Trading plan for Oct. 1
EUR/USD fell to $1.2570 as the euro zone’s core inflation surprised to the downside. There are no signs that euro’s planning to stop its freefall, while US dollar enjoys broad strength. Support is at $1.2587, $1.2550 and $1.2500. Resistance is at $1.2660, $1.2715 and $1.2750. On Wednesday the pair will be focused on the data due in the US – ADP Non-Farm Employment Change (12:15 GMT) and ISM Manufacturing PMI (14:00 GMT). The approaching ECB’s meeting will keep pressuring euro.
GBP/USD recovered back above $1.6200 after hitting Sep.16 low of $1.6160 on Tuesday. Break below the $1.6275 area was a strong bearish signal that confirmed a local peak at $1.6520. Fix below $1.6160 will open the way to $1.6060 (Sep.10 low). Don’t miss the UK manufacturing PMI on Wednesday at 8:30 GMT. The index is expected to have grown from 52.5 to 52.6 in August, but is still remains far below the yearly highs.
USD/JPY hit a new 6-year high of 109.85. Global demand remains elevated, so we expect our initial target of 110.60 to be hit on the current week. Short-term support lies at 109.10. Japan will release Q3 Tankan indices tonight – forecasts are downbeat, so USD/JPY could get more growth fuel.
AUD/USD recoiled down from the downtrend channel resistance in the $0.8770 area, but was getting support on the downside. The key support is at $0.8700. Watch whether Australian retail sales data and Chinese official PMI will surprise the market. Risk sentiment isn’t positive and we don’t recommend longs until the current downtrend is breached.