Forex trading plan for Feb. 18

EUR/USD recovered to the 1.1440 area. The fate of Greece remains undecided, but the market remains hopeful. However, it looks like the final decision won’t be made until Friday. The uncertainty may give bears the power to push the pair to 1.1300 and lower. On Wednesday the ECB will review the program which currently allows Greek banks to get liquidity from the Bank of Greece. If the ECB bans the program, this will add more pressure on Greek politicians to accept the bailout and thus can render the euro support after an initial decline.

The overall market sentiment about the US dollar in general will depend on America’s statistics (building permits, PPI, industrial production) and the FOMC meeting minutes. Let me remind you that USD strengthened after the Fed’s January meeting as the central bank improved estimates of the US economy. At the same time, the central bank has a wait-and-see approach, so we don’t expect big hints on further interest rates moves.

GBP/USD may be forming a wedge. The pair’s still feeling pressure from the daily Ichimoku Cloud. Lower than expected British inflation data has diminished the enthusiasm of the bulls. In addition, the decline of EUR/GBP has paused. Support for GBP/USD is at 1.5260 and then in the 1.5155 area. Resistance is at 1.5480 and 1.5540. Watch the UK labor market data and the Bank of England’s meeting minutes at 09:30 GMT. Members of British central bank will likely votes to keep rates unchanged. This may calm the bulls.

USD/JPY is facing resistance at 119.20. The top at 120.47 is still dominating the market. Support is in the 188.30 area. A decline below this point will trigger a bigger selloff activating a head & shoulders pattern. During the Asian session pay attention to the Bank of Japan’s meeting. No further monetary stimulus is expected, and this may increase demand for JPY.

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