Trade ideas thread – European session 30 July 2021

Daily thread to exchange ideas and to share your thoughts

The dollar is finding some footing on the week today as the market leans more towards being risk-off as equities retreat alongside Treasury yields.

Amazon earnings disappointed somewhat and that is weighing on tech sentiment, not helped by the renewed selloff in China as well. The Hang Seng is down 2.4% while the Shanghai Composite is down 1.0% as we look to get into European trading.

Nasdaq futures are slumping hard by 1.4% while S&P 500 futures are down 0.8%. The general mood in equities is softer with Dow futures also down 0.4%.

That sets up a more defensive posture as we look towards the session ahead.

For now, EUR/USD is seeing gains limited closer to 1.1900 with cable also seeing a somewhat similar cap closer to 1.4000. Meanwhile, USD/JPY did drop below its 100-day moving average yesterday but there is support seen around 109.00-20 for now.

That said, on the latter, bond market sentiment will still play a key role in dictating price action and with yields looking sluggish, it may be tough to gather much upside traction – not least with the yen also a beneficiary of a more risk-off mood.

It’s looking to be a more sluggish and mixed end to the trading week, after having seen the dollar beaten up going into the Fed and after for the most part.

Month-end trading conditions won”t help traders get much clarity so we’ll only get a better sense of what the market may be focusing on next week.

What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.


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