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The Japanese yen has ticked lower in the Wednesday session. In the North American session, USD/JPY is trading at 112.77, down 0.10% on the day. On the release front, U.S housing numbers were softer than expected. Building Permits dropped to 1.27 million, shy of the estimate of 1.33 million. Housing Starts fell sharply to 1.17 million, down from 1.35 million. This was well below the estimate of 1.32 million. Later in the day, Federal Reserve Chair Jerome Powell testifies before the House Financial Services Committee. Japan will release trade balance, which is expected to rebound with a surplus of JPY 0.15 trillion. On Thursday, the U.S releases the Philly Fed Manufacturing Index and unemployment claims.

Fed Reserve Chair Jerome Powell reaffirmed his positive outlook on the U.S economy in testimony before the Senate Banking Committee. Powell said that he expected the labor market to remain tight and inflation to stay close to the Fed’s target of 2 percent for the next several years. Powell added that the Fed would continue to gradually raise interest rates. Lawmakers appeared satisfied with current monetary policy, but Powell did face some pointed questions regarding the escalating trade war, which has raised concerns that economy could take a downturn if the tariff battles continue.

The escalating global trade war has gripped the markets for weeks, but there was a welcome move in the other direction earlier this week. Japan and the EU signed a free trade agreement, which will eliminate most of the tariffs on trade between the two parties. At the signing ceremony, Prime Minister Shinzo Abe and European Council head Donald Tusk said that the deal is a response to growing concerns about protectionism. Although most tariffs between the two sides are low, the agreement will be beneficial for Japanese car makers and European food producers. No less important, the agreement marks the largest free trade agreement in the world, as the EU and Japan cover about one-third of global GDP and some 600 million people.

Get to know the trading virtues you need to develop for a successful trading career. Virtues are described as traits that revolve around moral excellence and positive characteristics. Commonly used for spiritual teachings, virtues are also great tools for traders to form the right attitude towards different trading scenarios. In the long run, having beneficial trading virtues can boost overall mental outlook and encourage optimism in all trading activities.

In a challenging market, acquiring the right foundation through quality forex education and good trading virtues will pave the way for a fulfilling trading journey. When faced with difficulties, traders can rely on virtues to guide decision making. For a rewarding career, learn how virtues can enhance your trades and inspire better trading habits.

Importance of personal virtues

Trading virtues are formed by actions and good habits that eventually become valuable for trading success. It is what drives behaviour and reactions towards different scenarios when forex trading. By using virtues to guide performance and decision making, traders can efficiently execute the calculated strategy and reach target goals.

Despite the analytical nature of the business, trading is a personal journey. In forex trading, some of the most common "vices" include impatience, greed and pessimism. To fight all these negative traits, traders must nurture positive trading virtues for success. Learn the importance of good personal virtues for a more productive and gratifying trading career:

• Sets the path for proactive and progress-driven trading environment
• Builds better mental fortitude that will eventually result in successful trading performance
• Develops inner confidence needed to take on challenges of the market
• Encourages better self-management on all aspects of growth and productivity
• Leads to further improvement of skill, strategy, technical know-how and other necessary abilities for trading

Top 5 most effective trading virtues for success

Forex trading has much to do with personal determination and initiative. Applying trading virtues to your strategy is a great way to better control mindset and build a stronger trading character for yourself. According to Virtues for Life, virtues are necessary traits that help develop potential and life purpose for overall well-being and happiness. For forex traders, having good virtues in a busy market can build the right foundation for decision making and outlook. In the long run, this can inspire self-confidence and mental wellbeing throughout every trading activity.

To reach a level of expertise, optimal performance and profitability, get to know the top 5 most effective trading virtues you can apply for successful trading:

Drive for discipline

Why is discipline important?

Discipline is an excellent virtue for forex trading. From preparation to execution, being a more disciplined trader can drive you towards success. It means being able to better control emotions, focus on the objective and manage efficiency to reach the desired output for the day. In the trial and error stages of trading, it is also what sets successful strategies from unreliable systems.

How to build more discipline

Speaking Tree shares that self-discipline is a virtue that helps you reach potential and develop personal excellence for long term goals. To build more discipline, you will need to practice and work hard to establish a more methodical mindset no matter what situation you are in.

With many aspects of your system to determine, applying discipline is a beneficial trait especially during back testing or carrying out a strategy. Discipline can also help traders consistently produce quality output and encourage optimal productivity during each trading session. To become a more disciplined trader, apply these effective practices to increase drive and self-discipline when trading:

1. Actively strengthen your behaviour and reaction towards any type of trading scenario.
2. View trading as a business and personal investment.
3. Improve and manage self-control for optimal efficiency during trading sessions.
4. Minimize carelessness by developing a more methodical way of thinking.
5. Always be aware of your level productivity to maintain discipline, quality and focus.

Constant accountability

Why is accountability important?

"In forex trading, it is easy to quickly blame market movement for unforeseen mishaps. Whether you end up with a winning or losing trade, it is important to know that you are in control of all your trading output." – Ways to achieve personal accountability

Accountability is an integral part of becoming a successful forex trader. It is about taking responsibility for the outcome of trades. Ultimately, being more accountable can greatly boost willingness to improve and learn from the challenges of the forex market.

How to become more accountable

Constant accountability builds better trading character. Whether you execute a winning or losing trade, being more accountable can allow traders to always strive for progress. By taking ownership of every activity and its consequences, you can accept each trading scenario and immediately take action for growth. Here are points to remember to increase personal accountability when trading:

1. Being more accountable can help traders avoid denial especially when the market turns.
2. Taking full responsibility of actions can challenge traders to make the right decisions for optimizing systems.
3. Accountability allows traders to easily move on and improve from recent trading losses.
4. Accountability also boosts trading character that ultimately builds good habits for success.
5. When traders take responsibility for all results of trading, they can minimize procrastination and focus on improvement instead.

Thriving patience

Why is patience important?

The virtue of being patient enhances both personal and work ethics. Along with discipline, patience is an essential trait during trading preparations, market analysis and the execution of your strategy. It enables traders to remain determined while minimizing frustration especially during difficulties. To strengthen your trading system and character, remember to be patient with your abilities as well as the forex market.

How to become more patient

Along with a well-calculated strategy, patience is key for success when trading. According to Planning a calculated strategy for trading, you must be willing to endure and take on the work that is required to succeed. By developing more patience, you can go through activities of forex trading with readiness and efficiency. Here the different ways you can encourage the virtue of patience:

1. Create a simple go-to plan for stress management.
2. Practice patience in both work and personal life.
3. During an overwhelming situation, find a good distraction for an immediate remedy.
4. Make use of meditation as a way to stay patient during a trading session.
5. Learn to look outside of any difficult scenario and see the overall picture of your efforts.

Commitment to excellence

Why is commitment important?

Commitment is an important virtue for trading because it builds a thought process that is focused on career goals and objectives. When maintained as a mindset, being committed lessens the possibility of complacency while increasing personal determination to succeed. Once traders develop commitment when trading, they can further increase inner drive and dedication.

How to stay committed

Commitment is a virtue that strengthens and grows in time. Being committed means being better at managing your reactions, expectations and output when trading. It also helps traders remain optimistic and avoid feeling discouraged during setbacks. Here are simple steps you can follow to stay committed to your trading goals:

1. Gather correct information and set healthy expectations from trading
2. Set up the right goals for your trading career.
3. Examine your current capabilities and take it from there.
4. Manage the timeline of your goals to get the overall picture of your progress.
5. Track your progress and use this as encouragement.
6. Practice the virtue of commitment most especially during trading losses.

Perseverance through positivity

Why is perseverance important?

When navigating the forex market, it is easy to become intimidated or disheartened by the demands of achieving profitable trades. Because of this, perseverance is one of the most beneficial virtues for a trader. It describes one's determination and grit towards accomplishing forex trading goals.

How to increase perseverance

Perseverance displays strength in character and dedication to succeed. It is an important trading virtue that can help in reaching target goals no matter how long it may take. To attain your desired level of expertise and target profit, find out what you can do to increase perseverance when trading:

1. Practice positive thinking to overcome any difficulties.
2. Also practice proactive thinking to encourage immediate action planning.
3. Never take shortcuts and go through the requirements of successful trading.
4. Gain confidence in yourself as well as your trading system.
5. Aim for proper work-life balance to maintain emotional perseverance for trading.

How to apply and practice good trading virtues

Cultivating the right virtues for trading requires practice and proactive thinking. To form the habits towards good trading virtues, traders must be aware of their attitude towards varied trading scenarios. When it comes to building character strengths and virtues, Positive Psychology Program shares that these are derived from traits that are consistently applied through time and in any situation. Here are the easy ways you can cultivate effective trading virtues for optimal trading:

• Point out which virtues are most important to you.
• Also specify which virtue is most needed for your trading strategy.
• Learn how you can strengthen personal virtues outside of the forex market.
• Manage all your trading activities and ensure these are done with your trading virtues.
• Take every opportunity to apply virtues and be open all experiences of trading.
• Practice and master your trading virtues through practice in a demo account.

Virtues for optimal trading mindset

Success comes from efforts put in every trading task as well as the virtues you apply for day-to-day experiences. To produce consistent results in forex trading, you will need to have a reliable strategy as your guide and helpful trading virtues to follow through. Despite being a technical and analytical endeavour, forex trading has much to do with personal excellence and mental wellness. It requires novice traders to strengthen attitude and outlook especially in challenging trades.

Virtues are great tools to not only drive success but also to inspire a fulfilling work-life. When trading forex, you will need to virtues to develop strong trading character and overcome any obstacle. Oftentimes, traders face temptation to stray from their strategy or when letting emotions overcome findings from data analysis. Because of this, forex traders need reliable trading virtues to regain focus and stay constructive during decision making.

By cultivating good trading virtues, traders can efficiently execute trading activities with a disciplined and confident mindset.

U.S. housing starts dropped precipitously in June, falling 12.3% m/m to 1.173 million units (annualized). This was the largest decline since November 2011 and much bigger than the consensus forecast for a 2.2% pullback.

The outturn for starts reflected declines in both the single and multifamily segments. Single family starts declined 9.1% (to 858k), while multi-family starts posted an even larger decline of 19.8% (to 315k), bringing it to its lowest level since August last year.

Building permits also pulled back, but by a smaller 2.2%, largely reflecting declines in multifamily permits (-7.6%) as single permits posted a moderate increase (0.8%).

Regionally, the downturn in starts was evident in all areas, with the Midwest the most pronounced – down 35.8% m/m and reversing a large portion of the gain (51.9%) posted last month. This was followed by declines in the South (-9.1%), the Northeast (-6.8%) and the West (-3%).

Key Implications

Housing starts are volatile on a monthly basis, but the size of the pullback in May is concerning. The details of the report did not offer much in the way of bright spots, as the decline took place across regions and segments.

The housing industry is facing headwinds on both the demand side – higher interest rates and rising prices – and the supply side – labor shortages and tariffs driving up material costs. One month does not a trend make, but this will remain an indicator to watch for signs that it is becoming entrenched.

Daily Pivots: (S1) 131.38; (P) 131.69; (R1) 131.93; More....

Intraday bias in EUR/JPY is turned neutral with today's deep pull back. As long as 129.90 minor support holds, further rise is still in favor. Above 131.97 will target 100% projection of 124.61 to 130.33 from 127.13 at 132.85 next. However, break of 129.90 will indicate short term reversal, with bearish divergence condition in 4 hour MACD, and turn bias back to the downside for 127.13 support.

In the bigger picture, the strong break of channel resistance from 137.49 suggests that the decline from there as completed. The three wave structure suggests that it's a correction. With 124.08 key resistance turned support intact, medium term bullishness is also retained. Break of 133.47 will affirm this bullish case and target 137.49 and above. This will now be the favored case as long as 127.13 support holds.

Markets

Core bonds traded with a marginal upward bias today with German Bunds outperforming US Treasuries. The story of the past few days remains valid. Traditional correlations with other markets are extremely lose. Core bonds show resilience despite a constructive risk sentiment on stock markets. Traded volumes are low. The eco/event calendar contained only second tier data and failed to leave a trace markets. German yield decline by 0.4 bps (2-yr) to 1.2 bps (10-yr). The US yield curve shifts less than 1 bp lower across the curve. 10-yr yield spread changes vs Germany widen somewhat with Italy (+4 bps) underperforming. Clearing house LCH’s increase of collateral requirement for Italian bonds ends the BTP rally of the past week.

Yesterday , the dollar succeeded a short-term reversal/comeback, supported by Fed Powell’s positive assessment on the US economy. The dollar only received marginal interest rate support as bonds reacted very muted to Powell’s assessment. Even so, the US currency remained will bid, also today. There was little eco news in EMU. If anything, a downward revision of the EMU June core CPI from 1.0% to 0.9% was maybe a marginal negative for the euro. That said, dollar strength prevailed. EUR/USD declined to the low 1.16 area but decline slowed going into the second part of Fed Powell’s hearing before the US Congress (currently 1.2630 area). USD/JPY traded temporarily above the 113 big figure but is currently changing hands in the 112.85 area as US equities are taking a breather. Later today, FX markets will keep an eye at the Q&A session of Powell’s hearing before the House. Later today, the Fed Beige Book will be published preparing the August 1 Fed meeting.

Today, the news flow remained sterling negative. This morning, selling pressure on sterling eased temporarily after UK PM May narrowly survived a vote on a key amendment to her Brexit Bill. However, the political hardball that preceded the vote only illustrated the difficult position the UK government (and the whole Brexit process) are currently undergoing. EUR/GBP traded in the 0.8875 area ahead of the publication of the UK June inflation data. The report also didn’t help sterling. UK headline inflation was stable at 2.4% Y/Y in June (2.6% was expected). Core inflation even eased to 1.9% from 2.1%. Markets still discount a probability of about 80% for an August BoE rate hike despite the softer EU data. However, after the August rate hike, sterling probably won’t enjoy the prospect of additional interest rate support for a very long time. Sterling came again under pressure. EUR/GBP settled north of the 0.89 big figure (currently 0.8915). Cable is again nearing the 1.30 barrier (currently mid 1.30).

News Headlines

While discussing lessons from the 2008 financial crisis with former treasury Secretaries Paulson and Geithner, former Fed-chairman Ben Bernanke said the current flattening of the US yield curve does not signal an impending recession. Instead, regulatory changes and quantitative easing are distorting market signals. During the discussion Paulson pointed to the growing US debt, saying it “is the most predictable financial crisis in the world”.

The EU imposed a record fine of €4.3bn on Google for, amongst others, imposing illegal conditions on Android device manufacturers “to ensure that traffic on Android devices goes to the Google search engine”. In 2017, Google was already charged €2.4bn for favouring its own site in comparison shopping searches.

Clearing house LCH said it will increase collateral requirements for trades in Italian government bonds due to the sharp rise in BTP volatility in recent months as investors fear Italy’s new government might imperil public finances.

EURUSD - The pair looks to extend its weakness as it continues to press lower. On the upside, resistance comes in at 1.1700 level with a cut through here opening the door for more upside towards the 1.1750 level. Further up, resistance lies at the 1.1800 level where a break will expose the 1.1850 level. Conversely, support lies at the 1.1600 level where a violation will aim at the 1.1550 level. A break of here will aim at the 1.1500 level. Below here will open the door for more weakness towards the 1.1450. All in all, EURUSD faces further downside pressure.

Daily Pivots: (S1) 147.44; (P) 148.27; (R1) 148.86; More...

GBP/JPY's break of 147.63 minor support suggests short term topping at 149.30, after failing to break 149.99 resistance. The development also argues that price action from 143.18 is a consolidation pattern that's completed. Intraday bias is turned to he downside for retesting 143.18.76 support zone first. On the upside, above 149.30 will bring turn bias to the upside for 149.99 resistance.

In the bigger picture, no change in the view that decline from 156.59 is a corrective move. In case of another fall, strong support should be seen above 139.29 cluster support (50% retracement of 122.36 to 156.59 at 139.47) to contain downside and bring rebound. Meanwhile, break of 153.84 should confirm that the correction is completed and target 156.59 and above to resume the medium term up trend.

Daily Pivots: (S1) 1.3130; (P) 1.3174; (R1) 1.3238; More...

USD/CAD's break of 1.3216 indicates resumption of rebound from 1.3063. Intraday bias is turned back to the upside for 1.3385 high first. Break there will resume whole rally from 1.2061 for 1.3685 fibonacci level. In case of another fall, we'd still expect strong support from 1.3067 resistance turned support to contain downside.

In the bigger picture, as long as channel support (now at 1.2870) holds, we'll holding to the bullish view. That is, fall from 1.4689 (2015 high) has completed at 1.2061, ahead of 50% retracement of 0.9406 (2011 low) to 1.4689 (2015 high) at 1.2048. Further rally should be seen for 61.8% retracement of 1.4689 to 1.2061 at 1.3685 and above. However, sustained break of the channel support will argue that rise from 1.2061 has completed and will bring deeper fall to 1.2526 support to confirm.

Daily Pivots: (S1) 112.42; (P) 112.68; (R1) 113.13; More...

Near term outlook in USD/JPY stays bullish with 112.21 support intact. Current rally from 104.62 should target 61.8% projection of 104.62 to 111.39 from 109.36 at 113.54 first. Break will put focus on 114.73 key resistance for confirming our bullish medium term view. On the downside, break of 112.21 support is needed to signal short term topping. Otherwise, outlook will remain bullish in case of retreat.

In the bigger picture, current development, with the solid break of medium term channel resistance from 118.65 (2016 high), affirm our view that corrective fall from there has completed with three waves down to 104.62. Decisive break of 114.73 resistance will likely resume whole rally from 98.97 (2016 low) to 100% projection of 98.97 to 118.65 from 104.62 at 124.30, which is reasonably close to 125.85 (2015 high). This will now be the preferred case as long as 119.36 support holds.

Daily Pivots: (S1) 0.9951; (P) 0.9977; (R1) 1.0026; More...

At this point, intraday bias stays mildly on the upside for 1.0067 resistance. Break there will resume the larger rise from 0.9186. USD/CHF should then target 61.8% projection of 0.9186 to 1.0056 from 0.9787 at 1.0325, which is close to 1.0342 key resistance. However, break of 0.9926 will dampen the bullish view again.

In the bigger picture, rise from 0.9186 is seen as a leg inside the long term range pattern. After drawing support from 55 day EMA, it's now resuming for 1.0342 key resistance. For now, we'd still cautious on strong resistance from there to limit upside. Meanwhile, break of 0.9787 support is needed to signal completion of the rise. Otherwise, outlook will remain bullish even in case of deep pull back.