Forex trading plan for July 14
Risk sentiment improved on Monday as there was the long-awaited agreement reached on the Greek issue. US Dollar strengthened on the news as lowered Grexit expectations support the probability of an earlier Fed’s rate hike. The current week could lift the US dollar higher – if data does not disappoint. We will be watching the June US retail sales on Tuesday – the indicator is expected to hold in the green zone.
EUR/USD slipped to 1.1000. Break below the 1.1050 support is seen as a strong selling signal. Next bearish targets – 1.0940, 1.0910 and 1.0820. Watch the ZEW economic sentiment indices on Tuesday.
GBP/USD jumped 1.5580 on the Greek optimism, but has rapidly returned to the 550day MA at 1.5510. We still see a potential for a bullish reversal. Resistance to watch lies at 1.5550. In this case, we would buy the pair targeting 1.5800. Market will be focused on the UK inflation figures on Tuesday.
AUD/USD hovers around its 6-year lows below 0.7400. We hold short targeting 0.7000 in the mid-term. Watch the NAB business confidence on Tuesday, and do not forget to monitor China’s stock indices as well.
USD/JPY extended the last week’s rally on Monday. The pair broke out of the bearish channel, overcoming the 122.80 resistance. Next bullish target is seen at 124.30.