Home Forex FX Play of the Day Recaps: July 24 – 27, 2023

FX Play of the Day Recaps: July 24 – 27, 2023

FX Play of the Day Recaps: July 24 – 27, 2023


In a troublesome week full of main, main catalysts and elevated uncertainty, our FX strategists have been in a position to arguably have two concepts play out successfully by the week shut. Take a more in-depth take a look at what occurred and why merchants needed to keep on their toes this week!

EUR/JPY 2-Hour Forex Chart by TV

EUR/JPY 2-Hour Foreign exchange Chart by TV

On Monday, we took a take a look at EUR/JPY forward of potential volatility for the euro with the upcoming enterprise survey updates from Europe. Market expectations have been for slight enhancements over final month’s numbers that would attract potential euro bulls.

However we thought {that a} pullback decrease could be within the playing cards first. The pair was testing and discovering resistance on the prime of a rising channel, a sample that would attract longs to take earnings or contemporary shorts from short-term technical merchants.

If a pullback performed out, we appeared out for the Fibonacci retracement space / rising shifting averages (across the 156.21 degree) to doubtlessly pull in technical merchants seeking to play the uptrend at higher costs. If that space held and drew in sufficient patrons again to the uptrend on constructive Euro space PMI knowledge, that will solidify our bullish bias.

Sadly for our bullish technical bias, Euro space sentiment knowledge continued their detrimental tendencies, after which the ECB hit the markets with an openness to carry off on rate of interest hikes of their September assembly (one of many eventualities mentioned in our ECB Assertion Occasion Information).

These occasions drew in regular euro promoting via the Thursday U.S. session, forward of large yen  volatility from the Financial institution of Japan financial coverage assertion.

Once more, our bullish bias was invalidated from the get go as Euro sentiment knowledge disillusioned relative to expectations, however should you have been in a position to adapt to that new data and danger handle correctly, there’s a excessive probability of a constructive end result from the pair this week.

AUD/USD 2-Hour Forex Chart by TV

AUD/USD 2-Hour Foreign exchange Chart by TV

Forward of Australian CPI knowledge for Q2 2023, we checked out AUD/USD, which was steadily trending decrease on the 1-hour chart. Expectations have been for Australian CPI to come back in under the earlier learn, doubtlessly drawing in internet sellers who might worth in decrease odds of future tightening from the Reserve Financial institution of Australia.

On the time, AUD/USD was within the means of bouncing greater, testing the SMA and Fib space, however we thought there might be additional bounce to go, citing the confluence of many technical arguments, together with the 50% – 61% Fib space with falling ‘highs’ sample, the 200 SMA, and R1 Pivot space (round 0.6810) as the subsequent technical space to look at.

AUD/USD did fall as Australian client inflation charges ticked decrease as soon as once more, however AUD/USD discovered a bid on Wednesday after the FOMC occasion didn’t spark bullishness for the Dollar. The pair truly was in a position to rally as much as the mentioned technical space, which ended up holding off the bulls and draw the bears in through the Thursday and Friday classes, possible helped by the sturdy spherical of U.S. financial updates highlighted on the chart above.

This was arguably a internet constructive end result, and primarily based on the way it was danger managed, possible a robust return-on-risk situation if that late week dump was captured.

EUR/NZD 2-Hour Forex Chart by TV

EUR/NZD 2-Hour Foreign exchange Chart by TV

We have been anticipating fireworks with the upcoming ECB financial coverage assertion, and to precise that possible burst of volatility, we noticed a number of technical arguments on EUR/NZD to look at.

There have been a slew of technical arguments that would attract internet patrons to the budding uptrend, most notably a confluence of Fibonacci retest, S1 Pivot space, and bullish divergence between worth and stochastic between 1.7700 – 1.7800.

Other than the technical image, we did contact upon the ECB occasion, and the way it might be a internet bearish one for the euro primarily based on our Occasion Information dialogue. That situation would possible negate our technical lengthy bias, so we have been positively retaining shut tabs on the occasion.

On Thursday, the ECB hiked rates of interest by 25 bps as anticipated, and gave euro bears one thing to work with as they acknowledged their openness to carry off on one other hike in September, together with mountaineering as soon as once more.

EUR/NZD spiked decrease with the remainder of the euro pairs as anticipated with that sort of information, however unexpectedly, the bulls have been in a position to maintain the 61% Fibonacci / main psychological degree of 1.7700. And never solely did they maintain, however they took the pair greater to interrupt intraweek swing highs and check the 1.7900 degree.

It was a wild and uneven experience for the pair, and regardless of a bearish ECB occasion for the euro, it seems to be like we’ll get a internet constructive end result relative to our authentic dialogue.

AUD/USD 2-Hour Forex Chart by TV

AUD/USD 2-Hour Foreign exchange Chart by TV

On Thursday, we revisited AUD/USD forward of a slew of U.S. financial updates, most notably the U.S. Superior GDP learn for Q2 2023 and the weekly U.S. preliminary jobless claims replace.  Market expectations for this knowledge was to indicate weak point relative to Q1 2023, so a possible bearish catalyst for the Dollar if that performed out.

From a technical evaluation standpoint, we made arguments for each the bulls and the bears, however primarily based on expectations of weak U.S. knowledge forward and the narrative of potential China stimulus coming to probably attract comdolls bulls, there was a slight bullish bias to our dialogue.

As talked about in our earlier AUD/USD dialogue above, the U.S. hit merchants with a robust spherical of financial updates, prompting a giant bull run for the Dollar through the Thursday U.S. buying and selling session. This shock in financial knowledge invalidated our slight bullish lean, and may have prompted a take a look at our bearish technical setup, which was a sustained transfer below 0.6770 as potential draw of extra AUD/USD sellers.

Total, this technique was very depending on the U.S. knowledge end result, and should you have been in a position to watch and react with a good danger administration plan to that occasion situation, the percentages of an excellent end result have been possible in your favor.

This content material is strictly for informational functions solely and doesn’t represent as funding recommendation. Buying and selling any monetary market entails danger. Please learn our Danger Disclosure to be sure to perceive the dangers concerned.



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