Trading plan for October 22
By Kira Iukhtenko
All the commodity assets traded under pressure on Wednesday. Brent price slipped below 48 dollars per barrel, approaching the local 47 support (September lows). Meanwhile, Bank of Canada left monetary policy unchanged, but lowered economic projections for 2015-2017. As a result, USD/CAD jumped, reaching our recent target at 1.3060. The inverse head-and-shoulders pattern on the H4 chart was confirmed. We recommend going LONG on pullbacks to 1.3070.
AUD/USD is currently trading in a short-term bearish channel and approached the 0.7200 support. Go SHORT on a break below 0.7200 targeting 0.7160 initially or sell the Aussie on highs if they happen. We stay bearish below 0.7350.
The ECB meeting is the key event to watch on Thursday. We expect to hear dovish comments from the ECB president Mari Draghi, paving the ground for more QE in December. EUR/USD is forecasted to break out from the current sideways channel tomorrow. SELL the pair from 1.1330 targeting 1.1250 initially.
GBP/USD is also trading in a flat range these days. We still expect the cable to undertake another push higher, targeting 1.5580. However, do not go LONG before the pair fixes above 1.5500 on the daily chart. UK retail sales are expected to render some support to the pair tomorrow.