Trading plan for September 5
The "Central Bank’s" Thursday on the FX market is finally coming to an end. The Bank of England and the Bank of Japan didn’t bring any significant surprises, while the ECB did really shake the markets by cutting interest rate from 0.15% to 0.05% and announcing that it will be doing ABS purchases.
EUR/USD has hit $1.3000 on the news. Tomorrow the market will keep digesting Draghi’s comments. Support is at $1.2985, $1.2955 and $1.2900. Resistance is at $1.3105/10. Despite being oversold euro may touch lower levels on high US NFP.
Meanwhile, the GBP/USD sellers are testing the $1.6400 support to the downside. We advice to sell the cable on a break below $1.6390 with a target of $1.6300. There are no important releases on the UK agenda on Friday except for the Halifax HPI.
Bank of Japan meeting failed to push USD/JPY far above the 105.00 resistance area. The BOJ Governor Kuroda admitted is economy is stressed by the April tax hike, but didn’t give any hints on additional monetary easing. In his view, the economy still stands on the recovery path. These days any USD/JPY move will be related to the news from the United States: watch the NFP release on Friday. Resistance lies in the 105.30/40 area, while support for the pair - at 104.40 and 104.00.
Events to watch on Friday:
EUR: German Industrial Production
CHF: Foreign Currency Reserves
GBP: Halifax HPI (possible)
USD: Non-Farm Payrolls, Unemployment Rate, Average Hourly Earnings
CAD: Employment Change, Unemployment Rate, Ivey PMI