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August 5, 2020

Top Forex Pairs To Watch This Week- Fundamentals

Frank Cabibi
EURShort bias
USDLong bias
GBPShort bias
AUDNeutral bias
CADShort bias
JPYShort bias
NZDShort bias
CHFLong bias
US30Short bias
MetalsLong bias

EUR/USD

EURUSD
US30

USD PMI news came out better than expected, but dollar continues to get pounded by demand for the euro. Analysts expecting a correction coming soon after the pair gained the most it's ever done in the last decade. Correlation with US market and EU pair is fairly similar.

GBP/USD

England expects some extended aid from the government as schools will soon be open again. US Congress is still struggling to negotiate a relief deal between the Republicans and Democrats. Bank of England will have a conference tomorrow discussing monetary policy and economic outlook for the country. Analysts expect high volatility during this time which could help pick a direction for the pair.

USD/CAD

According to Baystreet, investors are starting to sell stocks and buy the USD as a safe haven trade. Although the dollar index (DXY) is falling, sentiment on the USD is starting to turn around. Stocks are seeing major buying pressure since open, but analysts are getting worried for another correction. On top of that, oil demand decreased further in July, but CAD rally continues. And analysts expect some sort of bounce on the pair.

AUD/CHF

Yesterday, Aussie had big news on keeping their cash rate the same which seemed to hurt the pair as a false breakout occurred on the 4H chart. Thursday will bring AUD monetary policy report which will discuss forward looking statements and economic outlook. Swiss news came out on PMI data which proved worse than expected at 49. Under 50 is a sign of economic contraction. So the news on AUD tomorrow could show us the direction the pair wants to move this week and next. We're still feeling neutral about the pair as we wait for a direction to be decided.

NZD/JPY

Unemployment rate goes down on New Zealand Dollar this month and employment change q/q was very little. China impacts this pair considerably as they act as one of their biggest trading partners. Tensions between US and China and the Chinese economy itself can also affect trade price. RBNZ announced that it will ease monetary policy which could be painful to the NZD economy, sending the pair downward. We are holding short biases on both currencies but recent news could turn prices lower.

US30

The US expected there to be 1.4 million jobs added in July, but a mere 167,000 were added to payrolls. Warren Buffett's famous indicator that has historically been a precursor to crashes spiked again as most of Buffett's capital sits dormant. Delays on the new stimulus bill are causing concern amongst most Americans because unemployment is still very high. However, this earnings season has brought some strong numbers as well as mixed ones. The fact that the market is getting bought up looks like big money is gearing for a sell off, or a take-profit point. Although corrections are inevitable in the stock market, it's difficult to say when.

XAU/USD

Gold breaks out to reach an all-time-high over 2000. one analysts compared the surge in price to the bitcoin boom in 2017. Gold truly does seem to be the bitcoin of the older generation, but buyer's euphoria never lasts forever. We have been long term bulls on gold for some time, but this move was too great and too fast. We were hoping to see a nice pullback to the 3-year high at 1917, but price never reached that level. After gold broke out of the 4H resistance, it's now showing signs of weakness in the short term. New support at 1980s.


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Please note that this email is my personal opinion only. I am not a licensed financial advisor, and any information shared or discussed is not to be construed as investment advice. Trading and investing involves a degree of risk, and is not suitable to all investors. Please consult with your financial advisor before making any sort of investment decisions.

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