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    Afternoon Report – Wednesday 31st July

    THE DAILY REPORT

    AFTERNOON REPORT

    TOP THINGS TO KNOW

    With Fed sure to cut rates, Powell on hook to flag next steps

    (Reuters 31/07/2019) - The U.S. Federal Reserve is almost certain to cut interest rates for the first time in more than a decade on Wednesday, delivering a mild jolt to an economy that is facing headwinds from trade disputes and a global slowdown.

    The widely expected quarter-percentage-point lowering of borrowing costs, however, is unlikely to assuage U.S. President Donald Trump’s increasingly strident demands for the central bank to ease monetary policy.

    On Tuesday, Trump again called for a large interest rate cut. The Republican president has blamed the Fed under Chairman Jerome Powell for undercutting his administration’s efforts to boost economic growth.

    Fed officials hope a modest rate cut will lower the odds of a recession by helping to boost tame inflation at home and offset risks from slowing growth abroad and rising tensions with trading partners like China.

    The central bank is expected to leave the door open to further rate cuts should those risks fail to dissipate. The Fed is scheduled to release its rates decision at 2 p.m. EDT (1800 GMT) at the end of a two-day policy meeting.

    “How well the Fed communicates its guidance on potential actions to sustain the record-breaking U.S. economic expansion, and in the process stimulate inflation, will greatly determine how the markets react,” Sam Bullard, senior economist with Wells Fargo, wrote in a note to investors.

    EUR Futures: upside could be losing momentum

    (FXStreet 31/07/2019) - In light of flash data for EUR futures markets, open interest rose by just 682 contracts on Tuesday while volume clinched its third consecutive drop, this time by nearly 4.6K contracts, according to CME Group.

    EUR/USD faces potential consolidation

    The recovery in EUR/USD from fresh cyclical lows near 1.1100 the figure was on the back of rising open interest and a persistent drop in volume, putting the up move under pressure and allowing for some near term consolidation. That said, another leg lower to yearly lows stays well on the cards for the time being.Technically, June month bottom close to 0.6830 becomes nearby support to watch during the pair’s further declines while a pullback, considering the oversold condition of 14-day relative strength index (RSI), can recall early-month low surrounding 0.6910.

    Forex Today:Aussie rescued by Aus CPI, trade hopes; eyes on EZ GDP/CPI, Fed

    (FXStreet 31/07/2019) - Cautious optimism emerged the underlying theme in Asia on Fed Wednesday, as the US-China trade talks kicked-off in Shanghai while markets remained unnerved ahead of the first US Federal Reserve (Fed) rate cut in a decade. The Asian markets traded with moderate losses alongside the US Treasury yields. However, the US equity futures traded firmer that kept the USD/JPY pair supported at the 108.50 level.

    The AUD/USD pair staged a rebound from six-week lows of 0.6862 and tested the 0.69 handle on upbeat Australian CPI figures and trade deal hopes. The Kiwi, on the other hand, fell to 0.6590 levels on disappointing China manufacturing PMI reports. The official Chinese manufacturing PMI remained in contraction last month, reinforcing China slowdown concerns. Meanwhile, EUR/USD pair stuck to its recent trading range around the midpoint of the 1.11 handle ahead of key macro releases. The Cable made another recovery attempt on the 1.21 handle.

    Among the commodities, the safe-haven gold held onto the recent gains near 1430 levels, while, both crude benchmarks advanced on massive US API crude inventory draw and likely Fed rate cut.

    TRADE OPPORTUNITIES

    Below are Trading Central's Intraday preference recommendations. Short (SELL) positions and long (BUY) positions have two targets issued which may be used as take profit levels. Above or below a certain figure indicates the pivot level which may be used as a level for stop loss.

    USDCAD Daily – Short positions below 1.3220 with targets at 1.3010 & 1.2930

    This is general advice only and does not take into account your personal circumstances. “It is the Policy of ForexCT to recommend the use of stop/loss function to reduce risk of significant losses to customers.

    GBPJPY 30 Minute – Buy above 131.47, rebound towards 133.02.

    CRUDE OIL 30 Minute – Long positions above 57.23 with targets at 58.79 & 59.55.

    EURAUD 30 Minute – The downside prevails as long as 1.6230 is resistance.

    EURUSD Daily– Short positions below 1.1235 with targets at 1.1100 & 1.1000.

    NIKKEI Daily – Long positions above 20950 with targets at 22350 & 23000.

    DOW JONES Daily – Long positions above 26975 with targets at 27500 & 27920.

    This is general advice only and does not take into account your personal circumstances. “It is the Policy of ForexCT to recommend the use of stop/loss function to reduce risk of significant losses to customers.

    Economic Announcements
    (times in AEST)

    Risk Warning
    Trading FX and CFDs involves a substantial degree of risk and should only be undertaken with risk capital. Please consider our PDS and FSG before trading with us. A copy can be found on our website www.forexct.com.au. Forex Capital Trading Pty Ltd provides general advice that does not take into account your objectives, financial situation or needs. Investors do not own or have rights to underlying assets. Forex Capital Trading Pty Ltd is regulated by ASIC (AFSL 306400), ABN (69119086270). Forex Capital Trading Pty Ltd’s AFS license and Australian regulation only applies to the financial services being provided in Australia only.

    Posted: July 31, 2019 | 7:25 AM