Trading plan for 11/04/2017:
In the absence of other economic events, the market focuses on geopolitical risk factors.The US Dollar is dropping under pressure of falling US Treasuries, as speculations over Fed policy leaves room for fears over the geopolitical situation. The stock market is feeling aversion to risk so Gold gets stronger. Oil remains high due to supply constraints from Libya and weekend raids in Syria.
On Tuesday 11th of April, the event calendar is busy during the European session, so the global investors will keep an eye on Consumer Price data from the UK and ZEW Economic Sentiment data from Germany and the whole Eurozone and Industrial Production data from the Eurozone. Later on the day, during the American session, FOMC member Neel Kashkari will give a speech as well.
GBP/USD analysis for 11/04/2017:
The Consumer Price Index data are scheduled for release at 08:30 am GMT and this time a slight decrease from 0.7% to 0.3% is being expected by market participants. The CPI Index measures the change in prices for retail goods and services, including food and gas, so a lack of a sudden inflationary pressure for consumers might not necessarily be a good thing as consumers in the UK are already experience an increase in prices despite the fact that the Brexit just started.
Let's now take a look at the GBP/USD technical picture in the H4 time frame. The bulls have managed to retrace to the level of 50%Fibo at 1.2434, but the up move looks like it is about to reverse. Better-than-expected data might help bulls to breakout above this level and test the techncial resistance at the level of 1.2504. The next support is seen at the level of 1.2364.
EUR/USD analysis for 11/04/2017:
The ZEW Economic Sentiment data are scheduled for release at 09:00 am GMT, but the expectations are quite different for Germany and the Eurozone. The German ZEW index is expected to improve from 12.8 points to 13.2 points, while Eurozone ZEW is expected to decrease slightly from 25.6 points to 25.0 points. The Industrial Production data are also expected to drop from 0.9% to 0.2% on a monthly basis but are expected to improve from 0.6% to 1.9% on yearly basis as well. Today's hard data on industrial activity and sentiment in the Eurozone offers another opportunity for conclusions if the recent improvement in economic growth for the overall currency region will be sustained in the months ahead.
Let's now take a look at the EUR/USD technical picture in the H4 time frame. Despite the oversold market conditions and growing bullish divergence, the market keeps trading sideways. The technical resistance at the level of 1.0599 is still not clearly violated, but better-than-expected data might be a trigger for the market that will start an upward move towards the next technical resistance at the level of 1.0628.
Market snapshot: Gold is not rallying amid global political tensions
On the daily time frame chart, the shooting star candlestick pattern is still making the bulls feel uncertain regarding the next up move towards the orange rectangular area. The overbought market condition on this timeframe and a wide supply zone (marked as a gray rectangle) are so far preventing any rally to develop higher. The technical resistance is seen at the level of $1270 and the next technical support is seen at the level of $1240.
