Forex Signals Brief for Jul 6: COVID to Weigh on Markets
Rowan Crosby • 2 min read
US Market Wrap
US markets were closed on Friday for the Independence Day holiday, however, we still saw some selling pressure in Europe.
Currently, much of the attention is still on the rising number of COVID-19 cases and what that means for the broader economy and its bid to try and recover.
This means that in many countries, social distancing and lockdown measures will not only not be wound back, but they might also start increasing once again. This is bad news for sentiment, with many investors hoping that the worst was behind us.
Despite the rising number of cases in most US states, US president Trump is doing his best to keep the economy open and insists 99% of cases are harmless.
The Data Agenda
The week ahead looks like it is going to be light on, for economic data, which means the attention remains on COVID.
That said, the key data point this week will again be US jobless claims, which are really not dropping away as many would have hoped.
Today, the UK is in focus early with construction PMI, so the GBP/USD might see a response to that number.
Then when US traders return to their desks, the main data point of note will be ISM non-manufacturing PMI, which is expected to come in right on the 50.0 level.
It should be an interesting week ahead, with sentiment looking shaky and COVID making a fresh set of headlines.
Forex Signal Update
The FX Leaders Team finished with 9 wins from 19 signals last week as markets continued to consolidate.
EUR/GBP – Active Signal
The EUR/GBP has got strong support below at 0.9000 and we are long above that point looking for the bounce.
GBP/USD – Active Signal
The GBP/USD has been bouncing back over the past few sessions and we are long here looking for that momentum to continue.
BTC is starting to make a series of lower highs on the charts and we have now seen price test $9,000 three times.
Technically, this is weak price action and that $9,000 level is ripe for a break. That said, we know price is going to break out after this period of consolidation.