Forex trading plan for July 29
By Elizabeth Belugina
US dollar recovered on Wednesday, but didn’t fix above the mid-body of the previous bearish candle. CB сonsumer confidence came significantly below expectations (90.9 vs. 100.1). The FOMC meeting will definitely be the highlight of Wednesday. The selloff at Chinese stock market has increased uncertainty about the Fed’s position plus traders aren’t very encouraged by the recent US economic data, so they were closing bullish USD positions. Still, taking into account the recent comments of the FOMC members, the possibility of a more hawkish tone of the US remains on the table. We’ll likely see American currency consolidate ahead of the Fed’s announcement as many will stay out of the market. Also watch stocks and the market’s risk sentiment as they will have a direct impact on the currency market.
EUR/USD has breached the short-term downtrend and keeps trading above 1.10. The reason of the euro’s relative strength is that it is G10 currency with low yield, something that investors choose to escape from risks. Greece started technical talks with its creditors about the third bailout program. GfK German Consumer Climate is due at 06:00 GMT. Support is at 1.1000, 1.0985 and 1.0935. Resistance at 1.1125 still guards the way to 1.1200/15. The pair may stay in the 1.10/1.11 range ahead of the Fed’s meeting.
GBP/USD rose to $1.5618. British GDP growth accelerated in line with expectations, to 0.7% in Q2. The pound has approached a bunch of resistance levels (1.5640 – 1.5670 – 1.5700), which will be hard to break: these levels have been capping the cable the whole July. Support is at 1.5560, 1.5460 ahead of 1.5400.
USD/JPY was supported by the daily Ichimoku Cloud, the top of which is located in the 123.00 area. Still, the pair has to rise above 123.90/124.00 to retest 125.00. Support is at 123.00, 122.50 and 122.00.
AUD/USD rose to 0.7326 as the situation at Chinese stock market has a bit improved. However, Aussie remains vulnerable to the downside. Resistance remains at 0.7370 and 0.7400. Support is at 0.7260 and 0.7200.