Trading plan for August 18
On Monday the US Dollar came under pressure after the weak NY Empire Manufacturing index release. The figure came out at its worst level in 6 years, confirming the strong dollar’s negative impact on the US producers (-14.9 versus +5 expected). However, the US dollar still remains very sustainable as the market is unwilling to sell it ahead of the Fed’s September meeting. On Tuesday we’ll be watching the US housing market data, while on Wednesday our attention will be glued to the CPI and Fed's meeting minutes.
EUR/USD trades under slight pressure with a medium-term resistance at 1.1215. There are no releases to watch in the euro area until Friday, so the pair will be driven by the US data. GBP/USD failed to overcome the 1.5700, so we expect the market to slide towards the 1.5500/5450 support area soon (trend line). On Tuesday we'll be watching the UK consumer prices data (forecast: unchanged at 0.0%).
AUD/USD hovers slightly below 0.7400 and awaits the RBA policy minutes early on Tuesday. The release could be supportive for the Aussie, but there are other strongly negative factors on the horizon - falling oil prices and China’s currency risk. AUD/USD targets 0.7000 in the coming weeks.