Currency Analyst since 2010

Forex trading plan for July 31

By Elizaveta Belugina

US GDP came in a bit below expectations: in Q2 American economy rose by 2.3% (forecast +2.6%). US economic growth is high enough to show that the US economy has strengthened after the weaker Q1. GDP change in Q1 was revised up from -0.2% to +0.6%. The number of unemployment claims was as expected (267K), below 2015 average that is a good thing.

US dollar should remain mostly supported after the releases as the expectations of the upcoming Federal Reserve rate hike remain well in place. On Friday America will release Chicago PMI (13:45 GMT) and revised consumer sentiment (14:00 GMT). However, gains in USD can be rather small on Friday as traders will be tired after previous volatile days, and some other currencies will put up a fight against the greenback.  

For instance, after forming a shooting star candle on Wednesday GBP/USD managed to stay in the 1.5600 area. Still, the inability of the bulls to overcome resistance at 1.5700 shows their weakness. Below the trendline support at 1.5520 the decline will proceed to 1.5460 and 1.5400. No news will come out of the UK on Friday.

EUR/USD slid towards 1.0910. Further support is at 1.0870 and 1.0820 (bottom of the 3-month range). According to the article released in Financial Times the IMF won’t take part in Greek third bailout at this point because of the nation’s high debt and the history of reform failures. That’s a bad news for the single currency. In the euro area watch for flash inflation figures at 09:00 GMT.

USD/JPY almost reached 124.60. Support is at 123.70 and 123.00. Above 124.50 the pair may gather strength for an advance to 125.00 and 125.85, but the way up won’t be easy.

AUD/USD reached target at 0.7260 (minimums of the beginning of the week). Australia will release producer price index at 00:30 GMT. Aussie’s decline has slowed down and is accompanied by consolidation. Support is at 0.7200, while resistance lies at 0.7300 and 0.7350. 

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