Trading plan for Oct. 10
US dollar remained weaker on Thursday after a day earlier the Fed released dovish FOMC meeting minutes. However, concerns about other economies – primarily the euro area – start to return, and demand for USD on Friday may be higher.
EUR/USD reached $1.2790, but then retreated below $1.2750 ahead of Mario Draghi’s speech today at 19:00 GMT as there’s the risk of dovish comments. Support of the current short-term uptrend is located at $1.2690. A decline below this point will make the pair slide below $1.2600. As long as the pair’s above this level, the near-term outlook will remain positive. Further resistance is at $1.2830, $1.2860 and $1.2900.
AUD/USD reached the levels just below $0.8890. This corrective move up looks a bit weak, but support is at $0.8830 and $0.8795 (top of the H4 Cloud), and the bulls will retain chances until the pair’s trading above the latter. Lower, however, the negative pressure will intensify and a decline below $0.8730 will be a sure sell. Next resistance is at $0.8930.
GBP/USD pushed to $1.6225 in Europe before returning back below the $1.6200 mark. As it was expected, the Bank of England left policy unchanged on today’s meeting. Policy announcement came out together with the news that the strong rally in the UK housing prices has started to wane, reducing inflationary pressures. However, the medium-term market sentiment turned bullish by the end of the week due to the dovish Fed’s minutes. Our idea is to buy the cable on dips targeting $1.6240 and than $1.6300. This area remains strongly resistive these days. UK trade deficit is expected to show contraction on Friday – strong data could render support for GBP.
USD/JPY remains in a downward channel and holds below the 108.00 mark. The pair is testing the levels below 23.8% Fibonacci from the July-September rally. The current market setup is clearly bearish; we expect a correction towards our targets at 107.30 and 107.00. Don’t miss the BOJ meeting minutes and Tertiary Industry Activity data on Friday.