Currency Analyst since 2010

Forex trading plan for July 23

US dollar has given up some of its gains versus other currencies. The decline in American currency was provoked mainly by the profit taking. Still, the expectations of higher Federal Reserve’s interest rates are still in place as traders await the FOMC meeting due next week. Finally, there will be some figures out the US on Thursday – the unemployment claims figures at 12:30 GMT.

EUR/USD breached down its hourly consolidation range and slid to 1.0900 and lower. Buyers may come up in the 1.0888/1.0875 zone. Return above 1.0925 will make the bulls more active. Resistance is at 1.0965, 1.1000 (100-day MA, bottom of daily Ichimoku) and 1.1050. On Wednesday Greek parliament is set to vote on reforms required by the creditors. The bills is expected to pass, but may lead to further political tensions in Greece. On Thursday Bundesbank President will speak at 14:15 GMT.

GBP/USD rose to just below 1.5650. The Bank of England’s July meeting minutes showed that all members of the central bank votes to keep monetary policy unchanged, demonstrating though that the debate on the interest rate hike had intensified. All in all, the minutes were more hawkish than expected. Cable still faces resistance around last week’s highs at 1.5675 ahead of the psychological level of 1.5700. Support is at 1.5560, 1.5500 and 1.5450. Britain will release retail sales at 08:30 GMT (forecast is positive).

USD/JPY dipped to 123.55 before recovering to levels just below 124.00. The Bank of Japan’s Governor Kuroda has talked down the possibility of additional monetary easing. However, Japanese government has revised down its inflation forecast, so the markets will remain sure that the nation’s central bank will at least stick to its loose monetary policy for a long time.

AUD/USD failed to stay above 0.7400. Inflation figures released today didn’t rule out further interest rate cuts by the Reserve bank of Australia. However, the RBA’s Governor Stevens said that the regulator is ready to use such option, but underlined that such step will be connected with high risks.

NZD/USD is declining ahead of the Reserve Bank of New Zealand’s rate decision at 21:00 GMT on Wednesday. The RBNZ is expected to cut rates by 25-50 bps. Resistance is at 1.6650 and 1.6770. On the downside support is at 0.6500. AUD/NZD may rise towards 1.1300.

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