FX Strategy 07 Jul 18 

AUD and SEK are the top G10 FX gainers today up 0.58% and 0.44% while JPY is the top loser down -0.04% vs the dollar. The risk sentiments are improving with the strength seen in Chinese yuan and EUR (reaching 4-week high). The investors are looking past trade conflict and are focusing on decent upbeat economic data (German Exports were a beat). Elsewhere, Brexit secretary resigned in opposition to Theresa May’s plan for a softer Brexit. GBP is rallying because the market now expects a sifter Brexit. In the equities space, the Asian markets have strengthened with Nikkei 225 ending the day +1.21% higher at 22,052, Kospi finishing +0.57% higher at 2,285 and Hang Seng closing +1.32% at 28,688. The European equity indices have also opened on a positive note, with the FTSE up 0.18%, DAX up +0.11%, and CAC up +0.44% so far. In the rates market, global yields are trading firm for the day with the US 10-year yield trading at 2.85% (up 2bp) and the Bund 10-year yield trading at 0.315% (up 2bp). In the energy space, the Brent front month is trading firm for the day at $77.61 having bounced from near our suggested support at $76.20 on Friday; resistance comes in at $78.30. there is no tier one release during the US session but we will hear from ECB’s President Draghi at 1400 GMT. Looking ahead, US CPI, Chinese trade balance, and BoC rates decision will be key events this week.


10-Year Yields Daily chart (6-month)



USD-Index Daily chart (2-month)



Brent Front Month Daily chart (2-month)



Trade weighted basket Hourly (one-week)




Major Currency Pairs


EURUSD Chart (Two-week)



Strategy: Support at 1.1732 for 1.1807
Short-term view: EUR/USD has support at 1.1732, bear channel top is breached and moving averages are rising. Hence, there are chances of a rise to 1.1807. Below 1.1732 to open 1.1796.



GBPUSD Chart (Two-week)



Strategy: at 1.3296 for 1.3398
Short-term view: GBP/USD has broken a bear channel and Moving averages have turned up. Hence, we see a rise to 1.3398. A break below 1.3296 to open 1.3258.



USDJPY Chart (Two-week)



Strategy: Resistance at 110.75 for 109.92
Short-term view: USD/JPY completed a bearish engulfing pattern, momentum is weakening and resistance lies at 110.75. Hence, we see a dip to 109.92. A break above 110.75 to open 110.97.



AUDUSD Chart (Two-week)



Strategy: Resistance at .7494 for .7417
Short-term view: AUD/USD has resistance at .7494 and MACD is overbought. Hence we see a dip to .7417. Above .7494 to open .7517.



BTCUSD 4-Hour Chart (Two-month)



(Chart by Reuters)


Strategy: Support at $6364 for $7266
Short-term view: BTC/USD support comes in around 6364 and bear channel top is breached and MACD is primarily bullish hence, we are looking for a further upside to 7266. Below 6364 is likely to open a test of 5964.



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