China is returning from the week of rest, and it will be interesting to see how this will affect FOREX market. For example, crypto market, which is no longer so active in recent months and almost got frozen last week, showed an activity gain with Chinese players return. This week, we will focus upon an important blocks of statistics from leading economies. We will analyze how trade risks have already affected economic data, US-China trade talks, and finally the dynamics of the US currency.
EUR / USD - the market has focused on the strategic zone 1.1280-1.1300
The decline in European currency continues. Last week, the bulls were broken and left in retreat important tactical points - local support levels 1340, 1325. Now the focus has shifted to strategic area 1.3000-1.1265. In this area there is the institutional demand located for European currency. A bit below this area, there is a mark 1.1215 that is located in close proximity. Lower Euro bulls have no strongholds, for the path to 1.1000 area will be open to the European currency. But this is only a distant prospect, although it no longer seems fantastic from a technical point of view. This week, buyers and sellers will fight for mentioned market area 1.1280-1.1300. The market is heavily oversold, and the pair retains good chances for a corrective pullback to the area of 1.1375-1.1395.
Trading recommendations- longs in the 1.1300 area
GBP / USD - the market forms the channel 1.2965-1.2900, the pressure on the pound remains
British currency is consolidating in a narrow range of 1.2905-1.2965. The new week begins with more USD dollar gains, and the pressure for GBP / USD is increasing. Tactical support is located close on the market area 1.2900. Stronger area of support a bit lower in the 1.2845 zone. Technically, GBP / USD shorts look interesting despite the overbought of the American dollar. At the same time, selling at current levels is somewhat dangerous, so wait for a rebound higher to 1.2945-1.2950
Trading recommendations - sales when markets adjust higher to 1.2965
Gold maintains a positive technical configuration
On Friday, buyers were able to close the trading week above the level of 1310, and this allowed them to setup the logistics, for now local support is located in the area of 1307-1308. But of course, the strategic line of defense remains the same - this is the area of the market 1300-1295. Any decline in this zone should be used to open longs.
Trading recommendations - longs in the area of 1295-1300
US dollar index
Technical overbought of the US dollar is increasing, but in terms of risk-off mode, the markets use USD dollar as a protective asset. The current fundamental situation can support the dollar for a very long time, and the dollar index can break through level of 96.60. This is another level of resistance for the market. Nevertheless, we maintain expectations of a sooner or later adjustment and a technical pullback of the dollar index.