Forex trading plan for October 8
By Kira Iukhtenko
Demand for the US Dollar remained subdued on Wednesday - the market is now repricing the chance for the Fed’s rate hike in the year 2015. We’ll be watching US unemployment claims and FOMC meeting minutes on Thursday. The greenback has potential for more depreciation on the current week.
At the same time, the commodity market has rebounded sharply since early October. We’ll see whether this rally will be long-lived. China’s markets are to open on Thursday after a long holiday - this is a risk for the current bullish move. AUD/USD reached the levels above 0.7200 on Wednesday. Be careful with buying the pair at current levels, though: we expect a pullback from 0.7250.
EUR/USD is trying to break from the current sideways channel, but has’t reached much success yet. Sellers pulled the price back below 1.1280 as German data disappointed on Wednesday. We will stay out of the market for this pair until more certainty is brought to the market.
Meanwhile, GBP/USD pushed above 1.5160 due to strong UK manufacturing data. We see the next bullish target at 1.5330. Watch the Bank of England policy meeting tomorrow. No policy change is expected, but we’ll be listening to the overall tone of the UK monetary authorities. Major support now lies at 1.5100.
As we expected, USD/JPY pulled down from the 120.50 resistance. The pair is trading in the symmetric triangle with the next target for going short at 118.50. Watch a block of Japanese economic data tonight - current account and factory orders. Negative news could become a risk for our bearish scenario.