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Forex trading plan for November 10

By Elizabeth Belugina

The advance of the US dollar after the release of strong labor market data in America on Friday paused on Monday as the market participants took profit.

EUR/USD recovered from Friday lows just above 1.0700 to resistance in the 1.0800 area. The meetings of the European finance ministers will continue on Tuesday, but the real impact on the euro may come only on Wednesday with the speech of the ECB president Mario Draghi. Unless the ECB steps away from signaling the upcoming policy easing, the euro will keep declining. We recommend small short positions. Support is at 1.0660 and 1.0600. Note as the euro moved below 1.0800, support levels became very weak.

GBP/USD retraced about 50% of Friday’s decline, and the bulls met resistance at 1.5115. If the pair stays below this level, we will favor small shorts. Pound has strong support at 1.5000, but this level may come under pressure. There will be no releases in the UK on Tuesday: traders will be waiting for the jobs report on Wednesday. Other resistance levels are at 1.5165 and 1.5200. Further retracement up will constitute the selling opportunity.

USD/JPY edged up to 123.50 after big gains on Friday. Resistance is at 124.00 and 124.50. Be careful with longs at the current levels as the pair is currently overbought. Watch Chinese data on Tuesday as they will affect the market’s risk sentiment (risk aversion is negative for USD/JPY). Support is at 123.00, 122.50 and 122.00.

AUD/USD found support around 0.7025 (September support line). Weak Chinese import data has weighed on the Aussie. Australia will release NAB business confidence and home loans early on Tuesday. Chinese figures will be also important. A break below 0.7000 will lead the pair to 0.6950 and 0.6900. Resistance is at 0.7100/25 and 0.7200. 

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