Forex trading plan for September 22
By Elizabeth Belugina
The Federal Reserve’s meeting came and went, but investors remain undecided about the global currency picture. On the one hand, the Fed delayed a rate hike. On the other hand, traders look at the other central banks for hints on whether they will ease monetary policy further.
EUR/USD was rejected down by resistance in the 1.1460 area on Friday on comments by ECB Executive Board member Benoit Coeure that monetary policy is on diverging paths in the euro zone and the United States. The expectations of additional easing by the European Central Bank are also hurting the single currency. The euro may remain under pressure until the ECB’s president Mario Draghi speaks on Wednesday. The Fed officials, on the other hand gave some hawkish remarks. EUR/USD slid to 1.1250 on Monday. Support is at 1.1215, 1.1170 and 1.1100. Resistance is at 1.1280, 1.1355 and 1.1460.
As for the Greek parliamentary election result, all in all, it supported the euro. Alexis Tsipras has strengthened his mandate as his leftwing party called Syriza got reelected and will form government together with former allies Independent Greeks. It is now widely expected that Tsipras will have enough power to continue implementing reforms on which he agreed with international creditors and ensure that Greece will get bailout money in full volume. Still, monetary policy will likely be the more important driver of the euro in the coming sessions.
GBP/USD met resistance at 1.1658 on Friday as the Bank of England’s chief economist Andy Haldane said the bank’s next move may be to cut rates, rather than raise them. Now that the Fed has sounded more dovish, traders expect cautiousness from the BoE as well. The pair is supported by 1.5515 (55-day MA) and 1.5425 (August 7 low). Resistance is at 1.5560 and 1.5660. UK will release public sector net borrowing data at 08:30 GMT.
USD/JPY so far managed to stay above 119.00. Japanese banks will remain closed on holidays on Tuesday, so beware of volatile moves. Resistance is 120.80/121.00 and 121.70. Support is at 119.50 and 119.00. The pair is influenced by the demand on the yen as a safe haven on the one hand, and higher US Treasury yields, on the other hand. So trading may remain range bound.
AUD/USD made two unsuccessful attempts to overcome the 55-day MA (0.7260) last week. Comments of the Reserve Bank of Australia’s Governor Stevens were bearish on Friday were bearish for Aussie. Support is at 0.7100 and 0.7030. Resistance is at 0.7200, 0.7260 and 0.7340. Aussie will be looking for further direction from the Fed’s officials’ comments and Chinese manufacturing PMI index on Wednesday.