Forex trading plan for August 5
Demand for the US Dollar remains limited after the last week’s downbeat figures. DXY index consolidated around 97.50 on Tuesday. However, we expect the bulls to return at the end of the week. On Wednesday the market will focus on the NFP from ADP ahead of the official figures on Friday. You should also watch the US trade balance and non-manufacturing PMI tomorrow.
Commodity markets slowed their depreciation amid the weaker dollar and a bounce on the Chinese market. As a result, risky currencies have also regained some ground. We review this rebound as temporary. NZD/USD tested the 0.6600 resistance today, but failed to overcome it. Don’t miss the NZ employment figures tonight. USD/CAD holds above the key support at 1.3100.
EUR/USD came under resumed pressure after the US factory orders release. Tomorrow we’ll be watching service PMIs in euro zone. Bearish risks remain very high. GBP/USD holds in a sideways range above 1.5500. The market clearly remains uncertain about the BOE and the Fed’s policy intentions. On Wednesday we’ll watch services PMI. Thursday is going to be a key day for the cable – BOE meeting, quarterly inflation report and policy minutes are on the schedule. Buy GBP against the EUR and JPY.
USD/JPY consolidates slightly below the 124.00 mark. Resistance lies at 124.40/50, but this level could be broken on strong US data on Wednesday. Trend support – 123.70.