Forex trading plan for October 9

The trading plan for Friday, October 9, was prepared and released before the end of the US trading session on Thursday, October 8.

Traders await the release of the Federal Reserve’s September meeting minutes at 18:00 GMT on Thursday, so the volatility for Thursday isn’t over at this point. Market players want more hints about the timing of the Fed’s rate hike. Still, after the weak NFP figures for September, the impact of the minutes will likely be limited. Also note that some FOMC members will speak in the coming sessions: Williams, Lockhart and Evans. All these policymakers are doves, so their comments could be negative for USD.

EUR/USD tested levels above 1.1300, but then slipped to 1.1250 as the minutes of the European Central Bank’s September meeting showed that the ECB sees increased downside risks for inflation and thus leaves open door for further monetary stimulus. We still see 1.1330 as an important obstacle on the upside before we can see growth towards 1.1460. Euro will probably stay capped, though downside potential is limited.  Support is at 1.1215 and 1.1170.  

GBP/USD spiked to 1.5370, but then returned below the 200-day MA at 1.5320. The Bank of England left monetary policy unchanged. As expected, only 1 member of the Monetary Policy Committee voted to raise the benchmark interest rate, while other 8 said that it should remain at the current level of 0.5%. The central bank’s meeting minutes were dovish as the regulator expressed concerns about global growth and British inflation. Note that the Bank of England’s Governor Carney speaks at 18:00 GMT on Thursday. On Friday the UK will release trade balance at 08:30 GMT. A close below 1.5320 on Thursday will be bearish. Support is at 1.5240 and 1.5170. A close above 1.5320 will open the way to 1.5440 (55-day MA).

USD/JPY moved towards the lower edge of the ongoing consolidation pattern weakening to the 119.60 area, but found support there. Sideways trade will persist until we see a very clear signal of a break of either 121.50 or 118.50. For now, if you are trading this pair, use range trading strategies.

AUD/USD ran into the resistance of the daily Ichimoku Cloud in the 0.7200 area. Australia will release home loans early on Friday (forecast is positive). Resistance is at 0.7275 and 0.7300. Support is at 0.7085. 

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