Forex trading plan for May 20
EUR/USD slid below the 100-day MA at 1.1175. Support lies at 1.1100, 1.1050 and 1.1000. The pair was under attack from both sides: the euro was weakened by the comments of the ECB board member about the asset purchases in May and June and bad figures from Germany, while the US dollar was strengthened by the unexpectedly good American housing market data. On Wednesday the Fed will release minutes of its April meeting. We don’t expect the central bank to signal a June rate hike, but once again say that all will depend on the economic data. This may limit the dollar’s decline, but with the increased pressure on the euro, EUR/USD should be a sell on rallies.
GBP/USD fell to 1.5450. UK CPI contracted in April on the annual basis. This means that the Bank of England may be father away from raising the interest rates than the market has thought. On Wednesday the Bank of England will release its meeting minutes. Decline below 1.5400 will open the way down to 1.5270 and 1.5150. Resistance is in the 1.5570/1.5600 area.
USD/JPY rose towards 120.50 on good figures from the US. The pair awaits the release of Japan’s Q1 GDP. Weak reading will help the pair get higher. Further resistance is at 120.85 and 121.00. Support is located at 119.90, 119.50 and 119.30.
AUD/USD fell to 0.7935. The minutes of the Reserve Bank of Australia’s meeting minutes showed that the central bank doesn’t rule out further rate cuts. Support is at 0.7855 and 0.7780. The levels of 0.8000/30 are now acting as resistance.