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Trading plan for 19/09/2017:
The USD is slightly weaker today, but the fluctuations look like a noise in anticipation of tomorrow's FOMC decision. JPY crashes to the worst degree, followed by CAD, which dropped due to the Bank of Canada comments. The stock market is generally growing following Wall Street's new record. The Nikkei is up 2.0%.
On Tuesday 19th of September, the event calendar is light in important economic releases. Global investors will keep an eye on ZEW Economic Sentiment data from Germany, Manufacturing Sales data from Canada, and Building Permits data from the US.
EUR/USD analysis for 19/09/2017:
The ZEW Economic Sentiment and Current Situation data are scheduled for release at 09:00 am GMT and market participants expect an improvement in reading of both Economic Sentiment (32.4 points expected vs. 29.3 points prior) and Current Situation (86.3 points expected vs. 86.7 points prior). The Economic Sentiment in the Eurozone has been significantly improving since August 2016 with the highest reading in July 2017 at the level of 38.1. The other data from the Eurozone, and from Germany in particular, were improving as well (manufacturing PMIs, retail sales, customer confidence, Ifo), so there is no wonder why the sentiment was high and positive. Nevertheless, the highs in sentiment from January 2014 have never been met again (around 75 points ), so in the larger perspective, the current sentiment levels are still not that much impressive. If the data will beat the expectations today, the Euro might start to rally again across the board, fuelled additionally by the rumors related to the possible QE decrease in 2018.
Let's now take a look at the EUR/USD technical picture on the H4 time frame. The recent move up above the level of 1.2000 looks like a failure so far, but the good data might fuel the rally again. The next important resistance is seen at the level of 1.2092 and a breakout above will lead to the new local highs. On the other hand, the market is still being supported by the golden trend line and only a sustained breakout below the level of 1.1822 would change the immediate outlook to bearish.
Market Snapshot: USD/JPY at 61%Fibo resistance
The price of USD/JPY has managed to retrace 61% of the previous swing down and is currently trading at the level of 111.75. Moreover, USD/JPY is breaking through the external projection of Fibonacci 127%. The closure of a 4-hour candle above this level will open the way to the next external Fibonacci projection, which is 161% at 112.75. The closest support is the Friday high at 111.30.
Market Snapshot: EUR/GBP at trendline support
The price of EUR/GBP had bounced from the trendline support around the level of 0.8791 and currently is trying to test the technical support zone upper boundary at the level of 0.8851. The market conditions are starting to be oversold, but the momentum indicator is still pointing to the downside. Any daily candle close below the level of 0.8742 will indicate that the bears are in full control over this market.
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