Jul 07 2020 0
Important data will be released today so we look at the charts of the most common pairs to see what forex trading strategies to use.
- US non-manufacturing ISM data soared into the expansion zone, 57.1, far ahead of the forecast of only 50.0.
- The number of new infections continues to rise, both in the US and globally. Texas reported 8,076 new COVID-19 cases on Saturday, marking the first time the number of daily cases exceeded 8,000. Florida, meanwhile, reported 11,458 new cases that same day, also a record. Meanwhile, the WHO also recorded the highest number of cases on the weekend due to the continuous increase in South Asia and Latin America as well as the US, and warned that governments should not remove the blockade when infection rate exceeds 5%.
- The battle between expectations and reality is still ongoing, while economic data is showing prosperity, the epidemic situation is getting worse.
- Crude oil prices stabilized above $40 after Reuters reported that Saudi Arabia - the largest crude oil exporter in the world - raised the official selling price for all their crude oils to $1 starting from 1 August (compared to the average of Oman/Dubai), thereby reinforcing the belief that the physical oil market is approaching equilibrium.
- The Bank of Japan (BoJ) is expected to maintain its view of the economic recovery momentum until the end of the year, even if the second wave of infection threatens to recover.
The short-term uptrend structure was broken when the price set a new high and low. Considering on the daily chart, we also have a pinbar drop signal after the engulfing signal is down, so the possibility of the price continuing to go down is relatively high. The short-term target is zone 106.7. However, the current RR level is not very good. You should consider if you want to short.
The price broke the downtrend line of the triangle pattern, which suggests a possibility of further upward movement, but immediately after the breakout are two noticeable resistance areas including 1.135 and 1.142, which makes buying transactions potentially risky. The bullish force at the current zone is quite strong and the price has not shown a significant rejection in this area so we should not trade either. Maybe the opportunity will come in the next barrier. In short, we should ignore the current price zone and watch short positions when the price approaches the June highs if there is a bearish signal.
The sellers have been unable to maintain the pressure and the price is retesting the resistance level of 1.255. This is considered the final barrier of the sell side because if it is broken, a rising structure will form. You can keep holding the sell orders. Stop Loss should be above this price range. We will abandon the reduced view when the barrier is broken.
There is not much change on USD/CAD chart so we still keep the old view. Note the price action at the bottom of the range, because this zone acts as a trigger for short positions if it breaks down (a complete triangle pattern). In addition, short orders in the previous range should also escape because the force of decline to the bottom is increasingly weak.
AUDUSD is still moving uncomfortably along the medium-long-term uptrend line. Today there will be the RBA meeting, so the currency pair is likely to have greater volatility. I still keep the view waiting to sell at the peak of the previous month.