Trading plan for 12/04/2017:
The recent dozen or so hours have not brought fresh information about Syria or North Korea, but the financial markets show a lack of appetite for risky assets and a steady escape to safety. In the currency market, the Japanese Yen has won favor with investors. Jitters in light of geopolitical risks are setting the tone on the stock market. Gold reigns as a safe haven, crude oil receives a boost from OPEC's output cuts.
On Wednesday 12th of April, the economic calendar is packed with market-moving events. Market participants will focus today on Claimant Count Change data from the UK, Bank of Canada interest rate decision, and Crude Oil Inventories data.
GBP/USD analysis for 12/04/2017:
The Claimant Count Change data are scheduled for release at 08:30 am GMT and ten minutes later Bank of England Governor Mark Carney will give a speech. Market participants expect the number of claimants to have dropped slightly from -11.3k to -10.2k last week, so the unemployment rate is expected to stay at the same level of 4.7%. More important than data seems to be the speech from Governor Carney that might include remarks regarding the inflationary pressures and future interest rates policy. Any hawkish than usual remarks should strengthen the British Pound across the board.
Let's now take a look at the GBP/USD technical picture in the H4 timeframe. The bulls camp have managed to break out above the 50%Fibo and now the price is trading just below the technical resistance at the level of 1.2504. Any better than expected data might trigger the move towards the level of 1.2560 (the next technical resistance). No sign of overbought market conditions yet supports the view.
USD/CAD analysis for 12/04/2017:
The BoC interest rate decision is scheduled for release at 02:00 pm GMT, together with a Rate Statement and Monetary Policy Report. The BoC Press Conference is however scheduled for 03:15 pm GMT. Market participants do not expect any changes in monetary policy this time, so the interest rate should remain unchanged at the level of 0.50%. The Bank of Canada rhetoric regarding the interest rates should remain mildly-dovish and no changes in this field are expected either. Any change will be a big surprise for the markets.
Let's now take a look at the USD/CAD technical picture in the H4 timeframe before the news is released. The bulls camp looks weak after the H4 candle did not manage to close above the technical resistance at the level of 1.3342 despite the oversold market conditions. Currently, the key zone to the upside is the gray rectangular supply zone between the levels of 1.3342 - 1.3359. The technical support is seen still at the level of 1.3310.
Crude Oil analysis for 12/04/2017:
The Crude Oil Inventories data are scheduled for release at 02:30 pm GMT and market participants expect a drawdown of -700k barrels after a build up of 1,500k barrels a week ago. Recently, Saudi Arabia has informed OPEC that it wants to extend an agreement to reduce production by another six months. According to a recent report in March, the reduction of production by the 11 OPEC countries was 104% of assumptions. If today's stockpiles are bigger than expected, then it will surely translate into strong price declines.
Let's take a look at the Crude Oil technical picture in the H4 timeframe. The bulls have managed to breakout above the 78%Fibo at the level of 53.25 and now the price is trading just below the technical resistance at the level of 53.78. Nevertheless, the market conditions on this timeframe look overbought and multiple bearish divergences have grown between the price and the momentum oscillator, so the corrective move to the downside can happen anytime soon. The next support is seen at the level of 52.68 - 52.95.
