Forex trading plan for November 18
By Kira Iukhtenko
US Dollar remained well-supported on Tuesday: USD Index hovers slightly below the historical highs at 99.60 as we write. Demand for the greenback is propelled by the Fed's rate hike expectations and the increased social and polictical uncertainty. US October CPI came out in line with forecasts on Tuesday (+0.2% m/m), leaving the door open for a December rate hike. On Wednesday traders will focus on the FOMC meeting minutes release. The document is expected to push the expectations even higher, so be ready for more USD gains tomorrow.
EUR/USD slipped to fresh muti-year lows of 1.0640. The pair remains in a clearly-cut bearish channel. The 1.0500 mark is expected to be hit in the coming sessions. Resistance is seen at 1.0800/30. Euro zone’s economic calendar for Wednesday is empty, while on Thursday pay attention to the ECB meeting minutes.
GBP/USD hovers below the 1.5200 mark. Our bearish scenario is now in action: break below 1.5130 will open the way to 1.5000 in the near term. UK economy remains in deflation, so chances for the BOE rate hike remain subdued these days. Watch the UK retail sales on Thursday: the reading is expected to have fallen by 0.4% on October. Data could trigger a severe GBP selloff at the end of the week.
Commodity markets are trading in the red and this is a strong medium-term bearish factor for the commodity block currencies as well. AUD/USD gained some ground on Tuesday due to the neutral RBA minutes, but we stay pessimistic about the currency’s prospects. Sell on rallies to 0.7160 and target 0.6900 in the mid-term.
Get ready to buy USD/JPY on a break above 123.60. Support is seen at 122.90. Don’t miss the BOJ meeting on Thursday.