Trading plan for Oct. 28
EUR/USD is trying to overcome $1.2700. The results of the European banks stress tests were a bit better than expected, but data from both the euro area and the US on Monday came lower and outbalanced each other. Tomorrow market players will watch whether the US durable good orders and consumer confidence pick up. We see a kind of a short-term rising channel on the chart since Oct. 23. Resistance is at $1.2740, $1.2770, $1.2790 and $1.2850. Support is at $1.2675 and $1.2625.
Improved risk sentiment may pull AUD/USD higher, though it might be difficult for the pair to get outside of consolidative mood before we hear from the Fed on Wednesday.
GBP/USD has recovered to $1.6150 on Monday. UK CBI Realized Sales came out well above the forecast, rendering support to the pound. The upside remains capped by $1.6180 for now; next levels above the price are $1.6200 and $1.6220/30. Support is seen at $1.6000 and $1.5950. Dovish MPC member Shafik will deliver a speech at 18:30 GMT on Monday, while on Tuesday evening member Cunliffe is scheduled to speak.
USD/JPY trades under bearish pressure on Monday, but holds above the 107.50 support as we write. Last week’s close above the 108 mark was a bullish sign, so we see space for more bullish movement. Japan will release September retail sales data at 23:50 GMT on Monday (forecast: 0.9% vs. prior 1.2%).