Trading plan for August 21
AUD: CB Leading Index, China's HSBC Flash Manufacturing PMI
EUR: French, German & euro area's Manufacturing & Services PMIs
GBP: Retail Sales
USD: Unemployment Claims, Existing Home Sales, Philly Fed Manufacturing Index, Jackson Hole Symposium
US dollar enjoyed solid demand ahead of the FOMC meeting minutes which area due later today (18:00 GMT). Many traders expect that the Fed will confirm improved growth outlook. Still, there’s a risk of “sell the fact reaction”.
EUR/USD has reached $1.3295 and is expected to continue to $1.3230. A divergence in oscillators started to be visible on the daily chart, so we can hope for some pullback up to add to shorts. Resistance is at $1.3330 and $1.3370.
GBP/USD shot up as the 2 members of the Bank of England’s monetary policy committee voted for the rate hike. Still, the 200-day MA at $1.6670 acted as initial resistance. The spike seen on H1 and H4 indicates that the bears are quite reluctant to let the pair get higher. Still, the pair’s oversold on the daily timeframe, but the 55-period MA ($1.6730) and the bearish Cloud on H4should continue acting as resistance and cap sterling on the upside.
USD/JPY has been pushing and pushing up on Wednesday and one look at the intraday chart is needed to show that the pair craves correction down to 103.00 at least (further support is at 102.70 and 102.45). Depending on the market’s sentiment the pair could then continue its ascent to 103.75 or get rejected to 102.00. The pair’s dynamics for tomorrow will very much depend on its ability to close above the 103.00 handle.
AUD/USD continued its decline from yesterday and reached our target at $0.9280. The RBA says that it expects AUD to decline, but at the same time it doesn’t plan to continue cutting rates. The daily candle with long upper and lower shadows shows that the market is indecisive. There are reasons to expect support at $0.9280 to hold making prices return to $0.9325. Resistance is at $0.9305. If $0.9280 is breached, we’ll see decline to $0.9260, $0.9240 and lower.