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Currency Analyst since 2010

Forex trading plan for August 4

By Elizaveta Belugina

US dollar recovered some of its Friday losses. American personal spending growth slowed down to 0.2% in June, while the previous reading was revised down from 0.9% to 0.7%. US ISM manufacturing PMI also came out below expectations. Weak statistics will curb the greenback versus its main counterparts.

EUR/USD spiked up towards 1.1115 on Friday, but then closed in the 1.0980 area. Support is at 1.0900, 1.0870 and 1.0820. Resistance is at 1.1020 (100-day MA) and 1.1095 (55-day MA).

GBP/USD remained below 1.5700, but is holding above support line since April in the 1.5550 zone. The pound should rise above 1.5700 to be able to get to 1.5815 (May high). Only below 1.5550 sterling will fall to 1.5400. UK manufacturing PMI came slightly above forecasts. On Tuesday there will be the next important piece of British data – construction PMI.  

USD/JPY is supported by the daily Ichimoku Cloud. The greenback has to overcome resistance in the 124.50/60 area in order to open the way to 125.00 and 125.85 (June high). Support is at 123.35/00 (Cloud’s top). The decline below this level will make the pair vulnerable for a slide to 122.00 (Cloud’s bottom).

AUD/USD is swinging in the 1.7235/1.7035 area. Australian dollar was hurt on Monday by worse than expected China manufacturing PMI. On Tuesday Australia will release retail sales (positive forecast) and trade balance (negative forecast) at 01:30 GMT. The Reserve Bank of Australia’s meeting results will be announced at 04:30 GMT (forecast is positive). According to the consensus forecast, the RBA will keep its benchmark rate unchanged at 2%. Still, the central bank is likely to create some negative pressure on Aussie with its comments as it will probably refer to the sliding commodity prices, which create the need for weaker AUD. Resistance is at 0.7323 and 0.7363. Support is at 0.7230 and 0.7200. 

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