Weekly Technical Analysis For July 29th to August 2nd, 2019

A Huge Week For Trading: Watch Out For The Fed Rate Decision And US NFP

EUR/USD:

The European Central Bank kept rates unchanged in last week's meeting. The ECB Chair Draghi indicated the bank was prepared to cut rates in September and consider other options for easing. However, he also said the risk of a recession in the region was low.

US Gross Domestic Product (GDP) expanded by 2.1% on a yearly basis in the second quarter following the 3.1% growth recorded in the first quarter and surpassed the market expectation of 1.8%. On the other hand, the US Core PCE was lower than expected at 1.8% versus 2.0% estimate.

In the upcoming week, the Federal Reserve will announce its latest monetary policy decision on Wednesday. Markets have fully priced in a quarter-point reduction in interest rates at the July 31 Fed decision. Fed Chair Jerome Powell will hold a press conference following the meeting, with awaiting his insights on the policy outlook.

Moreover, the U.S. Labor Department will publish its monthly employment report for July on Friday. US Nonfarm Payrolls is expected to see 160K jobs created after rising 224K the previous month. The Unemployment Rate is expected to stay at 3.7%. Average hourly earnings will also be significant and are expected to be 0.2% the same as the previous month's number of 0.2%. An upbeat employment report will point to an improving US economy and support the greenback.

The EURUSD pair dropped to the 1.1103 daily support level last week. As long as the price stays above 1.1103, on a daily basis, the downward movement may be limited and we will see 1.1219 again. On the other hand, if the price breaks down 1.1103, we will follow 1.0980 as a daily support level.

Support:  1.1103 - 1.0980 - 1.0837 

Resistance:  1.1219 -  1.1285 - 1.1355

GBP/USD: 

In the UK, Boris Johnson took office as Britain's new prime minister last week. However, the market worries that Johnson would lead Britain into a no-deal exit from the EU. 

Looking ahead, the Bank of England is expected to keep rates unchanged at its policy meeting on Thursday. Most economists think the British central bank will wait until Britain leaves the European Union with a deal.

As long as the GBPUSD pair stays below the 1.2395 major level, on a daily basis, the selling pressure may gain more momentum. On the other hand, if the price rises above 1.2395, we will face 1.2528 as a daily resistance level. 

Resistance: 1.2395 - 1.2528 - 1.2607

USD/JPY:

The Bank of Japan has a policy decision on Tuesday, but economists expect it to keep monetary policy on hold.

The USDJPY pair moved up above the major level of 108.49 last week. As long as the pair sustains above 108.49 on a daily basis, the bullish action may continue and we will face the resistance levels at 108.95 and 109.57. On the other hand, if the pair drops below 108.49, the next support level will be placed at 107.70
 
Support : 108.49 - 107.70 - 106.72
 
Resistance : 108.95 - 109.57 - 110.35

GOLD:

We will closely watch the main support level of 1414. As long as the price stays above that level on a four hourly basis, the fall may be limited and we will see the resistance level at 1451 again. Otherwise, If the price breaks down below 1414, the daily support level can be seen in 1391.

Support:  1414 - 1391 - 1364 

Resistance: 1451 - 1483

28 Jul 19 (Sun)

07:34 pm


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