Trading plan for May 22
US Dollar slowed its recovery on Thursday. Yesterday’s FOMC meeting minutes took the June rate hike off the table as most of the members believe the economy remains too weak. On Friday, States are scheduled to release its CPI at 12:30 GMT. Consumer prices are expected to have stayed in a green zone in April (+0.1% vs. +0.2% in March). Fed’s Chair Yellen will deliver a speech at 17:00 GMT (comments on the US economic outlook are expected).
EUR/USD has support at 1.1050: a close below this level is needed for further bearish developments. Support then will be at 1.0990 and 1.0905. Resistance is at 1.1225, 1.1250 and 1.1290. Watch the comments of the ECB’s President Mario Draghi at 08:00 GMT.
GBP/USD popped up to 1.5700 as the UK retail sales surprised to the upside on Thursday (+1.2% vs. +0.4% expected). We are ready to go long on a break above 1.5700. Next resistance is now seen at 1.5810 (May 14 high) and then at 1.5890 (200-week MA). Watch the public sector net borrowing data and the BOE’s Carney and Shafik speeches on Friday.
USD/JPY closed at 121.35 on Wednesday before retreating to 120.85 on Thursday. US dollar was helped by rising stocks and volatility created by the release of the Federal Reserve’s meeting minutes. On Friday pay attention to the Bank of Japan’s meeting and press conference. There are some rumors that the central bank may upgrade its economic assessment. If that happens, this will reduce the odds of further monetary stimulus and make the yen strengthen. SupportforUSD/JPYliesat 120.50 and120.00/119.80. Resistanceisat 121.80/122.00.