Trading plan for 31/07/2017:
The US Dollar begins the week a little bit stronger as EUR/USD is at 1.1730 and USD/JPY is back at 110.50. A slightly weaker than expected PMI from China has not caused negative sentiment on the Asian stock exchanges. Industrial metals are strong; Iron Ore is about 8% higher which also supports Copper. The WTI Crude Oil price is approaching $50 a barrel and is rising today by 0.3%.
On Monday 31st of July, the event calendar is quite busy with important economic releases. At the beginning of the London session, Germany will release the Retail Sales data and Italy will unveil the Unemployment Rate data. Later, the UK will provide the Net Lending to individuals and Mortgage Approvals data. The Unemployment Rate and Consumer Price Index from the EU will be released next. Durning the US session, Canada will post the Raw material Price Index data and the US will provide the Pending Home Sales and Chicago Purchasing Manager Index data.
EUR/SUD analysis for 21/07/2017:
The Eurozone Consumer Price Index Flash Estimate and Unemployment Rate are scheduled for release at 09:00 am GMT and market participants expect the CPI to stay unchanged at the level of 1.3% on a yearly basis and the Unemployment Rate to decrease from 9.3% to 9.2%. After acceleration in the first quarter, the inflationary pressures eased in the recent months. The downward trend is expected to stabilize over the summer months and possibly pick up during the second half of the year. If the CPI projection of 1.3% is right, the data will offer fresh justification for the European Central Bank to begin tightening monetary policy as in the recent months the ECB was under pressure to start lifting its 0% interest rate policy.
Let's now take a look at the EUR/USD technical picture at the H1 timeframe. The market is trading close to the recent highs around the level of 1.1775 in overbought market conditions. The next important technical support is seen at the level of 1.1617 and only a sustained break below this level would put the bears back into control over this market again. The intraday important support is seen at the level of 1.1711 and it might be tested if the CPI data do not beat the expectations.
Market Snapshot: Crude Oil under important resistance
The barrel of WTI is rising today for the sixth session in a row and is approaching the $50 barrier. At the same time, the price is close to the 76%Fibo retracement of the previous swing down and 61.8%Fibo retracement of the decline recorded since the first half of April. In addition, the price is currently testing the upper band of the golden upward channel. The confluence of such significant resistances and overbought market conditions indicate that short-term correction might occur any time now. The next technical support is seen at the level of $48.65.
Market Snapshot: GBP/USD unable to break out higher
After a few attempts, the price of GBP/USD is still unable to break out above the technical resistance at the level of 1.3161. The next important support is seen at the level of 1.3050 and if this level is clearly violated, then the nave trend line will provide no support anymore. The overbough market conditions support the short-term bearish bias.
