26.05.201710:15 Forex Analysis & Reviews: Trading plan for 26/05/2017

Trading plan for 26/05/2017:

The pound was under pressure overnight, probably due to economic and political reasons. Crude Oil price drop is weighing on commodity currencies and some stock markets indices like Australian. Mixed moods help USD/JPY but EUR/USD is stable, trading around 1.1200 level.

On Friday 26th of May, the event calendar is light in important economic data releases, nevertheless, market participants will pay attention to Durable Goods Orders, GDP Second Release, and Revised UoM Consumer Sentiment data release during the US session.

EUR/USD analysis for 26/05/2017:

The Durable Goods Orders and GDP Second Release are scheduled for release at 12:30 PM GMT today and market participants expect an increase in the US GDP from 0.7% to 0.9% in the first quarter. The Durable Goods Orders are expected to decrease -1.4% in the month of April after a 0.7% increase in March. These would not be drastic decreases and would essentially imply a continuation of a range. The upper end of this range had been reached in the 2013-17 period, so now the orders should move in a steady sideway range. The durable goods are considered to be the key to a higher economic growth rate (together with business investment) but since 2013 the durable goods have been relatively unchanged. Maybe today's better than expected figure would trigger renewed anticipations of stronger than expected GPD in the second quarter.

Let's now take a look at the EUR/USD technical picture on the H4 time frame. There is a clear trading zone between the levels od 1.1170 - 1.1268 that is waiting for a breakout. So far stochastic and momentum indicators are pointing out the downside breakout possibility, but the market does not follow the clues yet. The wait-and-see approach is the best strategy to apply to the current market conditions.

Market Snapshot: Crude Oil sell-off continues

After the first leaks regarding the OPEC meeting production cuts extension, the price of Crude Oil deteriorated almost 50% and was stopped at the level of $48.24. Nevertheless, market participants are still waiting for the official statement from OPEC regarding the production cut agreement. The most important support is currently the zone between the levels of $47.88 - $48.24. Breakout below would suggest the bears are in full control over the market again.

Market Snapshot: Pound broke the trend line support

The price of GBP/USD has broken below the golden trend line support around the level of 1.2930 and now it trades just below the technical support at the level of 1.2881. Nevertheless, the road to the key longer-term technical support zone between the levels of 1.2706 - 1.2777 is still long. The momentum indicator is pointing to the downside, so the next support at the level of 1.2828 is expected to be tested before any meaningful bounce will occur.