Trading plan for 30/08/2017:
The volatility of the major currencies against the US Dollar is minimal except for the gaining Australian Dollar. EUR/USD after yesterday's rally over the level of 1.2050, has spent today's Asian session in 20 pips range around 1.1975.Sentiment on the stock markets has improved, but the energy markets are suffering chaos caused by hurricane Harvey. The Wall Street session ended yesterday with a modest gain. The S&P500 futures contract is minimally extended to 2450 points.
On Wednesday 30th of August, the event calendar is busy with the important news releases. During the London session, Spain will present Consumer Price Index Flash data and Switzerland will post KOF Economic Barometer data for the last month. Later on, the UK will reveal Net Lending to Individuals and Mortgage Approvals data and Germany will present Preliminary CPI data for the last month. European Commission will release the Economic Sentiment index (ESI) data. During the US session, ADP Non-Farm Employment Change data from the US will be posted, together with Second Release GDP and GDP Price Index data. Canada will present Current Account data.
EUR/USD analysis for 30/08/2017:
The European Commission Economic Sentiment index (ESI) data are scheduled for release at 09:00 am GMT and it will be quite interesting to see how hard the latest geopolitical uncertainties influenced the mood of the European investors. Economists think that the flash data for the consumer sentiment index in August will hold steady at -1.5 (close to a 10-year high) in revised numbers. The reason for such an elevated sentiment data lies in very good PMI figures from the Eurozone, that support the case for expecting that the euro area's economic recovery will endure in the second half of the year. If the Flash GDP reading will beat the expectations, then the Euro currency will receive another boost up across the board.
Let's now take a look at the EUR/USD technical picture at the H1 time frame. After establishing a local top at the level of 1.2069, the market reversed back below the 1.2000 support and now is trading close to the 38% Fibo retracements of the up wave. There is a strong support zone between the levels of 1.1817 - 1.1865 and only a breakout below this zone will put the bears in control over this market for more complex and time-consuming correction. The current market conditions are oversold at the hourly time frame, but the momentum is still pointing to the downside.
Market Snapshot: USD/JPY rebounds from lows
The evaporation of the geopolitical risk premium illustrates the fact that the price of USD/JPY rebounded sharply from the lows at the level of 108.27 and broken back above the technical resistance at the level of 109.84. The 150 pips move up might now target the area of important technical resistance, that lies between the levels of 110.61 - 111.04.
Market Snapshot: Crude Oil breaks through 50% Fibo
There is a sharp reshuffle accompanying Hurricane Harvey on the energy commodity market. These include the chaotic and sharp fall in Crude Oil below the 505Fibo at the level of $46.23. Currently, the price is trading in a narrow range in oversold market conditions and the next technical resistance is seen at the level of $47.22.
