Forex trading plan for October 2

By Elizabeth Belugina

Concerns about a sharp slowdown in the global economy somewhat declined as China’s manufacturing data for September were largely steady from the previous month (49.8 vs. 49.7). This helped US dollar against the refuge currencies, though weak ISM manufacturing PMI sent the greenback down other Forex majors. USD also remains under pressure ahead of the release of US labor market data on Friday. According to the consensus forecast, US nonfarm payrolls rose by 202K in September, while the unemployment rate remained low at 5.1%. As usual, the release is expected to ignite the market’s volatility.

EUR/USD tested lower levels for the second day, though 55- and 100-day Mas in the 1.1140 area provided support. Support is at 1.1130, 1.1100, 1.1050 and 1.1015. Resistance is in the 1.1200/15 zone ahead of 1.1240, 1.1270, 1.1300 and 1.1370. The ECB President Mario Draghi will speak at 01:30 GMT. This speech should be interesting given that the negative surprise in the euro area’s inflation figures and the increased expectations of more QE from the European Central Bank.  

GBP/USD keeps trying to hold above 1.5100, but the sellers don’t let it get higher. Still, manufacturing PMI was rather good and this helps support to hold. A move above 1.5200/15 is needed to lighten the mood and give bulls a chance to recover to 1.5300/30. Britain will release construction PMI at 08:30 GMT on Friday (positive forecast). Support is at 1.5088 and 1.5000.

USD/JPY has been consolidating between 120.30 and 119.50. Data released in Japan were mixed: Tankan manufacturing index declined, while services indicator rose. The pair remains within sideways trend with support at 119.50, 119.25 and 119.00. Resistance is at 120.00. 120.35, 120.60 and 121.00.

AUD/USD recovered to 0.7080 encouraged by a reprieve in risk sentiment and the fact that it was technically oversold. Aussie broke above resistance at 0.7040, which is now acting as support. As long as the pair remains above this point it retains the chance to rise to 0.7100 and probably even to 0.7200 where it will find strong resistance. Watch the release of Australian retail sales at 01:30 GMT (positive forecast).

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