Trading plan for July 16
Demand for the US Dollar increased on Wednesday after the Fed's chief Janet Yellen gave out rather hawkish comments while speaking in Congress on Wednesday. What's more, strong data releases (PPI, manufacturing indices) served as a proof that the Fed has enough arguments to hike in 2015. As a result, the greenback rose to the July highs. On Thursday we'll listen to Yellen once again. You should also pay attention to the US jobless claims and Philly Fed manufacturing index tomorrow. We remain bullish for the USD.
It's a good time to sell the EUR/USD pair as it is currently testing the 1.0950 support. Break lower would open the way to 1.0820 in the coming sessions. Hawkish Fed and dovish expectations for the ECB meeting on Thursday will likely increase bearish pressure for the pair tomorrow.
GBP/USD failed to overcome 1.5670 as the UK labor market data disappointed the market: jobless claims and unemployent rate both increased. Bearish risk for the pair rose after the Yellen's speech. Bearish targets lie at 1.5340 and 1.5200.
Meanwhile, bullish prospects for USD/JPY increased. Break above 124.40 is needed to resume the broad bullish trend. BOJ's economic and inflation forecast cut is a new bullish factor for the market.
We remain bearish for all the commodity block currencies. Hawkish Fed and the new wave of the China's stock selloff will likely pressure the commodity markets in the near future. Get ready to sell AUD, NZD and CAD on corrective rallies.