Open Account Trading Carries Risk

EURUSD has been in a free-fall lately as traders see Europe as a potential epicentre for a recession and as the ECB cannot easily hike the rates. The third-biggest bond market in Europe, Italy, wouldn’t survive if it had to pay market rates for its financing. The market is however deeply oversold which could create upside volatility should any reasons for dollar weakness emerge. In this report, I provide you with updates on some of the markets we’ve followed lately and also give you key price levels for trading the EURUSD and USOIL for the NFP volatility. Plus, we have a speech from ECB President Lagarde too on the schedule for today. By reading further, you agree with our disclaimer at the end of this report and acknowledge that we do not provide investment advice.

In today’s report, I provide you with trade ideas, analysis and key technical levels on

  • GBPUSD 
  • USOIL 
  • NZDCHF
  • CADCHF

Get live updates on my analyses and trade ideas here: https://t.me/TIOmarkets_Announcements

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USOIL 1h chart 07 08

USOIL – I suggested yesterday that the nearest resistance levels at 101.14 and 103.08 could come into play and here we are. The market rallied to 101.14 and quite started to attract sellers but not yet decisively. The fact is that the market is now facing a significant sideways formation which could make it challenging for the bulls to keep advancing. The key price levels for intraday trading today are 93.08, 96.50, 99.29, 101.86 and 105.56.

EURUSD 2h chart 07 08

EURUSD keeps on drifting lower as traders see Europe as a potential epicenter for a recession and as the ECB cannot easily hike the rates. The third-biggest bond market in Europe, Italy, wouldn’t survive if it had to pay market rates for its financing. The market is however deeply oversold which could create upside volatility should any reasons for dollar weakness emerge. Here are the key levels for trading the NFP today: 1.0071, 1.0144, 1.0191 and the 1.0220 – 1.0235 range.

NZDCHF 4h chart 07 08

NZDCHF is still trying to push higher towards my T2 level at 0.6046. The latest key support level is at 0.5984 and the market stays bullish as long as it trades above the 0.5946 support. Below this level it probably moves back down to 0.5920 or so.

CADCHF 8h chart 07 08

CADCHF has broken out of the bottoming formation now. I said that a decisive break could take the market all the way up to 0.7626 but let’s have another target also. My T1 is at 0.7562 while the 0.7626 is my T2. Alternative scenario: The market breaks below back inside the bottoming formation and drifts down to 0.7420.

Macro Drivers for the USD 

As the most followed, invested and traded markets for risky assets are priced in the USD it is helpful to understand what macroeconomic factors impact the other side of the equation, the USD. Whether we are trading EURUSD, XAUUSD or US equity CFDs the factors impacting the dollar, the nominator in the equation, have a significant role in the formation of all medium to long-term price action. The following table summarises the most important fundamentals.

The Federal ReserveFed hiked by 0.75% in June and indicated that there will steady rate hikes until the end of the year. 
StimulusThe Fed is looking to scale down its bond-buying program (QE) but has signalled that it be careful with tightening due to the war in Europe. 
YieldsThe US 10-year treasury yield has been rising strongly over the last two weeks as investors sell their bond holdings. 
EmploymentThe May non-farm payrolls increased by 390K (436K previous) while the participation rate was confirmed at 62.3% (62.2% previous). The unemployment rate remained unchanged at 3.6%. 
InflationThe US annual inflation growth for May accelerated to 8.6%. This was the highest reading since 1981.  Analyst consensus had expected the yearly rate to be 8.3%. The prices for energy (+34.6%) and food (+10.1%) made record increases. For food, this was the first increase of 10% or more since March 1981. 

Open a VIP Black account now at www.TIOmarkets.com. We want you to be able to exploit trading opportunities in financial markets with 0 commission and tight spreads. Take advantage of the best trading account in the industry: Tiomarkets VIP Black. For more details on this truly exceptional offering see here.

 The Next Main Risk Events

  • EUR ECB President Lagarde Speaks
  • CAD Employment Change
  • CAD Unemployment Rate
  • USD Average Hourly Earnings m/m
  • USD Non-Farm Employment Change
  • USD Unemployment Rate

For more information and details see the TIOmarkets economic calendar here.

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Trade Safe!

Janne Muta
Chief Market Analyst

TIOmarkets.com

Open a VIP Black account now at www.TIOmarkets.com. We want you to be able to exploit trading opportunities in financial markets with 0 commission and tight spreads. Take advantage of the best trading account in the industry: Tiomarkets VIP Black. For more details on this truly exceptional offering see here. For more analysis and commentary, visit our YouTube channel where you can find market commentary videos to support your learning and growth as a trader.

DISCLAIMER TIOmarkets offers exclusively consultancy-free service. The views expressed in this blog are our opinions only and made available purely for educational and marketing purposes and do NOT constitute advice or investment recommendation (and should not be considered as such) and do not in any way constitute an invitation to acquire any financial instrument or product. TIOmarkets and its affiliates and consultants are not liable for any damages that may be caused by individual comments or statements by TIOmarkets analysis and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his/her investment decisions. The analyzes and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with any legal requirements for financial analysis and must, therefore, be viewed by the reader as marketing information. TIOmarkets prohibits duplication or publication without explicit approval. FX and CFDs are leveraged products. They are not suitable for every investor, as they carry a high risk of losing your capital. Please ensure you fully understand the risks involved. All the prices in this report are CFD prices based on price charts provided by TIOmarkets unless otherwise stated. 

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