Forex trading plan for July 24
Demand for the US dollar recovered on Thursday after the unexpectedly strong labor market figures. Jobless claims dipped to a 42-year low of 255K, increasing expectations of a Fed'a rate hike in September. However, the market sentiment still remains cautious as US corporate earnings were quite disappointing this week. On Friday we'll be watching the US PMI and new home sales.
EUR/USD recovered to 1.1020 after the Greek parliament approved the second reform package. However, we review the EUR/USD recovery as corrective and recommend selling euro on rallies. The 1.0820 support could be broken in the coming sessions. In euro zone we'll also be watching a bag of PMI releases.
GBP/USD has once again retraced from the 1.5670 resistance on weak UK retail sales. There is a high bearish potential for the pair in the coming days if the US data doesn't disappoint. Next support lies at 1.5450.
Commodity currencies were quite contoversial today. NZD pushed higher on a lower-than-expected RBNZ rate cut, while CAD strengthened on strong retail sales in Canada. meanwhile, Aussie was trading in a red zone. We see the current rebound in commodity block currencies as a corrective one and recommend selling all of them on rallies. Watch the China's manufacturing PMI on Friday - this is another risk factor for the market.