Trading plan for Oct. 14
The European currency started the week in a positive mode with EUR/USD recovering from $1.2600 to $1.2700. The next question is whether this recovery will be long-lived. Note that Germany is due to release ZEW economic sentiment index at 09:00 GMT tomorrow, and a decline from 6.9 to 0.2 is expected. What’s more, industrial production is expected to plummet by 1.5%. This is the reason why we recommend selling EUR/USD on rallies. The pair is expected to retest the $1.2500 support to the downside in the nearest future
GBP/USD has also recovered some ground on Monday, but the buying interest remains shy. The pair fails to overcome the $1.6100 resistance for now. The overall trend for the cable also remains bearish and could be accelerated by the inflation data releases on Tuesday (8:30 GMT). CPI index is expected to slow to 1.4% y/y (the lowest level since the year 2009). Next support is seen at $1.6000 and $1.5950. However, the sellers should beware the labor data on Thursday: forecasts are upbeat.
AUD/USD keeps on consolidating above the last week’s $0.8640 low with the upside capped at $0.8900 for now. On Tuesday Australia is scheduled to release NAB business confidence and business conditions data for September (00:30 GMT). The figures are expected to show economic resilience.
USD/JPY opened the week with a bearish gap and touched the new monthly lows around 107 yen. We maintain a short position on the pair targeting 106.00 and 105.60. Major resistance is now seen at 107.50.