Forex trading plan for September 30

By Elizabeth Belugina

The market’s risk sentiment remain unstable and will more likely swing to the negative than to the positive side. Traders continue trying to guess when and how fast the Federal Reserve will be raising interest rate. The speeches of the Fed’s officials at the beginning of the week were mixed and didn’t clarify the picture. Traders will watch American ADP employment report at 12:15 GMT on Wednesday. If the figures disappoint, US dollar will suffer versus the safe-haven yen, franc and even euro. A good reading will raise hopes of good American labor market release on Friday (Nonfarm payrolls or NFP) and support the greenback.

EUR/USD came under bearish pressure as data showed that German and Spanish consumer prices fell more than forecast in September. Low inflation increases the chance that that the European Central Bank will have to do more quantitative easing. On Wednesday, watch inflation data (CPI) for the whole euro area at 09:00 GMT: lower reading here will further strengthen ECB easing expectations and make the euro decline. Support is at 1.1170 and 1.1100 ahead of 1.1015. Resistance is at 1.1280, 1.1300, 1.1325 and 1.1360.

GBP/USD is trying to stay above September low at 1.5134, but the selling interest seems high on the way up to 1.5250. Support is at 1.5088 and 1.5000. The Bank of England’s Governor Mark Carney will speak on Tuesday at 19:40 GMT: we’ll see how this speech will affect the expectations of the BOE rate hike at the beginning of the next year. On Wednesday, at 08:30 GMT, the UK will release current account and final Q2 GDP figures.  

USD/JPY tested 119.25 on Tuesday briefly breaking below the lower triangle line and then returned to the middle of its 5-week range around 120.00. We still expect range trading in the coming sessions, so beware of false breaks. On the downside, further support is at 119.00 and 118.50. On the upside, resistance is found at 120.60 and 121.00.

AUD/USD spiked down to 0.6936, but then recoiled up from this level for a second time (double bottom?) and returned close to 0.7000. Although the general downtrend is still in place, Aussie is oversold and may recover to 0.7040/50. Further resistance is at 0.707o and 0.7100. The next support is at 0.6900. Still, AUD is qualified as a riskier asset, so demand for it will be limited. Australia will release statistics on building approvals at 01:30 GMT on Wednesday. The forecast is negative.


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