A move above the resistance point at 1.0070 will invalidate the bearish view.

Bearish view

• Set a sell-stop at 0.9950 and a take-profit at 0.9800.
• Add a stop-loss at 1.0050.
• Timeline: 1-2 days.

Bullish view

• Set a buy-stop at 1.0030 and a take-profit at 1.0100.
• Add a stop-loss at 0.9950.

The EUR/USD currency pair was hovering at the parity level on Tuesday morning as investors waited for important economic data from Europe and the US. It was trading at 1.000, which was slightly above this month’s low of 0.9902.

US and EU confidence data

The EUR/USD price moved sideways at the parity level as investors reflected on last week’s statement by Jerome Powell and other Fed officials like Neel Kashkari.

Speaking at the Jackson Symposium, Federal Reserve officials reiterated that the bank will continue hiking interest rates in the coming months. This decision mirrored what the officials wrote in the last meeting.

The next key catalyst for the pair will be the important economic data from the United States and Europe. In the morning session, the European Commission will publish the latest consumer and business confidence data.

The numbers are expected to show that sentiment continued to drop in August as challenges rose. For example, consumer confidence is expected to have dropped to -24.9 in August. They also expect that services and industrial sentiment dropped sharply in August.

This happened as the cost of energy and basic items in Europe jumped sharply. Indeed, European leaders are scheduled to meet this week to deliberate on the possible action to cushion their residents as prices rise.

The EUR/USD pair will also be moved by the flash inflation data from Germany, Belgium, and Spain. With gas and electricity prices rising, analysts expect that inflation rose sharply in August. For example, the expectation is that inflation in Spain rose to 10.9% while in Germany it rose to 8.8%.

The pair will also react to the latest US consumer confidence data by Conference Board. Economists expect that confidence improved in August as gasoline prices eased.

EUR/USD forecast

The EUR/USD price moved sideways on Tuesday morning. This price managed to move below the 25-day and 50-day moving averages. It is also trading at the standard pivot point. At the same time, it has formed what looks like an inverted cup and handle pattern, which is usually a bearish sign. This consolidation can be viewed as the handle section.

Therefore, there is a likelihood that the pair will soon have a bearish breakout as sellers target the next psychological level at 0.9800. A move above the resistance point at 1.0070 will invalidate the bearish view.

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The EUR/USD sell-off paused slightly ahead of the upcoming minutes by the ECB.

Bearish view

• Sell the EUR/USD pair and set a take-profit at 0.9850.
•  Add a stop-loss at 1.0025.
• Timeline: 1 day.

Bullish view

• Set a buy-stop at 1.0010 and a take-profit at 1.0100.
• Add a stop-loss at 0.9925.

The EUR/USD price moved sideways on Thursday morning as investors waited for the upcoming European Central Bank (ECB) minutes. The pair was trading at 0.9962, which was slightly above this week’s low of 0.9900.

ECB minutes, US GDP, and Jackson Hole

The EUR/USD sell-off paused slightly ahead of the upcoming minutes by the ECB. These minutes will provide more color about the deliberations that happened in the committee during the July meeting. In it, the members decided to hike interest rates for the first time in 11 years. It hiked by 0.50% and hinted that more increases were coming.

Therefore, the minutes will shed more light on whether the committee expects rates to keep rising even as the economic crisis escalates. In addition to high inflation, Europe is facing additional challenges like a prolonged drought that has led to substantially low water levels in key rivers. At the same time, the bloc risks power rationing in winter.

The EUR/USD price will react to the latest German GDP and business sentiment data. Based on the first estimate, analysts expect that the German economy expanded by 1.5% year-on-year in the second quarter. The country is under intense pressure because of its reliance on German natural has.

Meanwhile, analysts expect data by the IFO Institute to show that business climate, current assessment, and expectations dropped sharply in August. This will be in line with the relatively weak flash manufacturing and services PMI numbers that were published on Tuesday.

In the United States, the main event will be the Jackson Hole Symposium where central bank officials will have a chance to reset expectations. Jerome Powell’s speech will be the headline event. Christine Lagarde will not attend the event.

The second reading of US GDP data will not significantly impact the pair unless there is a major change. Data published in July showed that the economy moved to a recession in Q2 as it contracted by 0.8%.

EUR/USD Forecast

The EUR/USD pair has been in a strong bearish trend in the past few weeks. It moved from this month’s high of 1.0368 to below the parity level. On the four-hour chart, it dropped below the important support at 1.0095 and the 25-day and 50-day moving averages,

It has also formed what looks like a bearish consolidation pattern. Therefore, the pair will likely resume the downward trend and retest the key support at 0.9850.

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If we break down below the ¥101 level, that could be a major turnaround just waiting to happen.

The Canadian dollar has rallied a bit during the trading session on Wednesday to show signs of life again, as we are now threatening the ¥105 level. Furthermore, the 50-Day EMA is sitting right around the same level as well, so I think it’s probably only a matter of time before we see a bit of a fight on our hands.

Factors to Keep in Mind

• The oil markets because we do see some type of recovery in the oil markets, which obviously helps the Canadian dollar.
• Most of the effort in this market will probably come from the Japanese side of the equation.
• The Bank of Japan continues to fight to keep the 10-year yield in that country down to 0.25%, which is a Herculean effort, to say the least as interest rates around the world have been rising.

In fact, Japan has seen inflation for most of this year, which is the first time in years. Because of this, the Bank of Japan has to step in and continue to buy “unlimited bonds” in order to keep the bench right where it wanted. That’s tantamount to printing “unlimited yen”, which obviously increases the supply of that currency in the markets. If the interest rates around the world continue to rise, the Japanese yen will continue to take it on the chain, which is what we have seen everywhere, not just against the Canadian dollar.

Ultimately, we are in an uptrend, and now the question is whether or not we can break significantly above the ¥105 level. If we cannot, it’s more likely than not that we are going to see a sideways type of market, with the ¥102 level underneath offering support, as we banged around and tried to work off some of the froth. If we break down below the ¥101 level, that could be a major turnaround just waiting to happen. A lot of this is going to come down to the overall yields in bonds, not just these 2 countries. Because of that, you need to keep a broad-based perspective on yields.

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It looks like we are threatening a major breakout.

The US dollar has rallied during early trading on Wednesday to reach the 50 Day EMA against its Japanese counterparts. Because of this, it looks like we are threatening a major breakout, and if we can get above the highs of the trading session, it’s very likely that the US dollar will continue to climb and go looking toward the highs yet again.

The FOMC Meeting Minutes came out during the day, and some traders thought of them as being a bit dovish. Because of this, we have seen a bit of a pullback from the highs of the day, but it’s also probably worth noting that the pullback was relatively small, so there still seems to be a certain amount of conviction. I believe that the uptrend is still very strong, and it is probably only a matter of time before we see buyers resume their efforts.

• Pullbacks at this point should be thought of as potential buying opportunities, especially near the ¥131 level.
• I think there is a lot of support near the ¥127 level as well.
• We are essentially looking at the ¥127 level as a “floor in the market”, and a “flooring the trend”, at least for the time being.

On the upside, we have the ¥140 level as a potential target, but it’s probably going to take a while to get there. The ¥140 level is a large, round, psychologically significant figure in an area that we have seen a lot of fighting at in the past. It would not surprise me at all to see the market test that area again and cause a lot of noise once it gets there.

What Do We Anticipate for USD/JPY?

I anticipate that the USD/JPY market will continue to be very noisy and erratic, following the bond markets as the Bank of Japan continues to fight higher yields. They are essentially doing the same thing as printing yen consistently, while the rest of the world is tightening monetary policy. This is why all Japanese yen-related currency pairs are moving in lockstep at the moment because this is more about Japan than anything else currently. If we see yields rise in the United States, that only adds more fuel to the fire.

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The pair will likely have a bullish breakout in the near term.

Bullish View

• Buy the BTC/USD pair and set a take-profit at 26,000.
• Add a stop-loss at 23,500.
• Timeline: 1-2 days.

Bearish View

• Set a sell-stop at 23,500 and a take-profit at 22,000.
• Add a stop-loss at 25,500.

The BTC/USD price moved sideways and remained above the important support at $24,000 as the recent rebound stalled. The pair was trading at 24,155 on Tuesday, which was lower than this week’s high of 25,200. It is also about 37% above the lowest level this year.

Bitcoin Recovery Stalls

The BTC/USD pair moved sideways as investors focused on the relatively strong US dollar. The dollar index rose by more than 0.80% in the overnight session and was trading at $106.33, which was the highest point in about two weeks. Bitcoin has an inverse relationship with the US dollar.

Further, the performance happened as investors saw the VIX index rise by more than 2.30%. This performance was mostly because of the ongoing weakness in China.

Data published by the country’s National Bureau of Statistics (NBS) showed that industrial production, fixed asset investments, and retail sales declined in July. As a result, the country’s central bank decided to cut two important interest rates.

The BTC/USD price also wavered in line with the performance of other cryptocurrencies. ETH moved back below $2,000 while the total market cap of all cryptocurrencies declined to $1.23 trillion.

The next key catalyst for Bitcoin will be the upcoming minutes of the Federal Open Market Committee (FOMC) that are scheduled for Wednesday. These minutes will provide more information on what happened in last month’s meeting.

Still, there is a high possibility that the bank will continue hiking interest rates in the coming months even as inflation pulls back.

BTC/USD Forecast

The four-hour chart shows that the BTC price has been in a slow bullish trend since June this year. Since then, it has managed to move from a low of 17,600 to a high of 25,202. Along the way, the pair formed what looks like an ascending triangle pattern, which is usually a bullish sign. The triangle has now moved to its confluence level.

At the same time, it has moved above the 25-day and 50-day moving average. The Know Sure Thing (KST) indicator has moved above the neutral point. Therefore, because of the ascending triangle pattern and the strong performance of American equities, the pair will likely have a bullish breakout in the near term. If this happens, the next key reference level to watch will be at 26,000.

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The pair will likely have a bullish breakout this week as investors target the next key resistance point at 26,000.

Bullish View

• Buy the BTC/USD pair and set a take-profit at 26,000.
• Add a stop-loss at 23,000.
• Timeline: 1-2 days.

Bearish View

• Set a sell-stop at 23,500 and a take-profit at 22,000.
• Add a stop-loss at 25,000.

The BTC/USD price moved solidly above the resistance point at 24,000 as sentiment in the market improved. It rose to a high of 24,955, which was the highest level since June 13th of this year, meaning that it has recovered by about 40% from its lowest level this year.

Market Sentiment Improving

The BTC/USD pair continued its recovery as investors focused on corporate earnings and the falling American consumer and producer inflation.

On Wednesday, data published by the American government showed that the country’s consumer inflation dropped from 9.1% in June to 8.7% in July. In the same period, the producer price index (PPI) declined sharply as the cost of fuel pulled back.

These numbers showed that the Federal Reserve will likely slow its rate hiking cycle in the coming months. Still, most Fed officials who have talked after the data came out insisted that the bank will likely continue tightening in the coming months. They noted that inflation remains substantially above the Fed’s target of 2.0%.

The BTC/USD price also rose as the US dollar index retreated from its highest point this year. The dollar index retreated from the year-to-date high of $109.30 to about $106. This performance was mostly because of the performance of US inflation.

Meanwhile, it seems like investors are getting greedy. The fear and greed index that is tracked by CNN Money closed at 55 on Friday. This price is a few points below the greed level of 50 but it is substantially above its lowest level this year. As a result, the main American indices like the Dow Jones, Nasdaq 100, and S&P 500 have moved to a bull market.,

On the other hand, Bitcoin’s fear and greed index rose to 50, which was higher than last month’s low of 15.

BTC/USD Forecast

The four-hour chart shows that the BTC/USD price has been in a slow upward trend in the past few weeks. Along the way, the pair formed an ascending triangle pattern that is shown in purple. This triangle is usually a bullish sign. It has also remained above the 25-day and 50-day moving averages while the Stochastic Oscillator has moved slightly below the overbought level.

Therefore, the pair will likely have a bullish breakout this week as investors target the next key resistance point at 26,000.

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Bullish View

• Set a buy-stop at 24,600 and a take-profit at 25,500.
• Add a stop-loss at 22,500.
• Timeline: 1-2 days.

Bearish View

• Set a sell-stop at 23,450 and a take-profit at 22,000.
• Add a stop-loss at 25,000.

The BTC/USD price jumped in the overnight session as the market reflected on the latest US inflation data. It crossed the important resistance at 24,000 for the first time since last week and is about 35% above the lowest level this year.

US Inflation Data

The BTC/USD price jumped sharply as investors reacted to the latest US consumer price index numbers. According to the Bureau of Labor Statistics (BLS), the country’s consumer price index declined from 1.3% in June to 0.0% in July. This decline was smaller than the median estimate of 0.2%. It then translated to a year-on-year increase of 8.5%, which was lower than the expected 8.7%.

Further data showed that the country’s core inflation dropped from 0.7% to 0.3%, which was lower than the expected 0.5%. On a YoY basis, this inflation remained unchanged at 5.9%. The two figures were still bigger than the Fed’s target of 2.0%.

Therefore, analysts believe that the Fed could start slamming its brakes on hiking interest rates since inflation has started to drop. They expect that it will hike by 0.5% in September followed by 0.25% in the final two meetings of the year.

The BTC/USD pair rose after the report because of the significantly weaker US dollar. The dollar index dropped by more than 1.25% to $104.93. At its peak this year, the index was trading at $109.30. Similarly, America’s short-term bond yields slipped, with the 10-year falling to 2.788% and the 5-year dropping to2.9%.

Meanwhile, other assets also continued their comeback. Gold soared to the highest point in months while American indices like the Dow Jones, Nasdaq 100, and the Russell 2000 rose by more than 1.50%.

BTC/USD Forecast

The four-hour chart shows that the BTC/USD pair dropped to a low of 22,724 on Wednesday. This was a notable level since it was along the ascending trendline shown in green. It then bounced back after the US published weak inflation numbers. The pair has moved above the 25-day and 50-day moving averages while the MACD has moved slightly above the neutral point.

The pair will likely have a bullish breakout in the coming days. This view will be confirmed if it manages to move above the upper side of the ascending triangle pattern at 24.400.

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Still selling off from yesterday’s spike to above $1.0350.

My previous EUR/USD signal last Thursday not triggered as there was no bearish price action when the key resistance level at $1.0121 was first reached.

Today’s EUR/USD Signals

Risk 0.75%.

Trades may only be entered between 8am and 5pm London time today.

• Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0211 or $1.0245.
• Place the stop loss 1 pip above the local swing high.
• Move the stop loss to break even once the trade is 20 pips in profit.
• Take off 50% of the position as profit when the price reaches 50 pips in profit and leave the remainder of the position to run.

Long Trade Ideas

• Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0073, $1.0042, or $1.0000.
• Place the stop loss 1 pip below the local swing low.
• Move the stop loss to break even once the trade is 20 pips in profit.
• Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.

The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.

EUR/USD Analysis

In my last analysis of the EUR/USD currency pair on 4^th August, I noted that we were seeing strong selling every time the price got near the $1.0300 handle, but also strong buying every time the price approached the $1.0100 area.

This was a good call as the price remained ranging within this area until yesterday’s news about lower-than-expected US inflation sparked a selloff in the US Dollar, sending the price breaking out of its consolidating triangle chart pattern and spiking up to an area above $1.0350.

It is interesting that the spike not only did not last, but that we are seeing the price continue to descend consistently, with the price now trading well below $1.0300 and returning to the area of its medium-term consolidation.

This shows that the Euro is a relatively weak currency, so trading this pair long even when the US Dollar is weak is maybe not a good idea. There are other currency pairs that seem to be working better with Dollar weakness, such as any of the commodity currency pairs such as AUD/USD, NZD/USD, or USD/CAD.

Both the nearest support levels at $1.0250 and $1.0202, as well as the nearest support level at $1.0294, look firm and likely to hold at least for a while when next reached. I think scalping off reversals at any of these levels, especially $1.0250 which looks especially attractive, will be the best strategy to use in trading this pair today.

Concerning the USD, there will be a release of PPI data at 1:30pm London time. There is nothing of high importance scheduled today regarding the EUR.

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The pair will likely continue rising as bulls target the next key resistance point at 0.7055.

Bullish View

• Buy the AUD/USD pair and set a take-profit at 0.7055.
• Add a stop-loss at 0.6940.
• Timeline: 1 day.

Bearish View

• Set a sell-stop at 0.6950 and a take-profit at 0.6875.
• Add a stop-loss at 0.7060.

The AUD/USD price recovered as the US dollar retreated. The pair rose to a high of 0.7000, which was the highest point since August 2nd. It has also rebounded by more than 1.85% from the lowest level on Friday after the US published strong jobs data.

US Consumer Inflation Data Ahead

The AUD/USD pair rose slightly as the US dollar retreated. The dollar index retreated by about 0.40% in the overnight session as investors continued focusing on last Friday’s jobs data. According to the Bureau of Labor Statistics (BLS), the economy added over 528k jobs in July while the unemployment rate dropped to 3.6%.

Wages also continued rising. As a result, investors now believe that the Federal Reserve will continue hiking interest rates in the coming months. In an interview on Sunday, Mary Daly said that she supported a 0.50% rate hike in September.

In a separate report, Michelle Bowman, a Fed governor said that she strongly supported last month’s 0.75% rate hike. She added that she also supported similar rate hikes until inflation started declining in a consistent and lasting way.

There will be no major economic data from Australia. Therefore, the next key data to watch will be the upcoming inflation data from the US. Economists expect the data to show that inflation dropped from 1.3% to 0.2% on a month-on-month basis. They also expect that prices dropped from 9.1% to 8.7% on a year-on-year basis.

Further, economists expect the data to show that core CPI fell from 0.7% to 0.5%. On a YoY basis, they expect that core CPI rose from 5.9% to 6.1%. These numbers are still substantially higher than the Fed target of 2.0%.

AUD/USD Forecast

The four-hour chart shows that the AUD/USD pair has formed a double-bottom pattern at 0.6887. In price action analysis, this pattern is usually a bullish sign. It has now moved slightly above the 25-day and 50-day moving averages.

The pair has moved slightly below the first resistance of the standard pivot point while the Relative Strength Index (RSI) has pointed upwards. Therefore, the pair will likely continue rising as bulls target the next key resistance point at 0.7055. This price was the highest point since August 1st.

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The pair will likely continue falling as sellers target the support at 1.1900.

Bearish View

• Sell the GBP/USD and set a take-profit at 1.1900.
• Add a stop-loss at 1.2150.
• Timeline: 1-2 days.

Bullish View

• Set a buy-stop at 1.2130 and a take-profit at 1.2200.
• Add a stop-loss at 1.2065.

The GBP/USD price came under pressure on Monday morning as investors focused on the strong American jobs numbers. The pair was trading at 1.2070 on Monday, which was lower than last week’s high of 1.2295.

Hawkish Fed After US jobs data

The GBP/USD pair made a strong bearish breakout last week even after the Bank of England (BoE) decided to hike interest rates by 0.50%. This was the biggest rate hike since 1994 and is a sign that the bank is committed to continuing with its battle against inflation.

However, the bank also warned that the UK economy was in danger of moving to a recession in the fourth-quarter of the year. This warning implied that the BoE will likely slow the pace of its interest rate hikes later this year.

The GBP/USD pair also dropped after Nancy Pelosi’s trip to Taiwan. Shortly after the trip, China started drills on how it will finally attack Taiwan. These drills continued during the weekend and analysts believe that China will likely accelerate its invasion plans.

The other main catalyst for the sterling sell-off was the strong American jobs data. According to the Bureau of Labor Statistics (BLS), the economy added over 525k jobs in July, a major surprise because of the recent trends in the labor market. Companies like Microsoft, Oracle, Robinhood, and Netflix have all announced layoffs this year.

The unemployment rate dropped to 3.5% while the participation rate continued rising. Notably, wages continued rising in July even though they are growing at a slower pace than inflation. Therefore, these numbers will likely put pressure on the Federal Reserve to continue tightening.

The key data to watch this week will be the upcoming US consumer and producer inflation data and the latest UK GDP numbers.

GBP/USD Forecast

The four-hour chart shows that the GBP/USD pair was in a bullish trend since July 15th. As it rose, the pair formed an ascending channel pattern that is shown in green. It managed to move below the lower side of the channel after the BOE decision and the US NFP data.

It has dropped below the 25-day and 50-day moving averages and is slightly above the important support at 1.2052, which was the highest point on July 8th. The MACD has also moved slightly below the neutral level. Therefore, the pair will likely continue falling as sellers target the support at 1.1900.

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