Trading plan for October 21
By Kira Iukhtenko
Forex economic calendar on Wednesday, October 21, is rather light. Pay special attention to the Bank of Canada meeting. Interest rate is expected to be left at 0.5%. However, the press-conference could bring a bunch of negative surprises for the Canadian economy. USD/CAD traded under pressure on Tuesday, but we are ready to go LONG on a fix above 1.3000 and with an initial target at 1.3060. Break higher will confirm an inverse “head-and-shoulders” formation and will be a broader bullish sign. Support lies at 1.2900.
Another attractive pair to trade in the coming sessions is GBP/USD. We advise going LONG on a fix above 1.5500 targeting 1.5580 (38.2% Fibonacci). Key support lies at 1.5410/00. Bank of England Governor Mark Carney will deliver a speech on Wednesday, while on Thursday the market will focus on the UK retail sales. Upbeat forecast could become a growth driver for the cable.
The major event of the week is the European Central bank meeting on Thursday. Rates are expected to stay on hold at 0.05%, while the Mario Draghi could deliver a cart of dovish comments later in the day or even announce an additional QE. EUR/USD break below the trend line at 1.1330 is a good moment to go SHORT. Major support is now seen at 1.1250 – break below will confirm the end of the mid-term bullish phase. Resistance – 55-week MA at 1.1450.