ForexInfoBook presents the weekly Forex technical analysis of GOLD,(XAUUSD), EURUSD and GBPUSD for 22 July-2 August 2019. Key data releases may provide direction to US Dollar. This could make Gold price reach its top and bottom trading ranges. EURUSD trading opportunity is seen with ECB Monetary Policy statement and Interest Rate decision. The Brexit uncertainty continues to make GBP trading relatively risky, however with a possible bottom formation provides a trading opportunity.
GOLD Technical Analysis
Our previous Gold technical analysis indicated price to further consolidate in the range 1400 to 1420. Price reached 1400 level and revered as expected providing aggressive traders a profitable long opportunity. Gold broke out on the back of dovish FED driving up the July rate cut expectation of 50 BP. Gold price broke 1440 level to make a high at 1453 and retraced back below the major resistance zone 1434-3439. Pull back was seen late on Friday after FED statements signaled only the already priced in 25 BP.
During this week, price action will focus on US GDP and IMF reports which may show weakness in global economy. Risk-aversion could strengthen US Dollar and Japanese Yen. GOLD may remain inside the ranges defined by 1400 and 1439. GOLD has priced in a 25 BP rate cut and move higher may need further dovish signals from FED. Escalations in political tensions in middle east could see retest of recent high at 1453. Break above 1440 on 50 BP rate cut would take Gold to 50% fib level at 1484 level.
GOLD (XAUUSD) Recommendation for this week:
Long GOLD @ 1405 (after a H1 reversal bar) with Stop-loss below 1395 for Targets 1430.
Short GOLD @ 1435 (after a H1 reversal bar) with Stop loss above 1445 for Targets 1400 and 1385.
Avoid Short trades in case price move is in reaction to FED dovish statements signaling further easing
Weekly EURUSD Technical Analysis
EURUSD price has been contained within 1.1200 to 1.1280 range over past three weeks. This week’s ECB Monetary Statement and Interest Rate decision may provide a break from the range. We expect retest of strong support at 1.1100 or the resistance at 1.1400 level. US GDP and IMF report could provide for two way trading opportunity. However, Long EURUSD provides better risk:reward setups and is recommended for this week.
EURUSD Recommendation for this week:
Buy EURUSD @ 1.1110 (after a H1 reversal bar) with Stop-loss below 1.0080 for Targets 1.1280
Avoid Long trade in case 1.1100 is being tested before ECB risk event. Break below is possible if 25 BP rate cut is seen. In the case of 10 BP rate cut or no rate cut, EURUSD could move up above 1.1200 level again. US GDP data on Friday will provide further direction. Weaker US GDP could see risk aversion leading to EURUSD retesting 1.1100. Better than expected US GDP data could improve sentiment to take EURUSD back above 1.1300-1.1400 range.
Weekly GBPUSD Technical Analysis
The extreme level of Brexit uncertainty and UK Parliamentary grid-lock makes it highly risky. GBPUSD has built up large speculative shorts over past few weeks. Any positive Brexit development would bring in a short squeeze since GBP has been long ignoring its decent economic data.
The long term trend, Brexit/UK Political scenario encourage short positions, but the risk:reward does not warrant shorts at these levels. If 1.2400 is broken decisively on back of further negative developments, shorts can be considered.
Since the Support at 1.2430 was broken only briefly, 1.2400 level could provide a potential level for bottom formation. Aggressive traders could consider long positions on reversal from 1.2400 level for targets of 1.2600 to 1.2700. Our recommendation is watch for Brexit developments that could provide better trading opportunities rather than trading technical levels. Weekly Forex technical analysis always works better when combined with a little bit of fundamental analysis.