Currency Analyst since 2010

Forex trading plan for July 1

The market’s risk sentiment will have to survive a test on Friday as China will release official manufacturing & nonmanufacturing PMIs (01:00 GMT). In addition, Caixin manufacturing PMI is due at 01:45 GMT. If the figures disappoint, traders will get another reminder of how uncertain the global economic outlook is. In this case Australian and New Zealand’s dollars will fall, while Japanese yen will strengthen. Good data will support riskier assets, though not by much. Also watch US ISM manufacturing PMI at 14:00 GMT. FOMC member Bullard will speak later on Thursday.

EUR/USD closed above 200-day MA on Wednesday, but, as we expected, the euro’s advance is difficult. Resistance is at 1.1150 ahead of big resistance is in the 1.1200/30 area (former support and now resistance line). Traders sell on the pair’s attempts to get higher. Decline below 1.1070 will open the way to 1.0970/50.

GBP/USD fell as the Bank of England’s Governor Mark Carney announced that the central bank may have to increase monetary stimulus over summer, though it won't be able to fully offset the negative effects of Brexit. The pound is vulnerable for a decline towards 1.3000. The UK manufacturing PMI is due at 08:30 GMT.  

USD/JPY made very little movement on Thursday. Japan will release inflation data as well as Tankan manufacturing and non-manufacturing figures early on Friday. Technical levels remain the same: resistance is at 102.85, 103.55 and 105.00. Support is at 102.15 and 100.75.

AUD/USD is limited by 0.7370 on the downside and 0.7470 on the upside. The pair’s awaiting Chinese statistics as well as Australian parliamentary election on Saturday. The news flow makes it not the best time to trade Aussie.  

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