Trading plan for Oct. 15
US dollar is trying to stop its correction down versus the major currencies, but to return to the confident bullish trend it needs good figures from the United States, but the forecasts for tomorrow’s releases are not very optimistic. At 12:30 GMT watch American retail sales, PPI and Empire State Manufacturing Index.
EUR/USD fell from $1.2667 to the $1.2650 area on a bunch of very negative data from the euro area. Here’s the support line connecting the lows of the 2 previous weeks, 50% of the October move and the support of the H4 Ichimoku. Above here the picture looks consolidative. The pair’s swinging up and down as both EUR and the USD are pressured by the negative factors. We still prefer selling on the upside. Resistance is at $1.2700, $1.2735 and $1.2760. Further support is at $1.2610, $1.2600 and $1.2750. Tomorrow watch the speeches of Mario Draghi at 07:00 and 18:00 GMT.
AUD/USD was limited by the 20-day MA and the $0.8800 handle. The risk sentiment is negative, but the USD lacks certainty about American economy recovery and is unable resume its confident appreciation. The pair’s in the consolidative mode. Resistance is at $1.8750, $0.8770 and $0.8800. Support is at $0.8713, $0.8690 and $0.8660. Tomorrow Aussie will be driven by Australian new motor vehicle sales (00:30 GMT) and Chinese inflation data (01:30 GMT).
The sharp decline in inflation pulled GBP/USD down to $1.5900 mark – this is a new 11-month low. CPI fell much more than expected from 1.5% to 1.2%, pulled down by reduced food and transportation prices. This is the lowest level since September 2009. Weak inflation data has taken the question of a sooner BOE rate hike off the table and paved the ground for the new lows in the cable. Labor data on Wednesday could become the only bright spot in the recent UK news flow: some improvement is projected. However, the upside will likely remain limited by the $1.6200 mark. Next support is seen at $1.5850 and $1.5720.
USD/JPY hit a new 1-month low of 106.70 – this is 38.2% Fibonacci from the July-September rally. Safe-haven demand might remain elevated in the coming days. Downbeat US retail sales (forecast – negative) could increase the selling pressure on the market. The pair will likely hit our bearish target of 105.60 in the coming days, so it’s still not too late to jump onto the bearish train. Resistance lies at 107.20, 107.50 and 107.90.