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Trading ideas for EUR/USD, GBP/USD, XAU/USD

July 08, 2022

EUR/USD: The euro hit a fresh two-decade low against the dollar as investors grappled with the risks of a recession and a potential pause in interest rate. Worries about economic growth and soaring inflation continued to dominate the global market mood. But on Thursday market sentiment improved as major policymakers repeated previous comments while trying to tame the recession fears. Also keeping the market hopeful were headlines concerning China and mixed data, mostly down from the Eurozone and Germany. To sum up, the recent pause in the risk-off mood isn’t a sign of improvement and fails to help the EUR/USD prices ahead of the US jobs report for June. Forecasts suggest the headline US Nonfarm Payrolls is expected to post the smallest monthly increase in jobs since April last year. Also of importance will be the speech from ECB President Christine Lagarde where traders will be more interested in hearing about July rate hikes.

SELL LIMIT 1.0230/TP 1.0130/SL 1.0280


GBP/USD: GBP/USD reverses early Asian session gains while taking offers to renew the intraday low. The cable pair’s latest pullback could be linked to the US dollar’s rebound amid the fresh blow to the risk appetite, as well as the market’s cautious mood ahead of the US employment report for June. In addition to the USD pullback, the GBP/USD pair buyers also cheered the UK PM Boris Johnson’s resignation from the post of the UK Conservative Party Leader, after multiple political quits and a strong push from the cabinet. However, the search for a successor and a naïve cabinet, with multiple new appointments, keep the risk-on mood challenged. Hence, the GBP/USD traders should pay attention to UK politics for immediate directions. However, US employment numbers for June and recession headlines will be more important to watch for fresh impetus.

SELL STOP 1.1985/TP 1.1910/SL 1.2015


XAU/USD: Gold Price cheers the US dollar pullback from a nearly two-decade high. US Dollar Index drops while portraying the market’s preparations for today’s US jobs report. Also weighing on the greenback’s gauge versus the six major currencies is the improvement in the risk profile amid repeated comments from the major central bankers and efforts to tame recession fears, not to forget headlines concerning China. Federal Reserve Governor Christopher Waller said inflation is way too high and does not seem to be easing and the Fed has to apply a more restrictive policy. On other hand, US President Joe Biden is up for a meeting with his senior advisors on Friday to determine the tariff policy on China. Previously, diplomats from the US and China signaled a personal meeting after the latest virtual trade talks witnessed progress. Moving on, updates from Biden’s meeting on China tariffs and the US June employment data to drive short-term Gold moves.

BUY LIMIT 1731.20/TP 1765.40/SL 1711.30