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The euro is trading in a tight range against the US dollar after the price was strongly rejected from the 1.1770 resistance area during the European trading session. Traders are now focusing on a break of the 1.1720 to 1.1770 price range, with EURUSD bulls still retaining the upper hand in the short-term while price trades above the 1.1730 support level.

The EURUSD pair is only intraday bullish while trading above the 1.1730 level, key resistance remains at the 1.1770 and 1.1812 levels.

If the EURUSD pair moves below the 1.1730 level, key support is then found at 1.1700 and 1.1650 levels.

Notes/Observations

• European Indices tradeshigher, with Italian stocks leading following press reports regarding a compromise budget deficit of 1.9%
• Swedish PM Lofven ousted in no-confidence vote

Asia:

• China Commerce Ministry official said the government is considering zero tariffs on some products
• BoJ minutes revealed that most members said appropriate to continue easing 'persistently'

Europe:

• Reportedly Italy ruling coalition willing to keep deficit/GDP below 2% following on from earlier reports the Government heading for compromise deficit of 1.9%
• Earlier Italy Dep PM Di Maio backtracked on statement suggesting Italy have a 2.8% deficit target
• Swedish Social Democrat leader Stefan Lofven was ousted (204 of 349 voted against PM)
• ECB Chief economist Praet downplays tone of Draghi's speech on Monday, noting that there was nothing new in speech and right for market reaction to have reverted
• French September business confidence comes in ahead of forecasts while Manufacturing confidence lags; own-company production outlook indicator fell much further than forecasts

Economic Data:

• (FR) FRANCE SEPT BUSINESS CONFIDENCE: 106 V 105E; MANUFACTURING CONFIDENCE:107 V 109E
• (PL) Poland Aug Unemployment Rate: 5.8% v 5.9%e
• (AT) Austria Q2 Final GDP Q/Q: 0.3% v 0.5% prelim; Y/Y: 2.7% v 2.3% prelim
• (SE) Sweden Aug PPI M/M: 0.0% v 0.9% prior; Y/Y: 9.3% v 8.4% prior
• (AT) Austria July Industrial Production M/M: -0.1% v -0.4% prior; Y/Y: 4.8% v 6.7% prior
• (ES) Spain Aug PPI M/M:0.5% v 0.4% prior; Y/Y: 5.2% v 4.6% prior
• (DE) Germany Aug Wholesale Price Index M/M: 0.3% v 0.1% prior; Y/Y: 3.8% v 3.6% prior

Fixed Income Issuance:

• *(IT) ITALY DEBT AGENCY (TESORO) SELLS €1.75B VS. €1.25-1.75B INDICATED RANGE IN MAR 2020 CTZ; AVG YIELD: 0.715% V 1.277% PRIOR; BID-TO-COVER: 2.10X V 1.87X PRIOR
• (IT) Italy Debt Agency (Tesoro) sells €1B vs €0.75-1.0B indicated in I/L 2032 Bonds (BTPei):Avg Yield: 1.65% v 0.76% prior; Bid-to-cover: 1.72x v 1.93x prior
• (CH) Switzerland sells CHF360.8M in 3-month Bills; Yield: -0.841% v -0.853% prior

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx50 +0.3% at 3,419, FTSE +0.3% at 7,482, DAX +0.2% at 12,373, CAC-40 +0.2% at 5,486, IBEX-35 +0.4% at 9,550, FTSE MIB +0.5% at 21,450, SMI +0.3% at 8,972, S&P 500 Futures +0.1%]
• Market Focal Points/Key Themes: European indices open higher across the board and remained positive as the session progressed; UK and Italy better performers on Brexit and budget outlook, respectively; crude prices support energy stocks; consumer discretionary among the underperformers; Israel closed for holiday; CMC Markets issues profit warning, dragging on retail trading stocks; Next Group raises outlook, supporting UK supermarkets; earnings expected in the upcoming US session include Jabil and Manchester United

Equities

• Consumer discretionary: Card Factory CARD.UK -1.9% (results), Intertrust INTER.NL -2.9% (placement), Low & Bonar LWB.UK -25.0% (outlook), Next NXT.UK +7.9% (raises outlook)
• Consumer staples: Imperial Brands IMB.UK +0.5% (trading update)
• Energy: Amerisur Resources AMER.UK -14.6% (operational update)
• Financials: CMC Markets CMCX.UK -12.0% (profit warning)
• Healthcare: Argenx ARGX.BE +4.7% (analyst action)
• Industrials: Evonik EVK.DE +0.9% (placement), Leonardo LDO.IT +3.1% (order)
• Materials: Glencore GLEN.UK +2.4% (increases buyback program)
• Technology: Fugro FUR.NL -2.0% (New CEO), WANdisco WAND.UK -11.1% (results)

Speakers

• (EU) ECB's Praet (Belgium, chief economist): Pickup of growth, prices need further accommodation; there was noting new in Draghi speech on Monday, right for market reaction have reverted after speech - at streamed FT Event in London
• (IT) Reportedly Italy ruling coalition willing to keep deficit/GBP below 2% - press
• (JP) Japan BOJ Gov Kuroda: Reiterates will take longer than expected to meet price goal - Text of speech in Osaka
• (FR) France Fin Min Le Maire: EU states not backing digital tax lack courage; EU must decide now on Digil tax
• (PL) Poland's Central Banker Lon: Polish rates should stay steady throughout MOC's term
• (JP) Japan BOJ Gov Kuroda: Revion of frward guidance is possible; If guidance changes, will depend on conditions at the time
• (DE) Germany BDI Industry Body Kempf: US/China trade dispute not having major effects on German companies yet, but is causing enormous uncertainty
• Opec Sec Gen: Oil will have predominant role in the Energy mix in the foreseeable future
• (UK) Opposition Labour Party Brexit motion: 'No deal' should be rejected as viable option, calls on Labour lawmakers to 'vigorously' oppose any attempt by the government to deliver no deal outcome
• (UK) German Chancellor Merkel: UK Exit deal possible in October or Novemeber; Not clear exactly what Britain wants

Currencies

• EURUSD softened slightly after comments from ECB's Praet noting that comments from Draghi yesterday were nothing new. The pair fell 30 pips to a low of 1.7133 following the comments before fading the move.

Fixed Income

• Bund Futures trades at 158.10 down 19 ticks on optimism for Italy. Resistance moves to 161.82 then 163. A downside break of 158.25 sees 157.69 initially.
• Gilt futures trades at 120.45 down 19 ticks following the move in Treasuries. Continued support at 120.50, with a continued move higher targeting 123.93 then 124.00.
• Tuesday 's liquidity report showed Monday's excess liquidity rose from €1.861T to €1.850T. Use of the marginal lending facility stayed rose from €21M to €563M.
• Corporate issuance saw 3 high grade issuers raise $4.1B in the primary market

Looking Ahead

• 05.30 (UK) Weekly John Lewis LFL sales data
• 07:00 (BR) Brazil Central Bank (BCB) COPOM Minutes
• 07:00 (BR) Brazil Sept FGV Construction Costs M/M: 0.2%e v 0.3% prior
• 07:30 (CL) Chile Central Bank Traders Survey
• 07:45 (US) Weekly Goldman Economist Chain Store Sales
• 08:05 (UK) Baltic Dry Bulk Index
• 08:55 (US) Weekly Redbook Sales
• 09:00 (EU) Weekly ECB Forex Reserves: € v € prior
• 09:00 (US) July S&P/ Case-Shiller 20-City M/M: 0.10%e v 0.11% prior; Y/Y: 6.20%e v 6.31% prior; House Price Index (HPI): No est v 213.07 prior
• 09:00 (US) July S&P Case-Shiller (overall) HPI Y/Y: No est v 6.24% prior, Overall HPI Index: No est v 204.48 prior
• 09:00 (US) July FHFA House Price Index M/M: 0.3%e v 0.2% prior
• 09:00 (MX) Mexico July IGAE Economic Activity (monthly GDP) Y/Y: 2.6%e v 1.2% prior
• 10:00 (US) Sept Consumer Confidence: 132.0e v 133.4 prior
• 10:00 (US) Sept Richmond Fed Manufacturing Index: 20e v 24 prior
• 16:30 (US) Weekly API Oil Inventories

The European Single Currency appreciated 0.20% against the US Dollar since Monday's session. The rate retraced back to the 1.1767 mark during Tuesday morning hours.

In regards to the near-term future, most likely, the rate will move upwards to the monthly R1 at the 1.1792 mark but could bounce off the resistance level to move back to the weekly PP at the 1.1724. The 55-hour and 100-hour SMAs will support the rate during the day.

On the other hand, the rate might break the monthly R1 resistance to trade in the 1.1800 level near the upper boundary of the ascending trend-line.

The British pound appreciated 0.40% against the US Dollar since Monday's session. The rate was moving sideways during the previous session to allocate the rate at the 1.3131 mark during Tuesday morning hours.

In the near-term future, most likely, the rate will break the weekly PP at the 1.3144 mark and the 50.00% Fibo to trade at the 1.3160 level. The 200-hour simple moving average should support the rate to push it through the mentioned technical indicators during the trading session on Tuesday.

On the other side, the simple moving averages could resist the rate to push it downwards to trade at the 1.3050 level.

The US Dollar appreciated 0.38% against the Japanese Yen since Monday's session. During Tuesday morning hours, the currency pair was located at 112.94 mark.

In regards to the near future, most likely, the rate will surge upwards to the weekly R1 at the 113.10 mark. The 55-hour and the 100-hour simple moving averages are trying to catch up the rate to give additional support to the rate on Tuesday.

On the other side, the fundamental news may affect the rate to move to any side, which may break today's predictions for the currency exchange pair.

The gold price appreciated 0.33% since Monday's trading session. On Tuesday morning, the yellow metal was located at 1200.00 mark.

In regards to the near-term future, most likely, the rate will move downwards to the monthly pivot point at the 1,195.60 mark due to the resistance of the simple moving averages. The rate will trade at the 1,196.00 level during Tuesday's trading session.

On the other hand, the rate might break the resistance of the simple moving averages and the lower boundary of the medium ascending line to trade in the previously drawn pattern at the 1,204.00 level.

Brent oil maintains firm tone on Tuesday and hit new four-year high at $82.18, in extension of strong rally on Monday.

Strong bullish sentiment is boosted by fears on impact from looming US sanctions against Iran as well as OPEC’s unwillingness to increase production and support oil markets which may face the shortage in oil supply, once Iran is out.

OPEC also ignored US President Trump’s request to lower oil prices by increasing output, keeping oil prices well supported.

Fresh bullish signal was generated on today’s rally through important resistance at $81.84 (Fibo 61.8% of $115.68/$27.09, 2014/2016 fall), with daily close above needed to confirm signal and open way for further advance.

Oil is maintaining strong bullish momentum, with daily MA’s in full bullish configuration, supporting the advance.

On the other side, slow stochastic broke into overbought territory and daily RSI turned sideways at overbought zone border, suggesting bulls may take a breather, before resuming.

Former strong barrier at $80 zone now acts as support and should keep the downside protected.

Fibonacci projections at $82.84 (200% of the upleg from $77.36) and $83.89 (Fibo 238.2%) mark next targets, however, bulls may accelerate further in unobstructed positive environment.

Focus turns on release of US API crude stocks report later today and EIA US crude inventories on Wednesday, for fresh signals, as the latest report showed US oil Inventories at record lows and further boosted oil prices.

Res: 82.19, 82.84, 83.00, 83.89
Sup: 81.84, 81.16, 80.48, 80.10

Copper price eased to $2.7880 on Tuesday after double upside rejection at $2.8695/55, where bullish acceleration was capped by falling 100SMA.

Copper was boosted by fading fears about an escalation of trade conflict between US and China but came under pressure on revived concerns about trade war, which could affect demand for the metal.

Along with weakening fundamentals, technical studies start to generate negative signals, as slow stochastic turned south and created bear-cross, attempting to reverse from overbought territory while 14-d momentum is reversing from highs.

Copper price is holding in the middle of thick daily cloud, with a plenty of space for corrective action towards strong supports at $2.7616 (Fibo 38.2% of $2.5870/$2.8695 upleg) and 2.7280/40 (converged daily Tenkan-sen / Kijun-sen / 50% retracement, which should contain extended dips to keep bulls off higher base at $2.58 zone alive.

Strong bullish signal could be expected on close above Fibo barrier at $2.8425 (Fibo 38.2% of $3.3140/$2.5510) and 100SMA ($2.8736) which would open way for further recovery.

Res: 2.8305, 2.8425, 2.8695, 2.8736
Sup: 2.8028, 2.7880, 2.7616, 2.7280

The USDCHF currency pair has formed a resistance cluster just below the important pivot point cluster. The descending trend line with the zig zag pattern indicates that the trend is still bearish. Today we have a CB Consumer Confidence release, which might provide another cue where the price will be heading next.

CB Consumer confidence (The Conference Board) measures the level of a composite index based on surveyed households. It is a leading indicator of consumer spending, which accounts for a majority of overall economic activity. Don't forget to check our Forex calendar for all the updates on the news, economic announcements, forecasts, and more!

Technically, the USD/CHF has formed an important resistance as we stated above. The POC zone lies just above, within 0.9660-70. However we can also spot a bullish SHS pattern that might still spike the price to the upside. That is why the zone is important. Rejections should target 0.9606, while the spike above aims for 0.9760. At this point we might see some rejections, but it looks like the US rate hike that is expected tomorrow is fully priced into the markets.

Be aware of the POC zone and bear in mind that this USD rally might spike above the POC zone tomorrow, as the move doesn't look speculative. Traders might also want to focus on confluence of the Admiral pivot points. Confluence is spotted when both weekly and daily pivots are close to each other.

Pivot Lines - Weekly Support and Resistance

POC - POC - Point Of Confluence (The zone where we expect the price to react - aka the entry zone)

Intra-day trading is a set of Forex day trading strategies that demand opening and closing trades on the same day. Considering that markets can only move so far within one day, intra-day traders use relatively riskier trading techniques to accumulate their desired profits. Day trading Forex strategies are more action packed and require traders to be present at the trading station throughout the session.

It's widely accepted that the narrower a time frame a trader works within, the more risk they are likely to be exposed to. That's why Forex day trading can be described as one of the riskiest approaches to the currency markets.

It's not really the different Forex trading strategies that day traders have to use that increases the risk. In fact, the overall logic is the same for almost any interval out there. Rather, it is that Forex day trading rules are more harsh and unforgiving to those who don't follow them. Mistakes are more costly and they have the potential to occur more frequently, since the act of trading itself is of a higher frequency.

Learn to trade step-by-step with our brand new educational course, Forex 101, featuring key insights from professional industry experts.

Strategies

The two factors that no intra-day trader can do without – irrelevant of the Forex day trading strategy he intends to use – are volatility and liquidity. It might seem like a good thing for any kind of a trader, but short-term traders are far more dependent on them.

Volatility is the magnitude of market movements. When trading short-term, solid volatility is a must. This basically reduces the selection of instruments to the major currency pairs and a few cross pairs, depending on the sessions. Speaking of sessions, since volatility is session dependant, knowing when to trade is as important as knowing what to trade.

Liquidity is equally important. Intra-day trading is very precise. A long-term trader can afford to throw in 10 pips here and cut 10 pips there. A short-term trader can't, because 10 pips could be the whole profit projected for a trade.

This precision in Forex comes from the trader's skill of course, but rich liquidity is important too. If there is no liquidity, the orders will simply not close at the desired price, no matter how good the trader is. This once again limits intra-day traders to a particular set of trading instruments and trading times.

Here are the most popular day trading strategies in Forex.

Scalping

This is a day trading Forex strategy that aims to make many small profits on the minimal price changes. Scalpers really go for quantity trades, opening almost 'on a hunch' because there is no other way to navigate through the market noise.

Scalping can be exciting and at the same time very risky. Scalpers must achieve high trading probability to balance out the low risk to reward ratio. Probably the hardest part of scalping is closing losing trades in time. A scalper simply can't afford to wait for the market to come back.

If you are looking to become a scalper, consider developing a sixth market sense – look for volatile instruments, good liquidity, and perfect execution speed. If mastered, scalping is potentially the most profitable strategy in any financial market. It is only the adjacent risks that prevent it from being the best Forex day trading strategy.

Reverse trading

This is arguably the worst trading strategy in the world, especially when used by unskilled traders. Reverse trading is also known as pull back trading, counter trend trading and fading.

The risk comes from the basic principle of trading against the trend. A reverse trader has to be able to identify potential pullbacks with a high probability, as well as to be able to predict their strength. Although not impossible, it does require a lot of market knowledge and practice.

'Daily Pivots' strategy can be considered a special case of reverse trading strategy, as it specialises in trading the daily low and daily high pullbacks/reverse.

Momentum trading

This is a pretty simple day trading Forex strategy that specialises in looking for strong price moves paired with high volumes and trading in the direction of the move. A high level of human discipline is required in momentum trading to be able to wait for the best opportunity to enter a position, and solid control to keep focus and spot the exit signal.

Day trading is often advertised as the quickest way to make a return on your investment in Forex trading. However, what the the adverts fail to mention is that it's the most difficult strategy to master. As a result, many beginner traders try and fail.

Through years of learning and gaining experience, a professional trader may develop a personal strategy for Forex day trading.

Forex day trading tips

The practice of day trading is the least popular among professional traders and the most popular among rookie traders.

If you are a rookie, here is the most important Forex day trading tip of all: stay away from day trading altogether. First try to prove yourself consistently profitable on a live account for at least a year, using long-term trading strategies. The more experienced you become, the lower the time frames you will be able to trade successfully. If however, you still decide or even unconsciously slip into day trading, here are a few Forex day trading tips that might help you out.

Day trading for beginners usually starts with research. They look out for different ways to improve their trading and dedicate a vast amount of time to search for the Holy Grail. The Holy Grail in Forex is what traders call a perfect indicator or a trading system that provides setups with a 100% success rate. Even some experienced traders do it from time to time. Unfortunately, perfect systems don't exist, and the only real Holy Grail is proper money management.

The best day trading software for beginners is clearly MT4 platform as it offers trading with micro-lots.

1. Open a demo account using MT4 day trading platform.
2. Choose one of our strategies shown in webinars.
3. Trade that system on a demo account until you are consistently profitable.
4. Trade the demo account exactly like you would trade live account.
5. The habits you develop in the demo should subconsciously carry over into your live trading.

Develop a strict trading plan and follow it strictly to manage your risks properly. As mentioned above, day trading Forex is riskier than long-term trading, mostly because of the higher pace and frequency of trades. Day traders experience more pressure and have to be able to make decisions quickly and accept full responsibility for the results. A trading plan is an absolute must for a day trader.

Keep an eye out for averaging down. Simply put, averaging down is keeping a losing trade open for too long. To avoid it, cut losing trades in accordance with pre-planned exit strategies. Remember, averaging down when day trading Forex eats up not only your profits but also your trading time.

What about a stop-loss? There are two kinds a day trader must consider using.

A physical stop-loss order placed at price level in accordance with the risk tolerance, which you should know from your trading plan. Approximately 1-2% is a good level. Basically, this is the most you can afford to lose in one trade. The other kind is a mental stop-loss – and this one is enforced by the trader when they get the feeling that something is going wrong.

Have you ever entered a trade and watched the market make an unexpected turn and then suddenly realised that the trade is no good and it's time cash out? That's a mental stop. The trick is not confusing it with just panic. That's why both physical and mental stops need to be thought through before entering a trade and not after.

Retail day traders, specifically those who manage their own rather than somebody else's money, have another rule their stop-losses must comply to. They set a maximum loss per day that they can withstand financially and mentally. If that point is ever reached they remove themselves from the market for the day altogether. They know that no good comes from emotional trading. Inexperienced traders, in contrast, don't know when to get out. They often feel compelled to make up losses before the day is over, which leads to 'revenge trading', which never ends well for them.

Exceptions to all these rules are possible, but must be managed with specific care and the results must be accepted with full responsibility. Good results must not serve to reinforce regular exceptions. Bad results should be considered as a good reminder as to why these rules exist.

The trend might be able to sustain itself longer than you can stay liquid. Let's consider volatility spikes mixed in with drops in liquidity.

When news releases are due, traders should refrain from trading altogether, unless these are the specific market conditions that their trading strategy requires. Do not trade around the major news releases as the results could be disastrous.

The bottom line is this – even if you somehow manage to know what the news will be, there is no way to predict how the market is going to react in the first couple of hours. Bullish news can cause a bearish market jerk and vice versa. Eventually, the market will return to its trend, but until it does, the environment isn't safe enough to trade.

Also keep in mind that a trader might not be able to protect his account with stop orders around the news. If there is no liquidity on the market, the order won't close. It will continue sleeping until the first available counterparty is willing to trade. So basically, it is only at their price that you will trade. However, the best day trading strategy in Forex is always to trade at your price.