Forex trading plan for October 1

By Kira Iukhtenko

US Dollar remains supported after the release of ADP NFP on Wednesday (200K versus 192K expected). The figures increase expectations for the upbeat official NFP on Friday (forecast 202K).

However, it is not all so bright in the US economy: Chicago PMI entered the contraction territory in September, falling from 54.4 to 48.7. On Thursday, the markets will be watching the US manufacturing PMI – negative surprises could continue here as well. However, for now the market reaction for the news remains muted – we expect the US Dollar to strengthen further later in the week.

Euro remains pressured by the QE extension talks. EUR/USD slipped below the 1.1200 mark. We see a “long-legged doji” reversal candle on the daily chart. Support lies at 1.1100 and 1.1050, while resistance – at 1.1280. Euro zone will also publish a bunch of PMI indices tomorrow.

GBP/USD attempted to move up, but failed to fix above the 1.5160 resistance. We still target 1.5050 and expect a bullish reversal from here. Watch the UK manufacturing PMI tomorrow.

China PMIs are, probably, the most important indices from the tomorrow’s range. Asian markets entered a corrective phase these days, but how long will the optimism live?

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