The USD/MXN is near the 20.00000 as of this morning and speculators will have to interpret their technical perceptions carefully.

Short term trading in the USD/MXN has produced slightly consolidated trading. However, the USD/MXN currency pair remains within sight of rather important support levels having demonstrated a solid wave of selling late last week and essentially sustaining lower values. Yes, the past two days did see a moderate step upwards. On the 15^th of August the USD/MXN was trading near a low of 19.81000, which it had last really seen on the 27^th of June.

Currently the USD/MXN is near the 20.00000 mark and showing some ability to remain under this level. Technically the USD/MXN remains in what can be described as its bearish territory, when a one year chart is being inspected. In late May and early June of this year the USD/MXN did test the 19.50000 ratio. What makes this intriguing is the fact the Mexican Peso has been one of the strongest major currencies versus the USD over the past year.

Technical Traders do have a rather fascinating Price Range to Consider

Taking into consideration the ability of the USD/MXN to maintain a rather bearish stance compared with many of the other major Forex pairs, a technical question must be asked. As the price of Crude Oil seems to become more tranquil and financial houses consider the potential that U.S inflation may be lessening does this mean the current trading range of the USD/MXN will produce continued solid trading opportunities?

• Important support for the USD/MXN appears to be the 19.90000 to 19.80000 vicinity, if the lower number is challenged and proves durable this could be make for a worthwhile buying wager.
• Resistance near the 20.15000 ratio should be watched in the near term, if this level is sustained, sellers could be tempted to short the USD/MXN within this vicinity.

Risk Taking Tactics Combined with Solid Technical Short Term Perspective of the USD/MXN

Technical traders who are experienced may enjoy speculating on the USD/MXN.  If the current range of 19.80000 to 20.15000 is maintained it may prove to be solid wagering ground by taking advantage of support and resistance.

Risk taking tactics should include solid entry levels with carefully chosen stop loss ratios. Looking for quick hitting take profit order to cash out winning positions may prove effective with a slightly wider stop loss being used. But that means very conservative leverage should be used by most traders. If the current trading range holds in the near term, it could provide speculative opportunities for those willing to bet on perceived direction.

USD/MXN Short Term Outlook:

Current Resistance: 20.04900

Current Support: 19.91050

High Target: 20.21000

Low Target: 19.76000

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ETH/USD has been able to reverse higher off of extreme lows which were displayed this Saturday, but speculators should remain braced for more volatile conditions.

ETH/USD is trading near 1135.00 as of this writing.  Speculators can double check current prices to monitor the movement Ethereum has demonstrated compared to this article as a way to judge momentum within ETH/USD. After hitting a low of nearly 880.00 this past Saturday, ETH/USD has been able to produce upwards momentum. However, traders who have been attuned to Ethereum over the long term know that a bearish trajectory remains troubling.

If ETH/USD can maintain its current price above the 1100.00 in the short term, that could create the prospect for very speculative bets on upside prospects. However any trader who dares to look for higher movement from ETH/USD will not only have to be brave, but they will need to be using their entire gauntlet of risk taking tactics. Trading in Ethereum today and near term should include entry price, stop loss and take profits orders. Simply put the possibility of ETH/USD suddenly becoming volatile is rather good. Short term moves higher do not guarantee that a solid upwards climb is going to be maintained.

The broad cryptocurrency market remains a dangerous place to speculate. Traders who remain skeptics and believe more downside momentum will be generated within ETH/USD and the other major cryptocurrencies may be making the logical choice, but being able to capture moves lower will also need a solid dose of risk management. Large percentage changes of value can make a trader profitable, but wrong moves can also be costly.

If ETH/USD breaks below the 1100.00 mark this could spark additional selling in ETH/USD.  A move to 1075.00 in Ethereum would not be a welcome site if price velocity bursts forward. Support below the 1050.00 level should be monitored, because if this level proves vulnerable another move to lower depths could develop.  Another move below 1000.00 in the near term would be a bad signal for ETH/USD and greater declines could ensue.

Traders should not be overly ambitious in the current market, they should be willing to cash out profits when they are satisfied, this before watching money vanish into thin air when reversals develop which go against the chosen direction of a desired target. The ability of ETH/USD to climb higher the past couple of days incrementally should serve as strong reminders price movements do not happen in only one direction, even if there is solid trend to observe. 

Ethereum Short Term Outlook:

Current Resistance: 1158.00

Current Support: 1088.00

High Target: 1284.00

Low Target: 933.00

The Japanese yen fell to its lowest level against the dollar in 24 years as the growing gap between the monetary policy of the US Federal Reserve and the Bank of Japan attracts money towards the US. The USD/JPY currency pair recently reached the resistance level of 135.50 and the currency pair crossed the 135.19 level for the first time since 1998. Given the recent volatility, these extreme moves are only expected to continue, as the yen tests the thresholds key such as level 140 which could lead to the intervention of Bank of Japan Governor Haruhiko Kuroda.

The Japanese yen’s implied volatility has reached its highest levels since the outbreak of the pandemic amid uncertainty over global growth and the central bank’s aggressive policy to control the yield curve. With the spread between US and Japanese two-year government bonds at its widest since 2007, conditions are ripe for the US currency to maintain its upward trajectory. If the Fed raises 75 basis points on Wednesday as expected, it is likely to further strengthen the dollar.

US producer prices rose 10.8% in May from a year earlier, underscoring the continuing threat to the US economy from inflation that shows no sign of slowing. Yesterday’s report from the US Labor Department showed that the Producer Price Index which measures inflation before it reaches consumers, rose at a slightly slower pace last month than it did in April, when it jumped 10.9% from a year earlier, down from 11.5% annually. March gains.

On a monthly basis, producer prices rose 0.8% in May from April, higher than the previous month, when they rose 0.4%. Energy prices, led by gas, rose only 5% in May from April. The other big driver of price gains last month was the sharp 2.9% increase in the cost of trucking goods, a sign that supply chain problems are not yet fully resolved. Food costs have not changed.

The numbers suggest that price hikes will continue to erode Americans’ salaries and wreak havoc on household budgets in the coming months. Inflation has caused major political problems for US President Joe Biden and Democrats in Congress and forced the Federal Reserve into a series of rapid interest rate increases aimed at slowing the economy and dampening rate increases.

Last Friday, the government reported that inflation according to the US Consumer Price Index jumped to a new 40-year high of 8.6% in May, a surprise gain that disappointed expectations that price increases may slow. Gas and food costs rose sharply, spurred on by Russia’s invasion of Ukraine, but costs for rent, new and used cars, medical care and clothing also rose, evidence that inflation is spreading more widely across the economy.

The Fed is expected to raise the short-term interest rate by three-quarters of a point today, the largest increase since 1994, as it ramps up efforts to rein in high rates.

According to the technical analysis of the pair: the recent indications that there will be no intervention to stop the collapse of the yen until it reaches a price of 140 against the dollar. This allows the bulls to hold on to their record gains, which pushed the technical indicators on the USD/JPY chart towards strong overbought levels. If the decisions of the US Federal Reserve come in support of a strong path to raise the US interest rate, the bulls may head in the currency pair towards the resistance levels 136.30 and 137.75 before the specified top of the intervention.

On the other hand, if the US Central Bank’s announcement today is less hawkish, the dollar-yen currency pair may be exposed to profit-taking operations. There will not be a break in the general trend without moving below the 130.00 level.

This week, it will be unusual in the reaction to the price of the GBP/USD currency pair, as the currency pair will await the announcement of interest decisions from both the Bank of England and the US Federal Reserve.

The sharper tone towards more rate hikes will benefit one of the currencies. Amid the recent strength of the US dollar with expectations of raising US interest rates, the sterling dollar currency pair fell towards the 1.2411 support level, its lowest since July 2020, and it may start trading this important week, stable around the 1.2580 level.

At the end of last week’s trading, the currency pair tried to rise as the British pound is looking to recoup some of this week’s losses of 2.5 percent against the rise of the US dollar. All in all, the US dollar had a particularly strong month and yielded good returns for traders who were betting on one of the strongest trends in the global financial markets.

There are no headlines or key terms to explain the dollar’s decline ahead of the weekend, but purely technically it was bound to happen at some point: the GBP/USD and other dollar pairs are in oversold territory now. A look at the daily chart of the GBP/USD pair shows that the Relative Strength Index (RSI) has dropped significantly below the oversold water mark at 30. This does not represent a trend reversal. The Relative Strength Index (RSI), an indicator that can give clues to the momentum of a financial market while also indicating when the market is oversold or overbought. Anything less than 30 is oversold, and the above shows that the GBP-Dollar did not reach such oversold conditions during 2022. When it was last oversold in March, there was a further rally, but it did not represent a turn in trend .

The last time sterling reached more oversold states was back in 2020 when markets were in complete panic regarding the spread of the Covid-19 virus. A correction in the RSI will be inevitable: this could mean a higher recovery or simply a pause in the downward movement and some of the following days of bearish movement.

This does not necessarily mark the end of a downtrend that has been in place for nearly a year now.

JP Morgan’s forex analysts this week lowered their forecast for the pound-dollar exchange rate, largely as an admission that the dollar’s continued rally should continue further. “The system of weak growth expectations and high inflation has persisted and continues to support the strength of the US dollar,” says Mira Chandan, FX strategist at JP Morgan.

As a result, the investment bank raised its dollar forecast by an average of 1.5% over its forecast horizon. JP Morgan’s outlook for a strong dollar is dependent on the exceptional economic performance of the United States relative to the rest of the world, and the associated responsive rise in interest rates at the US Federal Reserve. Accordingly, Chandan says, “The backdrop for global growth and inflation remains fragile and supports the strength of the dollar.”

Chandan notes that global growth forecasts have been lowered in the past six weeks and inflation expectations have increased. “We are making major revisions to the outlook for the major US dollar pairs this month,” the analyst adds. This includes: EUR/USD As forecasts for the third quarter of 2022 have been lowered to 1.05 from 1.11 and the 2023 quarter has been reduced to 1.10 from 1.13. The bank’s forecast for GBP/USD for the third quarter of 2022 was lowered to 1.27 from 1.33 and the first quarter of 2023 fell to 1.31 from 1.34 previously.

Accordingly, analysts say the downgrade to Euro and Pound forecasts partly reflects the growing evidence of stagflation in the Eurozone and UK economies.

According to the pair’s technical analysis: GBP/USD may finally be ready to reverse its slide, as the price finds support at the 1.2400 area. The correction may lead to a rise in the Fibonacci retracement levels or the previous triangle support around 1.3000. The 38.2% Fibonacci level at 1.2680, then the 50% level at 1.2764. The biggest retracement could be 61.8% Fibonacci near the minor psychological mark of 1.2850 or the bottom of the broken triangle near the dynamic reversal points of the moving averages.

The 100 SMA is below the 200 SMA to indicate that the general trend is still down, and the selling is more likely to resume than reverse. The gap between the indicators is slowly widening to reflect increased selling pressure. Stochastic is rising above from an oversold area to indicate that buyers are taking over while tired sellers are taking a breather. Likewise, the RSI is moving upwards, so the price can follow suit as upward pressure increases and be able to enjoy both Oscillators with plenty of room to go up before reversing overbought conditions.

Today, with the most important event for the euro pairs in the forex market, where the European Central Bank will announce its monetary policy decisions. Despite expectations that the bank will keep interest rates unchanged, the general trend for global central banks, as we watch daily to raise interest rates, investors and analysts are counting on the Central Bank to change and point to the imminent date of tightening his policy.

This explains the upward trend of the EUR/USD currency pair since yesterday, stable around the 1.0892 level, and the most popular currency pair in the currency market crashed to the support level 1.0809 this week.

It must be emphasized that the Russian war has increased pressure on the single European currency, in addition to the consequences of the pandemic, and the exclusion of an imminent date for tightening the European Central’s policy. Economic institutes advising the German government cut their forecasts for Europe’s largest economy – Germany – and warned that a complete halt to Russian natural gas imports would lead to a “severe recession”. The five think tanks said in joint forecasts that German growth this year will slow to 2.7% before rebounding to 3.1% in 2023. The numbers compare with previous forecasts for growth of 4.8% and 1.9%. Inflation will average 6.1% in 2022 – the most in 40 years.

Commenting on this, Stefan Kothes, Vice President of the Kiel Institute for the World Economy, said: “The shock waves from the war in Ukraine are weighing on economic activity on the supply and demand sides.” the prices.”

The report warned that an immediate disruption to Russia’s energy supply could jeopardize 220 billion euros ($238 billion) of economic output in 2022 and 2023. “It would then be important to support marketable production structures without halting structural change,” Kothes added, urging makers to Policies not to provide “poorly targeted transfers to mitigate higher energy prices.”

Germany’s industry-heavy economy is facing major hurdles after the war in Ukraine sent energy prices soaring while disrupting supply chains that were already reeling from pandemic-related crises. Inflation hit 7.6% in the first full month of the war – the highest level since records began after reunification in the early 1990s. Companies are seen as particularly vulnerable because of Germany’s dependence on Russian gas, which the government wants to reduce. Last week, the ruling coalition approved an aid package for struggling companies that includes loans, loan guarantees and capital injections, aimed at helping energy companies in particular.

German industry leaders, including Christian Sewing, chief executive of Deutsche Bank AG, have warned of dire economic consequences if Russian energy supplies are cut off.

According to the technical analysis of the pair: The recent rebound attempt of the EUR/USD did not get the currency pair out of its bearish track, as it is still closer to testing the 1.0800 psychological support, which confirms the bears’ control of the trend. The currency pair’s path may change if it returns to the 1.1200 resistance area, according to the performance on the daily chart. As mentioned before, any attempts by the euro to recover to the highest selling opportunities will remain as long as the Russian war persists and as long as the divergence in economic performance and the future of central bank policy is in favor of the dollar.

Regarding the economic calendar data today: The European Central Bank will announce the update of its monetary policy decisions, and attention will be given to the event in the tone of its policy statement and the statements of ECB Governor Lagarde. On the US dollar front, we will be on a date with a package of the latest important economic data for this week, as the US retail sales numbers will be announced, along with the number of weekly jobless claims and US consumer confidence from Michigan.