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Trading plan for 18/07/2017:
The US Dollar is heavily oversold after the dismantling of the Obamacare system in the US. EUR/USD spiked through 1.1500 level and USD/JPY tested 112.00 level. The strongest currency in the Asian trading session is the AUD, which has gained almost 1.5% after the RBA Meeting Minutes release.
On Tuesday 18th of July, the event calendar is busy with important economic releases, so global investors will pay attention to Consumer Price Index, PPI and Retail Price Index from the UK, ZEW Economic Sentiment data from Germany and the Eurozone. During the US session, Import Price Index will be released. Later on the day, Bank of England Governor Mark Carney will give a speech.
GBP/USD analysis for 18/07/2017:
The very important inflation data in form of Consumer Price Index (core), PPI and Retail Price Index from the UK are scheduled for release at 08:30 am GMT. Market participants do not expect any major changes in the inflationary pressures, so the CPI is expected to decrease slightly from 0.3% to 0.2% on a monthly basis, but it is likely to remain unchanged on a yearly basis at 2.9%. The Retail Price Index is expected to remain unchanged on a monthly basis at the level of 0.4%, but it could decrease slightly on a yearly basis, from 3.7% to 3.6%. Later in the global trading day, BoE Governor Mark Carney will give a speech, so his comments might influence the GBP/USD rate as well. During the last speech at the Central Bankers Conference in Portugal, his remarks were very hawkish, especially regarding the possibility of an interest rate hike, so they triggered an immediate Pound rally across the board. If he confirms his point of view in today's speech, the Pound might move even higher towards 1.3150 level.
Let's now take a look at the GBP/USD technical picture on the H4 time frame. The market has tested the technical support at the level of 1.3048 and now is bouncing back towards the local highs at the level of 1.3113. There is a possibility of a further extension towards the level of 1.3150, but the overbought market conditions and a clear bearish divergence between the price and the momentum oscillator indicates a possible pullback to appear soon. Nevertheless, the overall bias remains bullish as long as the level of 1.3029 is not clearly violated.
Market Snapshot: Gold is back up to test the trend line
The price of Gold is currently trading at a very important technical resistance level and it is testing the navy trend line dynamic resistance from below. The key resistance is the level of $1,236 and any breakout back above this level would confirm a strength of the bull's camp. The market conditions are oversold, so it supports the bullish case. The next important resistance is seen at the level of $1,257.
Market Snapshot: Crude Oil is testing the support
The price of Crude Oil is currently trading at the level of $45.85, which is a technical support for bulls. Due to the overbought market conditions, there is a possibility of a further slide towards the next technical support at the level of $45.00, which is quite close to the golden trend line support as well.
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