Home Forex FX Play of the Day Recaps: July 17 – 20, 2023

FX Play of the Day Recaps: July 17 – 20, 2023

FX Play of the Day Recaps: July 17 – 20, 2023


It was a really busy week for the foreign exchange calendar, bringing each potential alternatives and challenges for our strategists this week.

It was arguably a web efficient sort of week as we had two out of 4 methods that have been in a position to be on the precise facet of robust short-term momentum strikes.

AUD/USD 2-Hour Forex Chart by TV

AUD/USD 2-Hour Foreign exchange Chart by TV

On Monday, we noticed one other dip within the Australian greenback to start out the week throughout the Asia session, this time doubtless a response to the weaker-than-expected GDP and retail gross sales information from China. This as soon as once more helps the outlook that financial circumstances are weakening in China, one of many greatest commerce companions with Australia.

We thought that volatility would keep elevated in AUD/USD with the most recent RBA assembly minutes, Australian employment and U.S. retail gross sales information up forward, and we mentioned varied bull and bear situations for the pair depending on these occasion outcomes. Effectively, our elevated volatility expectations got here to move because the heavy calendar prompted a number of strikes / course modifications this week.

First, the RBA assembly minutes confirmed that the Reserve Financial institution of Australia continues to be open to tightening in August, however didn’t appear to have a lot affect as AUD/USD traded decrease after the occasion. And we noticed strikes after the U.S. retail gross sales replace for June, which got here in beneath each expectations and the earlier month, probably prompting the bearish lean on the pair on rising recession worries.

It was the Australian jobs replace that introduced quick markets to AUD/USD Thursday, and boy was an attention-grabbing second as merchants really began shopping for forward of the information launch, then picked up the shopping for tempo after the information got here in better-than-expected.

However the bullish sentiment on AUD/USD didn’t final very lengthy as U.S. weekly jobless claims drew in U.S. greenback bulls throughout the Thursday U.S. buying and selling session.

It’s robust to say whether or not or not this was efficient or not given the quantity of after occasion changes in perspective that wanted to be made, however we predict if the concept was that alerts of Chinese language and U.S. financial weak spot rising was the bottom concept for a bearish bias, then this could arguably have been an efficient pair to commerce this week.

AUD/CAD 30-min Forex Chart by TV

AUD/CAD vs. Crude Oil Futures: 30-min Foreign exchange Chart by TV

On Tuesday, we identified a short-term descending channel on AUD/CAD, doubtless pushed by a mixture of weakening sentiment because of weak Chinese language information, and a few help for the Loonie from rising oil costs.

We noticed Canadian CPI updates forward to probably affect the Loonie, with expectations of displaying inflation circumstances easing additional, and if that’s the case, that would probably result in an upside break of the descending channel.

We additionally talked about that if Canadian CPI information shocked positively, then we thought AUD/CAD may transfer decrease with the present pattern to retest the 0.8950 minor psychological space, a situation that we have been leaning in direction of, primarily as a result of bearish momentum.

Canadian CPI information confirmed slowing on each a month-to-month and annual foundation, and we did see a bearish response momentarily within the Canadian greenback, however no upside channel break ever developed. And it didn’t take lengthy to draw Loonie patrons, correlating with the bullish flip in oil costs from the $74 deal with that started on Tuesday.

That was doubtless the primary driver for AUD/CAD’s broad transfer decrease this week, benefiting our bearish lean on the pair, and it was sufficient to attract in sellers once more after a short-term spike increased after the better-than-expected Australian employment replace on Thursday.

GBP/AUD 30-min Forex Chart by TV

GBP/AUD 30-min Foreign exchange Chart by TV

After the U.Ok. printed a weaker-than-expected CPI replace on Wednesday, we set our sights on GBP/AUD because the volatility took the pair to a serious help sample space on the 15-minute chart.

With Australia set to launch their employment updates throughout the Thursday Asia session, we noticed the percentages of volatility rising rapidly for GBP/AUD, and that the help sample famous would doubtless attract merchants to leap off from, with course relying on how the information performed out.

Typically, we leaned bullish on the pair because of market expectations of a weak Australian jobs replace, which was rapidly invalidated as Australia printed a stronger-than-expected replace. This drew in sellers comparatively rapidly and introduced the pair all the best way right down to the 1.8850 minor psychological degree earlier than the sell0ff exhausted.

No luck on Wednesday’s GBP/AUD value outlook for our bullish lean, however if you happen to have been in a position to rapidly adapt to the shock Australian jobs replace and go quick on the trendline break, that doubtless result in a constructive consequence for the short-term bears who threat managed properly.

GBP/CHF 30-min Forex Chart by TV

GBP/CHF 30-min Foreign exchange Chart by TV

On Thursday, we seemed forward to the upcoming U.Ok. retail gross sales occasion, probably leaning lengthy on Sterling on expectations the U.Ok. will give a constructive replace on client retail exercise.

With that fundie bias, we checked out GBP/CHF because it was forming a double backside on the 15-minute chart. This sample tends to attract in technical patrons, and if threat sentiment leaned constructive and/or U.Ok. retail gross sales did are available constructive, we thought {that a} transfer as much as retest the neckline and pivot level degree (1.1120) was a risk.

Not too lengthy after our submit, GBP/CHF shot increased throughout the U.S. buying and selling session, with out an obvious direct catalyst for the transfer. Sterling did broadly rally in opposition to the majors (minus the U.S. greenback), and after being beat up for many of the week, this will arguably be a case of repositioning (i.e., quick protecting) forward of the U.Ok. retail gross sales replace.

Regardless of the case could also be for the rally from the double backside, GBP/CHF simply reached our mentioned targets, first the “neckline” round 1.1100, then the Pivot Level line round 1.1120. It really had sufficient momentum to achieve the R1 pivot level space, marked on the chart in our unique dialogue.



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