Trading plan for August 22
Key market drivers for August 22 (Friday):
ALL: Jackson Hole Symposium (Day 2)
CAD: Retail Sales, CPI (12:30 GMT)
USD: Fed Chair Yellen Speaks (14:00 GMT)
EUR: ECB President Draghi Speaks (18:30 GMT)
All eyes tomorrow will be focused on the central bank’s symposium in Jackson Hole. Janet Yellen is scheduled to speak at 14:00 GMT, while Mario Draghi will take the stage at 18:30 GMT.
EUR/USD fell to the levels around $1.3240 before correcting a bit up, to $1.3275 and consolidating below this level. Yesterday the pair closed below the support of the descending wedge which used to be in place since April. The oversold pair may try to gain a bit more, though a return above $1.3295 is needed to mark the temporary low. Further resistance is at $1.3330, $1.3375 and $1.3400, while on the downside targets remain at $1.3225, $1.3200 и $1.3105.
GBP/USD dipped to a fresh low of $1.6563 on Thursday following the weaker-than-expected retail sales data. Cable is now testing the April lows. Note that the pair is trading below the 200-months MA. Despite the surprisingly hawkish BoE minutes (2 members of 9 voted for a rate hike), we maintain a bearish view on GBP/USD with an initial target at $1.6460 (55-day MA, March lows). The technical picture remains clearly bearish below $1.6700. The “dovish” BoE member Broadbent will hold a speech in Jackson Hole on Saturday - perhaps he gives us more arguments for a later rate increase.
USD/JPY touched 103.90 on Thursday. There is a strong resistance in the 104.00/15 area, but any positive surprise from the US could push the hungry bulls higher. Next target lies at 105.60. Support is seen at 103.00, 102.70 and 102.00.
AUD/USD revisited August lows in the $0.9240 area, but then recovered to the $0.9300 zone. Aussie targets $0.9315, $0.9325 and $0.9340.