Forex trends to watch out for in July :: InvestMacro


– Some signs of calm returned to the markets on Wednesday after the painful selling in the previous session.

European stocks rebounded despite the dovish mood while US futures fluctuated on fears of a global recession. In the currency markets, the strong dollar displayed its safe-haven strength ahead of the Federal Reserve’s meeting minutes while the euro extended its losses against the G10 currencies. Looking at commodities, gold remained lower and unpopular below $1,765 thanks to a stronger dollar. Brent found himself under renewed pressure, approaching the psychological $100 level.

With the start of the new trading month in July, this may present new opportunities in the FX markets. Today, we will be using Multiple Time Frame Analysis (MFTA). This is a method of analyzing the long-term, medium-term and short-term time frames to achieve an accurate entry or exit when trading the markets.

GBPUSD speculators turn to higher gear…

After rebounding within a very wide range since mid-2016, GBPUSD may prepare for a sharp sell-off below the 1.2040 support level.

Prices are still very bearish on the monthly time frame as there have been consistently lower lows and lower highs. Candles are trading below the 50, 100 and 200 month simple moving averages. A strong monthly close below 1.2040 may pave the way towards 1.1500.

On the weekly charts, we see a similar picture of bears in the driver’s seat. If GBPUSD concludes the week below 1.2100, it could lead to sharper selling towards 1.1800 and 1.1500 respectively.

Zooming in on the daily chart, we are constantly seeing lower troughs and lower troughs. The recent break below 1.1950 is an encouraging sign for the bears and opens the door for more downside as 1.1650 is the first point of interest.

If 1.1950 proves to be a reliable support, the currency pair may see a recovery towards 1.2200 and 1.2350 respectively.

EURUSD parity around the corner…?

We’ll keep this quick because we’ve already done it EURUSD covered this week.

The currency pair is nearly 200 pips away from parity at the time of writing. With the bears in full force and the trend strongly downward, parity could be around the corner in a matter of days to weeks. Speaking of technical indicators, a strong weekly close below 1.0200 may encourage selling towards 1.0000. If 1.0200 proves to be a reliable support, a return towards 1.0400 may be a possibility.

The Australian dollar against the US dollar is still in a downtrend

A picture can say 1000 words. Much has been said on the AUDUSD weekly time frame as prices found resistance around 0.6850. Continued weakness below this level could encourage a decline towards 0.6650.

NZDUSD Textbook Collapse Chance

If you are looking for a clear downtrend, check the NZDUSD on the weekly time frame. There have been lower lows and lower highs constantly while the MACD is trading below zero. A strong weekly close below 0.6200 may lead to selling towards 0.6000. If 0.6200 proves to be difficult to break, a rebound towards 0.6400 may occur.

GBPJPY bull run over?

Things are heating up for the GBPJPY on the weekly charts. After failing to break above 167.50, it looks like the bears are back in the country and ready to switch pressure. This looks like a bearish week for the currency pair as 158.00 acts as the first major interest level. Strong breakout and daily close below 158.00-higher low might trigger selling towards 151.00.

Reward: gold

It has been a painful week for gold so far with the precious metal trading at levels not seen since December 2021. The balance of power appears to be shifting in favor of the bears and this is still being reflected in the price action. $1,745 remains the first level of interest, followed by $1,700. For the bulls to jump back into the game, a bounce around $1800 would have to happen – which could be a very steep hill to climb.



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