Forex trading plan for May 25
US dollar keeps strengthening versus other major currencies as the expectations that the Federal Reserve will raise rates in the coming months strengthened. Stronger US currency is affecting commodities. Gold failed to overcome 55-day MA at $1250. Support is at $1230 and $1211.50 will be the next target if this level fails to hold. Brent crude oil kept trading sideways around $48.20 per barrel. Oil inventories statistics will be traditionally released by the American Petroleum Institute on Tuesday and the US Energy Information Administration on Wednesday. The figures will be important for the market’s risk sentiment.
EUR/USD was hit by weaker-than-expected German ZEW economic sentiment (6.4 vs. 12.1) and the euro area’s economic sentiment index (16.8 vs. 23.4). The pair break below 1.1200 and last week’s low at 1.1180, which will now act as resistance. The near-term downtrend remains in place. Watch support at 1.1140 and 1.1100 ahead of 1.1050. On Wednesday watch the release of German Ifo business climate at 08:00 GMT: the forecast is positive, but the expectations for the European data, which came out today, were also optimistic.
GBP/USD reversed up and surged to the levels above 1.4600. At the moment of writing British currency met resistance of the line connecting May highs. The ability to fix above 1.4630 should open the way up to 1.4760. Support is at 1.4550 and 1.4470. No data from the UK is due on Wednesday.
USD/JPY recovered, but significant resistance at 110.00 is still in place. The pair may try to consolidate between this point and 109.00 as the market’s swinging between the risk aversion mode, which is good for the yen, and the improved expectations for the USD.
AUD/USD dived down, but met support at 0.7143. The pair will likely stabilize at this level for some time. The previous support at 0.7200 is now the first resistance, and the 0.7260 should cap the recovery.