, perhaps back to the breakout levels in the 1375/60, will become a significant risk. In the event of a hold above prior resistance turned support, the ride higher might not be a smooth one but should give ‘would-be’ buyers tradeable dips and consolidations to work with.

The next area of minor resistance clocks in around a 2013 level at 1488, while the next major zone of resistance doesn’t arrive until the underside of the 2011/13 topping process, around 1520/60. Looking out longer-term, the projected target based on the multi-year wedge is closer to 1700.

Check out the IG Client Sentiment page to find out how changes in positioning in major markets could signal the next price move.

Gold Weekly Chart (Long-term wedge-break positions for higher prices)

Gold

Gold Daily Chart (stop-and-go may be the path)

Gold

Helpful Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

—Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at@PaulRobinsonFX

USD/CAD Price Chart Outlook: Grind Lower Tests Key Support

SPOT USDCAD COULD CLIMB IF TECHNICAL SUPPORT HOLDS

  • Spot USDCAD’s grind lower could come to a halt if key technical support holds around the 1.3000 handle
  • USDCAD pressure could accelerate if the major area of confluence fails to keep spot prices afloat
  • Sharpen your knowledge as a trader with these Top Trading Lessons

Spot USDCAD has edged lower over the last several weeks after printing its recent top of 1.3517 on May 31. Since then, the currency pair has swooned nearly 3.5% lower as upbeat Canadian Dollar prospects encompassing better-than-forecast economic data and a firm BOC coupling with US Dollar weakness driven by increasingly dovish Fed expectations contributed to the downward push.

From a technical perspective, spot USDCAD is now treading water slightly above support at the 1.3000 handle – a major level of confluence dating back decades. This area of support will need to be taken out before bearish momentum can continue.

SPOT USDCAD PRICE CHART: WEEKLY TIME FRAME (JUNE 05, 2016 TO JULY 19, 2019)

Spot USDCAD Price Chart Technical Analysis

Spot USDCAD selling pressure accelerated subsequent to the break of 2018’s bullish uptrend. Although, the currency pair threatens to stay afloat with technical support provided by the psychologically-significant 1.3000 price level – which happens to align with the 38.2% Fibonacci retracement of January 2019’s high and September 2017’s low. While premature, a potential inverse head-and-shoulder pattern could be forming. A sharp rebound higher off the current level of technical support would likely serve constructive to this thesis.

SPOT USDCAD PRICE CHART: DAILY TIME FRAME (MAY 27, 2019 TO JULY 19, 2019)

Spot USDCAD Price Chart Technical Analysis

Looking to a closer time frame, the short-term downtrend formed by the series of lower highs since mid-June, in addition to technical resistance posed by the 1.31 handle, both look to serve as near-side obstacles for USDCAD bulls to overcome. If this level can be topped, however, the door to 1.3200 could open up quickly where stops on short positions threaten to exacerbate upward price action.

USDCAD CLIENT SENTIMENT PRICE CHART: DAILY TIME FRAME (JANUARY 21, 2019 TO JULY 19, 2019)

USDCAD Client Sentiment Chart

As for spot USDCAD retail trader positioning, IG Client Sentiment data reveals that 59.3% of traders are net-long resulting in a long-to-short ratio of 1.46. Although, relative to last week, the number of traders net-long is now 4.8% lower whereas the number of traders net-short is now 10.2% higher. Register for free live webinars with DailyFX analysts to learn more about client positioning data and how to incorporate it into your trading strategy.

— Written by Rich Dvorak, Junior Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight

Oil Price Climbs as Iran Seizes British Ship in the Strait of Hormuz

Crude Oil Price & Iran Tanker Seizure in Strait of Hormuz – Talking Points

  • Stena Impero, a British-flagged oil tanker, has been seized by Iran’s Revolutionary Guard in the Strait of Hormuz
  • The incident comes after escalating tensions between Iran and the US following an Iranian drone being shot down by US warships in the area earlier this week
  • Iranian officials confirm a second ship, the Mesdar, has also been seized in the Strait

Crude oil futures are climbing after Iran’s Revolutionary Guard has seized two oil tankers in the Strait of Hormuz – one a British-flagged ship and a second ship flying under a Liberian flag. Crude oil futures climbed from $55.01 to $56.17 as news of the seized oil tankers crossed the wires. Oil remains off its recent high of $60.94 set on July 11th as global growth fears continue to weigh on the commodity. Data reported by the Energy Information Administration showed a fifth consecutive week of Crude inventory draws on Thursday, which did little to stem losses in crude oil prices as trading came to a close on Friday, marking the commodity’s worst weekly performance since May.

Crude Oil Futures Price Chart: 5-Minute Time Frame

Oil Price

Tensions have been high in the region for months since the US withdrew from a nuclear accord with Iran in May and then shortly after dispatched a carrier strike group to the region in a show of force towards Iran. However, Friday’s incident in the Strait of Hormuz may be an act of retaliation towards the UK specifically after British Royal Marines seized the Panamanian-flagged ship, Grace One, several weeks ago. The ship was believed to be transporting Iranian oil in violation of EU sanctions. The UK’s Defense Minister has called an emergency briefing, which is currently underway, with British MP Jeremy Hunt reportedly in attendance after saying he is “extremely concerned” by the situation.

Crude Oil Futures Price Chart: 2-Hour Time Frame

Oil Price Climbs as Iran Seizes British Ship in the Strait of Hormuz

Oil prices have performed considerably poorly as of late despite tensions in the Strait of Hormuz given the supply-shock risks as the region is considered to be one of the most vital sea routes for oil tankers.

As for demand, worries seem to be giving investors a pause on the commodity as trade tensions and concerns about economic growth slowdowns begin to reemerge – specifically in China and the Eurozone. The Federal Reserve has also taken notice, citing trade tensions as crosscurrents to global economic growth.

–Written by Thomas Westwater, Intern Analyst for DailyFX.com

Contact and follow Thomas on Twitter @FxWestwater

DailyFX forecasts on a variety of currencies such as the US Dollar or the Euro are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.

Euro Price at Risk as Implied Volatility Spikes Ahead of ECB

JULY ECB MEETING HIGHLIGHTSEURO CURRENCY VOLATILITY

  • EURUSD implied volatility looks set to rise off historic lows
  • EURGBP, EURCAD, EURJPY, EURAUD implied volatility measures also rise as the upcoming ECB monetary policy update looms
  • Download the free Q3 Euro Forecast from DailyFX for comprehensive fundamental and technical outlook

Earlier this month, we highlighted how EURUSD implied volatility dropped to multi-year lows. Euro implied volatility is showing signs of turning higher, however, as key event risk surrounding pivots in European Central Bank (ECB) and Federal Reserve (Fed) monetary policy begins to unfold.

According to overnight swaps pricing, it is more likely than not that the dovish turn in outlook by the ECB will be confirmed next week with the central bank teed up to cut its policy interest rate by 10 basis points. Although, if the ECB does act to ease monetary policy, it will likely spark Euro currency volatility seeing that the probability of an ECB rate cut at its July 25 meeting is near-split at 51.2% in favor of a cut with the remaining 48.8% priced for a hold.

EURUSD PRICE CHART: DAILY TIME FRAME (DECEMBER 27, 2018 TO JULY 19, 2019)

Spot EURUSD price chart technical analysis ahead of July ECB meeting

Spot EURUSD is estimated to fluctuate within a 182-pip range between 1.1136 and 1.1313 with a 68% statistical probability judging by EURUSD 1-week implied volatility of 5.86%. If the ECB cuts rates, spot EURUSD could be expected to make a bearish move below technical support provided by the 23.6% Fibonacci retracement of the May 2019 low from the December 2018 high, which would also threaten the recently-formed bullish uptrend line.

On the other hand, a firm stance on rates and steady outlook provided by the ECB and the central bank’s President Mario Draghi could keep spot EURUSD bid and reiterate the Euro’s recent strength relative to the US Dollar and send the currency pair toward the 1.13 handle.

EURUSD, EURJPY, EURGBP, EURCAD, EURAUD IMPLIED VOLATILITY CHART (1-WEEK)

EURUSD, EURJPY, EURGBP, EURAUD, EURCAD implied volatility ahead of July ECB Meeting

EURJPY and EURAUD are expected to be the most active major Euro currency pairs over the next week with 1-week implied volatility readings of 6.59% and 6.29% respectively. EURCAD, EURUSD and EURGBP follow closely behind in order with 1-week implied volatility readings of 5.69%, 5.68% and 5.53%. All of the 1-week Euro implied volatility readings have climbed substantially since Wednesday, which reflects the potentially high-impact event risk posed by the upcoming July ECB meeting next week.

— Written by Rich Dvorak, Junior Analyst for DailyFX.com

Connect with @RichDvorakFX on Twitter for real-time market insight

Oil Price Chart: Crude Crushed Down to Support – WTI Trade Levels

Crude Oil Prices are poised to mark a sixth consecutive daily decline today if price closes at these levels with the sell-off now targeting the first major support zone just lower. These are the updated targets and invalidation levels that matter on the crude oil price charts (WTI). Review this week’s Strategy Webinar for an in-depth breakdown of this oil price setup and more.

New to Oil Trading? Get started with this Free How to Trade Crude Oil Beginners Guide

Crude Oil Price Chart – WTI Daily

Crude Oil Price Chart - WTI Daily - Oil Technical Forecast

Technical Outlook: In my latest Oil Price Weekly Outlook we noted, “the immediate oil price advance is vulnerable while below confluence resistance at 60.06/47. From a trading standpoint, a good place to reduce long-exposure / raise protective stops. Be on the lookout for possible topside exhaustion to give way to a larger pullback in crude.” The subsequent five-day sell-off has now broken below the monthly open support and the objective July opening-range lows and leaves the risk for further losses heading into the close of the month.

That said, the immediate decline is now approaching initial areas of support which could interrupt the current oil price breakdown. Confluence support rests at 54.52/60 backed by the December trendline / 78.6% retracement at 52.89– both areas of interest for near-term exhaustion.

Why does the average trader lose? Avoid these Mistakes in your trading

Crude Oil Price Chart – WTI 240min

Crude Oil Price Chart - WTI 240minute - Oil Technical Forecast

Notes: A closer look at oil price action shows WTI posting a 4-hour outside-reversal bar off key resistance at 60.06/45 early in the week with the decline trading within the confines of a well-defined descendingpitchfork formation. Initial resistance at the median-line / monthly opening-range lows at 56.03/28 with broader bearish invalidation now lowered to the July open at 58.15. A break below the 54.52/60 support zone exposes subsequent downside objectives at 52.89 and 51.67– look for a bigger reaction there IF reached.

Learn how to Trade with Confidence in our Free Trading Guide

Bottom line: The oil price sell-off is approaching the first major support target and while the broader risk remains lower, the immediate decline may be vulnerable heading into 54.52/60. From a trading standpoint, a good spot to reduce short-exposure / lower protective stops – we’ll be on the lookout for possible downside exhaustion on a stretch lower.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Crude Oil Trader Sentiment (WTI)

Crude Oil Trader Sentiment - WTI Price Chart - Oil Technical Forecast

  • A summary of IG Client Sentiment shows traders are net-long Crude Oil – the ratio stands at +1.94 (66.0% of traders are long) – bearish reading
  • Long positions are 3.5% higher than yesterday and 22.3% higher from last week
  • Short positions are 4.6% lower than yesterday and 34.4% lower from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Oil prices may continue to fall. Traders are further net-long than yesterday & last week, and the combination of current positioning and recent changes gives us a stronger Oil – US Crude-bearish contrarian trading bias from a sentiment standpoint.

See how shifts in Crude Oil retail positioning are impacting trend- Learn more about sentiment!

Active Trade Setups

– Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex

Silver Price Forecast: Uptrend May Continue Towards New Multi-Month High

Silver Price Forecast

  • Silver chart and analysis.
  • Silver price at its highest level in nearly 13 months.

Did you check our latest forecasts on USD and Gold? Find out more for free from our Q3 forecasts for commodities and main currencies

Silver Price – The Buyers Domination

This week Sliver took off breaking above the Feb 20 high at $16.21 and printed today $16.47- its highest in nearly 13 months.

Alongside this the Relative Strength Index (RSI) pointed higher crossing above 50 and since Tuesday the oscillator has been moving in the overbought territory emphasizing the strength of the bullish momentum.

Having trouble with your trading strategy? Here’s the #1 Mistake That Traders Make

SiLver DAILY PRICE CHART (JuNe 25, 2017 – JUly 19, 2019) Zoomed out

Silver price daily chart 19-07-19 Zoomed Out

SiLver DAILY PRICE CHART (Mar 27 – JULY 19, 2019) Zoomed In

Silver price daily chart 19-07-19 Zoomed in

Looking at the daily chart we notice yesterday Silver moved to a higher trading zone $15.63 – $16.25. Therefore, if the price remains above the low end of this zone then it may rally towards the high-end, however, the weekly resistance levels underlined on the chart (zoomed in) need to be watched closely. See the chart to know more about where the rally might stop in a further bullish scenario.

On the other hand, a close below the low end suggests the price could press towards $15.63 nonetheless, the weekly support levels underscored on the chart (zoomed in) should be monitored along the way.

Just getting started? See our Beginners’ Guide for FX traders

Silver Four-HOUR PRICE CHART (JuLY 4 – JULy 19, 2019)

Silver price four- hour chart 19-07-19

Looking at the four-hour chart, we notice on July 5 Silver rebounded from $14.89 then started an upside move creating higher highs with higher lows. On July 12 mentioned move accelerated drawing a steeper uptrend line.

If the upside move continues, then a break above $16.56 may send the price towards $16.83 however, the weekly resistance level underlined on the chart needs to be kept in focus.

On the other hand, the uptrend may correct lower if Silver breaks below the $16.00 handle, this could see the price trading towards the July 17 low at $15.74 although, the weekly support marked on the chart needs to be considered.

Written By: Mahmoud Alkudsi

Please feel free to contact me on Twitter: @Malkud

EURUSD Drops as Italy Risks Snap Elections, USDCAD Spikes – US Market Open

MARKET DEVELOPMENT – EURUSD Drops as Italy Risks Facing Snap Elections, USDCAD Spikes

DailyFX 2019 FX Trading Forecasts

EUR: A recovery in the US Dollar after Fed’s Williams faux pas had been clarified, has weighed on the Euro, which is once again back towards the low 1.12s. Overnight, comments from Fed’s Williams had led to a surge in bets for a 50bps rate cut, however, this had later been clarified by a spokesperson, noting that this was not in relation to the upcoming meeting, thus sparking a pullback in 50bps cut expectations. Keep in mind as well that the most dovish FOMC member, Bullard, had previously stated that a 50bps cut would be somewhat overdone.

Aside from the communication error at the Fed, Italian risks are once again plaguing the market with the FTSE MIB notably underperforming as tensions rise between the League and 5 Star Party. Yesterday, both parties had stated that the coalition were at risk of breaking, consequently raising the prospect of a snap election. Bund-BTP spreads are modestly wider this morning, keeping the Euro on the backfoot, most notably against the Swiss Franc.

CAD: The Canadian Dollar fell to fresh weekly lows following soft retail sales (-0.1% vs. Exp. 0.3%), which had also coincided with soft oil prices. However, the Loonie has since pulled off worse levels amid offers at 1.31.

EURUSD Drops as Italy Risks Snap Elections, USDCAD Spikes - US Market Open

Source: DailyFX, Thomson Reuters

IG Client Sentiment

EURUSD Drops as Italy Risks Snap Elections, USDCAD Spikes - US Market Open

How to use IG Client Sentiment to Improve Your Trading

WHAT’S DRIVING MARKETS TODAY

  1. Gold Price Soars Through Resistance, Consolidation Needed Ahead of Next Push” by Nick Cawley, Market Analyst
  2. GBPUSD Outlook: Volatility Begins to Awaken as Brexit Risks are Priced In” by Justin McQueen, Market Analyst
  3. USDCAD, GBPUSD, EURJPY & More – Charts to Watch Next Week” byPaul Robinson, Currency Strategist
  4. Using FX To Effectively Trade Global Market Themes at IG” by Tyler Yell, CMT , Forex Trading Instructor

— Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX