Forex Signals Brief for July 23: Markets Can’t Shake Trade Wars
Rowan Crosby • 2 min read
The week ahead appears to be another one that will focus heavily on the ongoing trade wars. More headlines from US President Donald Trump last week, have continued to stir the pot between China and the US. However, it’s forex markets that are the ones that are looking a little nervous.
Late last week, Trump suggested that he could impose tariffs on the entire $500 billion of Chinese imports. He also had a crack at the FED for raising rates and causing the USD to appreciate. Which puts the US at a disadvantage in trade.
The Europeans, who have been slugged with tariffs on both steel and aluminium, will get a chance to plead their case as European Commission President Jean-Claude Juncker visits Washington. There is speculation the US is about to impose a tariff on European cars, so this will be an important meeting this week.
As a result of the trade wars, the USD has been struggling to break above resistance and will be playing catch up as the week gets underway. On Monday the major item on the agenda is US Existing Home Sales.
As the week goes on though, there will be plenty of attention on what ECB President Mario Draghi has to say on interest rates and when the first hike is likely to come. While on Friday, the big mover is going to be US GDP, where we are looking at a rate 4.1%, more than double the previous quarter. Markets are in for a busy week.
Forex Signal Update
The FX Leaders team managed to put together another solid week at the trading desk. The boys found 15 winning signals with only 7 losing positions. That’s a 68% strike rate which is well above expectations and a nice result for our followers.
Bitcoin – BTC has defied its critics and has rallied more than 30% off the most recent lows of $6,000. The bulls are in control in the short-term as we eye a move back to $8,000.
Nikkei – The Japanese Nikkei pulled back towards the end of the week as the 23,000 level continues to provide a headache for the bulls.
EUR/GBP – Active Signal
The EUR/GBP has broken out of its period of consolidation and spiked higher. We entered on the pullback as we expect there to be more upside ahead.
The GBP, in particular, had a rough week last week as we saw some weak data points, really putting the pound under pressure. If that momentum can continue then we are looking good here.
Bitcoin – Pending Signal
Bitcoin has come back from the dead in the last week or two. After tagging $6,000 we have been trading upward of $7,500, in a sign that there is still buying interest around.
Clearly, the next major upside level will be $8,000 and after the short and sharp spike that initially launched BTC though both $6,800 and $7,000, price has been relatively subdued. As the volatility compresses, we are getting ready for a big breakout here.