Forex trading plan for February 2
Chinese data showed that manufacturing slowed last month at its fastest pace in more than 3 years. The news worsened the mood of the market players. In addition, oil prices declined on reports in the media that the Organization of the Petroleum Exporting Countries (OPEC) has made no decisions on the emergency meeting yet.
EUR/USD met support in the 1.0810 area (support line from January lows). Negative risk sentiment can make the single currency test higher levels. Resistance is at 1.0930/50, 1.1000 and 1.1050. We recommend looking for opportunities to sell the euro on the attempts to approach resistance, as traders will expect more easing from the European Central Bank after the Bank of Japan cut the deposit rate on Friday. The ECB President Mario Draghi will speak at 16:00 GMT on Monday. Om Tuesday the euro area will release unemployment figures.
GBP/USD keeps fluctuating around 1.4300. The UK manufacturing PMI came above expectations, though we remember that other data released recently were weak. Construction PMI is due at 09:30 GMT. Pound tries to recover leaning slightly to the upside. However, there’s resistance at 1.4335 and 1.4400, below which the picture will remain bearish. Support is at 1.4228, 1.4150 and 1.4080.
USD/JPY stalled below the 200-day MA at 121.46. The pair is overbought in the short-term, but 120.00 should provide support and lead to a pullback to the upside. The BOJ’s more loose policy makes buying on the dips out preferred strategy. Resistance is at 121.85, 122.80 and 123.50.
AUD/USD spiked to 0.7140 (daily MAs, former support line) on Friday forming a shooting star candle. Worries about China represent negative factor for the Aussie. Further esistance is at 0.7200. Support is at 0.7040, 0.7000 and 0.6935. The Reserve Bank of Australia will announce its decision in the morning (03:30 GMT). The RBA is expected to keep the benchmark rate unchanged, but there’s the risk of dovish comments from the regulator.