Trading plan for 07/08/2017:
At the beginning of the week, there are major changes in the major currencies despite a slight weakening of the US Dollar. The strongest currencies are AUD (+0.2%), EUR (+0.17%) and SEK (+0.15%). The exception is NZD which loses 0.15%. WTI crude oil starts the week with a slight decline and is at $49.40 (-0.3%) and Brent is at $52.25 (-0.35%). The ounce of gold costs 1,257.80 USD (-0.1%). On the Asian stock market sentiment was positive: the Hang Seng added 0.45%, the Nikkei 225 advanced by 0.55%, and the Shanghai Composite rose by +0.23%.
On Monday 7th of August, the event calendar is light but global investors should keep an eye on the CPI data from Switzerland, the Halifax House Price Index data from the UK and the Sentix Investor Confidence data from the Eurozone. Later, during the US session, FOMC member Neel Kashkari will give a speech.
EUR/IUSD analysis for 07/08/2017:
The Sentix Investor Confidence Index data is scheduled for release at 08:30 am GMT and market participants expect a slight deterioration in confidence from 28.3 points to 27.8 points. The dip in the confidence might be related to the current situation in the EUR/USD rate exchange as it recently got very strong. This strengthening of the euro is the result of a stronger run of economic growth this year, but it's a complicating factor for the European Central Bank's monetary policy. The outlook for softer inflation is more visible as the ECB target of 2.0% hasn't been reached yet. Moreover, the euro's climb since June might decrease inflation by 0.2 percentage points this year and 0.4 percentage points next year, which is a significant impact. In this situation, the ECB has a tough nut to crack as it can not withdraw from the stimulus and can not hike the interest rates immediately. The most likely move from the ECB is to wait-and-see approach to consider the future data from the Eurozone economy.
Let's now take a look at the EUR/USD technical picture at the H4 timeframe. The market had bounced from the technical support at the level of 1.1728 and currently is trading in the middle of the range. The recent swing high is seen at the level of 1.1908, but hasn't been tested yet. The market is sliding down from the overbought conditions and the momentum indicator is pointing to the downside. In a case of a further pullback towards the support at the level of 1.1728, the next technical support is seen at the level of 1.11612.
Market Snapshot: Crude oil tests the 78%Fibo again
Crude oil has been trading sideways since hitting the golden channel resistance at the level of $50.29. The nearest technical support is seen at the level of $48.38 and if broken, then another support is seen at the level of $47.54. The momentum indicator that points to the downside supports the bearish bias.
Market Snapshot: AUD/USD retreats from highs
The price of AUD/USD is still moving inside of the navy channel, but lower highs and lower lows are being made inside it. The most important technical support is seen at the level of 0.7874 and any breakout below this level will directly expose the next technical support at 0.7838 to be tested.
