Source: PaxForex Premium Analytics Portal, Fundamental Insight
US Initial Jobless Claims for the week of July 16th are predicted at 240K, and US Continuing Claims for the week of July 16th are predicted at 1,340K. Forex traders can compare this to US Initial Jobless Claims for the week of July 9th, reported at 244K, and to US Continuing Claims for the week of July 2nd, reported at 1,331K.
The Philadelphia Fed Manufacturing Index for July is predicted at -2.5. Forex traders can compare this to the Philadelphia Fed Manufacturing Index for June, reported at -3.3. Traders should focus on the CAPEX, Prices Paid, New Orders, and Employment sub-components.
The US Leading Index for June is predicted to decrease 0.5% monthly. Forex traders can compare this to the US Leading Index for May, which dropped 0.4% monthly.
US Natural Gas Inventories for the week ending July 15th are predicted at 47B cubic feet. Traders can compare this to US Natural Gas Inventories for the week ending July 8th, reported at 58B cubic feet.
The South African Reserve Bank is expected to raise interest rates by 50 basis points from 4.75% to 5.25%. Forex traders can compare this to the previous South African Reserve Bank meeting, where it raised interest rates by 50 basis points from 4.25% to 4.75%, preceded by three 25 basis point increases.
After the Bank of Japan maintained negative interest rates this morning, in a move widely expected by markets, the focus is on the European Central Bank. While markets expect a 25 basis point hike to 0.25%, the ECB could surprise with a 50 basis point hike. The Indonesian central bank may keep interest rates unchanged at 3.50%, but traders should remain patient after Singapore and Malaysia surprised markets with off-cycle monetary tightening. The ECB remains the biggest market driver today. It could end negative interest rates if it decides to hike the deposit facility rate by 50 basis points, accompanying the 25 basis point increase in interest rates.
The forecast for the USD/ZAR turned bearish after this currency pair moved into its horizontal resistance area, and the Kijun-sen paused its advance. Volatility is likely to increase due to the ascending Tenkan-sen and the Ichimoku Kinko Hyo Cloud, which maintains a narrow formation while moving higher, vulnerable to a bearish crossover. Traders should monitor the CCI after it has formed a negative divergence in extreme overbought territory, followed by a breakdown below 100. It has enough momentum to contract below zero, from where more selling is likely. Can bears strengthen their grip on price action and pressure the USD/ZAR into its horizontal support area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the USD/ZAR remain inside the or breakdown below the 16.0950 to 17.3000 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 17.0750
- Take Profit Zone: 16.0490 – 16.3145
- Stop Loss Level: 17.5000
Should price action for the USD/ZAR breakout above 17.3000, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 17.5000
- Take Profit Zone: 18.1000 – 18.2500
- Stop Loss Level: 17.3000
Open your PaxForex Trading Account now and add this currency pair to your forex portfolio.
