Trading plan for 17/08/2017:
The FOMC Meeting Minutes release has clearly weakened the US Dollar, which is losing today to all major currencies. The strongest is JPY, which is up 0.34%, then NOK and AUD (+0.2%). Among precious metals, a positive sentiment is still present, the Gold ounce is at $1287 (+0.3%), Palladium climbs +1.1%, Silver +0.1%. On the Asian stock market mixed sentiment, Shanghai Composite rose 0.35%, but Hang Seng and Nikkei lost 0.2% respectively and 0.1%.
On Thursday 17th of August, the event calendar is busy with important data release. First, the UK will post Retail Sales With Auto Fuel data, then EU will post Trade Balance, Consumer Price Index data and ECB Monetary Policy Meeting Accounts from July. During the US session, Canada will reveal Manufacturing Sales data and US will present Unemployment Claims, Continuing Claims, Philly Fed Manufacturing Index and Industrial Production data. Later during the session, FOMC member Robert Kaplan will give a speech.
GBP/USD analysis for 17/08/2017:
The Retail Sales data from the UK are scheduled for release at 08:30 am GMT and the market participants expect a substantial decrease from 0.6% (2.9% on yearly basis) to 0.2% (1.4% on yearly basis) in the reported month. After yesterday's positive update on Britain's labour market ( unemployment rate down, claimant count down, wage growth edged higher), today's sales data are expected to decline. Retail Sales are responsible for a large part of the UK GDP, especially if bungled together with COnsumer Spending. Those two can not increase if the wages growth is small or none and the inflation are rising, but according to the recent data the current situation in the UK seems to be different than that. If the data will beat the expectations, it will suggest, that the UK economy, despite headwinds brewing due to Brexit, remains resilient. This, in turn, will strengthen the British Pound across the board in the short-term.
Let's now take a look at the GBP/USD technical picture at the H4 timeframe. Despite the better than expected labor data, the market is still trading below the important technical resistance at the level of 1.2932.This will be the key level for bulls after the data are released because only violation of this resistance will put the bulls back into control over the market. On the other hand, the technical support at the level of 1.2845 had been tested three times already, so if it breaks, then the sell-off will continue down to the level of 1.2811 - 1.2793.
Market Snapshot: Gold bounces from 61%Fibo
After the FOMC Meeting Minutes release, the price of Gold had bounced from the 61%Fibo retracements of the previous swing up at the level of $1267 and now is trading again around the local high at the level of $1290. The market conditions are neutral to positive and the momentum indicator is pointing to the upside. The key resistance is seen at the level of $1296.
Market Snapshot: SPY is back under the key resistance
After a drop from the all-time high at the level of 248.88 the price has made a lower low at the level of 243.73 and then bounced back up towards the level of 247.55, leaving behind the gap between the levels of 244.65 - 245.54. Currently, the market trades in overbought conditions around the lower high at the level of 247.55, just below the golden trend line. If this trend line is not violated soon, then the odd for filling the gap will increase.
