Trading plan for 17/07/2017:
The SP500 closed with a daily candle close to all time highs, so the overall mood on the financial markets is very positive. EUR/USD is trading close to 1.1450, USD/JPY is trading around 112.50 level. GBP/USD broke above the important resistance at 1.3045 and now is trading around this level. The WTI oil costs $46.65 and which is 0.3% up. On modest gains are also precious metals as an ounce of gold is valued at 1,231 USD. After the weekend, commodities are trading lower, especially wheat and corn, which are about 1.0% under the line.
On Monday 17th of July, the economic calendar is light in important data releases, but market participants will keep an eye on Empire State Manufacturing Index data from the US and Wholesale Sales data from Canada.
EUR/USD analysis for 17/07/2017:
The Empire State Manufacturing Index data that might influence the EUR/USD rate are scheduled for release at 12:30 pm GMT. This month, the survey of manufacturers in New York State conducted by the Federal Reserve Bank of New York is expected to decline from 19.8 points to 15.2 points. Nevertheless, the manufacturing activity continued to expand in June and a pair of sentiment indexes for the sector, like the ISM Manufacturing Index, jumped to a three-year high last month, so the prospects for this sector of the economy remains positive. On the other hand, according to the PMI Manufacturing data from the last week, the uptrend might start to weaken, but so far all the benchmarks are still above the fifty level. Today's data should bring more clarification whether the expected slight pullback will be enough to start to worry about.
Let's now take a look at the EUR/USD technical picture on the H4 time frame. The price is trading inside of the tight range between the level of 1.1489 - 1.1368 and the market conditions will soon get overbought again. There is a visible negative divergence between the price and the momentum oscillator, which suggests the technical support at the level of 1.1368 might be tested next. Better than expected data from the US economy might trigger a downward correction, but the overall trend remains bullish as long as the level of 1.1290 is not clearly violated.
Market Snapshot: SP500 closes at all time highs
The price of SPY (SP500 ETF) has closed at the level of 245.70, which is the new all time high for this index. At the hourly time frame, there is still no sign of any divergence between the price and the momentum indicator, however, the price is trading in overbought market conditions. The next support is seen at the level of 245.01 and this level will be the target of an eventual pullback.
Market Snapshot: US Dollar Index makes yet another lower low
The price of DXY has made another low at the level of 95.05 and it does not look like any form of a bounce is currently forming despite severely oversold market conditions.The most important technical support at the level of 95.91 has been already violated, so the next important one is seen at the level of 94.47.
