Kickstart the trading day with a technical look at the EURUSD, USDJPY and GBPUSD: Bias, Risk and Targets
The US dollar is mixed as North American traders enter for the day. The greenback is trading higher against the EUR, GBP, CHF, CAD and NZD, while moving lower against the JPY and AUD.
The largest moves are against the NZD and CHF. The NZDUSD is down -0.35% (higher USD), while the USDCHF is up +0.34% (also higher USD). The AUD is the strongest of the major currencies vs the greenback, with the AUDUSD rising +0.29%. The changes against the EUR, GBP and JPY remain relatively modest.
The low-to-high trading ranges are mostly contained:
- EURUSD: 16 pips
- USDJPY: 37 pips
- GBPUSD: 33 pips
- USDCHF: 34 pips
- USDCAD: 42 pips
- AUDUSD: 58 pips
- NZDUSD: 35 pips
In today’s Kickstart video, I take a technical look at the EURUSD, USDJPY and GBPUSD. For each pair, I outline the technical bias, the risk-defining levels and the targets that traders should be aware of as the new trading day unfolds.
Markets remain focused on Middle East developments. Iran and Oman are reportedly advancing discussions over a temporary commercial shipping corridor through the Strait of Hormuz, including mine-clearing operations. However, there is no broader US-Iran peace agreement, with negotiations over a permanent settlement still stalled. The reports nevertheless raised hopes for improved oil flows and reduced the immediate risk of another military escalation.
Looking at the pre-market levels for the US stocks, the indices are mixed with the:
- Dow +19 points
- S&P -6.25 points
- Nasdaq -68 points
Nvidia reports fiscal Q2 earnings after today’s close, with results expected around 4:20 PM ET and the call at 5:00 PM ET.
- Revenue guidance: $91.0 billion, plus or minus 2%
- Revenue estimate: $92.27 billion
- EPS estimate: $2.09
- Year-ago revenue/EPS: $46.74 billion/$1.05
The headline numbers will matter, but the bigger focus will be on Q3 guidance, gross margins, Blackwell Ultra execution and China. With expectations already high, simply beating Q2 estimates may not be enough—the company must convince investors that its rapid growth can continue.
Overnight, ECB Executive Board member Isabel Schnabel reinforced the central bank’s hawkish stance, warning that policymakers must act early to prevent persistent price pressures from feeding into wages and broader inflation. She expects inflation to remain above the ECB’s 2% target for an extended period and emphasized the need to keep inflation expectations firmly anchored.
Schnabel also pointed to improving Eurozone growth and elevated natural gas prices—up more than 130% this year—as risks that could keep inflation higher for longer. She said the extent of policy tightening will ultimately depend on incoming economic data.
Her comments follow reports from ECB sources yesterday indicating that the central bank is likely to raise rates at its September meeting. Markets are currently pricing around 40 basis points of tightening by year-end and roughly a 95% probability of a September rate increase. Schnabel is among the ECB’s more hawkish policymakers, but her remarks add further weight to expectations that a September hike is coming.
In the UK, the CBI retail survey showed conditions deteriorated sharply in August, with the retail sales balance falling to -48 from -26. Retailers reported weak demand, worsening sentiment, and continued reductions in investment and staffing plans. Sales are expected to remain under pressure in September, although the pace of decline is forecast to moderate.
In Switzerland, the UBS Investor Sentiment Index rose to +12.1 in August from +10.0 in July, marking a second consecutive month in positive territory. The improvement signals growing optimism about the Swiss economic and financial-market outlook despite the US-Iran conflict and elevated oil prices. The report is unlikely to alter the SNB’s policy outlook, with rates expected to remain unchanged for an extended period.
On the economic calendar, it is a heavy North American session, with most of the key US data scheduled for 8:30 AM ET:
- Personal income: +0.2% estimate versus +0.2% prior
- Personal consumption expenditures: +0.1% estimate versus +0.3% prior
- Core PCE month over month: +0.2% estimate versus +0.1% prior
- Core PCE year over year: +3.3% estimate versus +3.3% prior
- Headline PCE month over month: +0.1% estimate versus -0.1% prior
- Headline PCE year over year: +3.6% estimate versus +3.7% prior
- Durable goods orders: +0.5% estimate versus +0.3% prior
- Durable goods excluding transportation: +0.6% estimate versus +0.6% prior
- Nondefense capital goods excluding aircraft: +0.9% estimate versus +0.9% prior
The second estimate of second-quarter GDP will also be released:
- GDP: +1.5% estimate, unchanged from the preliminary estimate, versus +1.6% in the first quarter
- GDP sales: +2.2% estimate, unchanged from the preliminary estimate, versus +1.5% previously
- Consumer spending: preliminary estimate of +3.2% versus +1.4% previously quarter
- GDP price index: +6.2% estimate versus the preliminary estimate of +6.3% and +3.5% previously
- Core PCE prices: +3.4% estimate, unchanged from the preliminary estimate, versus +4.4% previously
- Headline PCE prices: +5.1% estimate, unchanged from the preliminary estimate, versus +4.5% previously
- Corporate profits: preliminary estimate of +0.5% versus -0.4% previously
At 10:30 AM ET, the weekly EIA inventory data will be released:
- Crude oil inventories: +597,000 barrels expected versus +4.405 million previously
- Distillate inventories: -1.570 million expected versus -1.530 million previously
- Gasoline inventories: -670,000 expected versus +688,000 previously
Richmond Fed President Thomas Barkin is also scheduled to speak at 11:45 AM ET, followed by SNB policymaker Antoine Martin at 12:15 PM ET.
This article was written by Greg Michalowski at investinglive.com.