Forex trading plan for Feb. 4
EUR/USD has breached to the upside the triangle within which it was consolidating for about 5 days. Above 1.1440 (23.6% Fibo of the December-January decline) the pair may rise to 1.1500, 1.1550 and 1.1655 (38.2% Fibo). However, you should be aware of the risks to euro’s correction up: bad data from the euro area (watch the region’s retail sales at 10:00 GMT) and good data from the US (watch ADP Employment report at 13:15 GMT and ISM Non-Manufacturing PMI at 15:00 GMT). In addition, there will be news from the euro area: Greek Prime Minister Alexis Tsipras will meet with European Commission President Jean-Claude Juncker. Support for EUR/USD is at 1.1320, 1.1275 and 1.1210.
NZD/USD followed the Aussie on Tuesday, but found support at 0.7170 in the Asian trade. New Zealand is scheduled to release labor market data late on Tuesday (21:45 GMT). The RBNZ Governor Wheeler will deliver a speech later, at 23:00 GMT. Given the recent RBNZ dovish rhetoric, the kiwi could come under resumed pressure. Next bearish target for the pair lies at 0.7100 (2011 low). The bullish move will likely be limited by the $0.7300 mark (upper border of the January bearish channel).
AUD/USD broke below the $0.7700 support on Tuesday following the unexpected RBA rate cut by 25 bps. However, the sellers failed to break below 0.7620 so far – this is where the lower border of the 2013-2014 bearish trend lies. Get ready to sell AUD/USD on a break below this area targeting 0.7160 and 0.7000 in the medium term. Major resistance is now seen at 0.8000.There is now releases to watch in Australia on Wednesday. Don’t miss the retail sales data on Thursday and fresh RBA economic projections on Friday.
USD/CAD retraced towards the 1.2500 area at the beginning of the week. Demand for the loonie increased amid the ongoing oil market recovery. In our view, the decline won’t be long-playing. Next support for the pair lies at 1.2380 and 1.2290 (23.6% Fibo). January Ivey PMI release at 15:00 GMT on Wednesday is a risk event for the pair.
USD/JPY has twice found support just below 117.00, but it still facing much of resistance on the upside at 117.90 and 118.50. We expect consolidation ahead of the US data releases. GBP/USD remains consolidative as well. Resistance is at 1.5185 and we favor selling in this area targeting 1.4915 with stops above 1.5270.