Trading plan for 11/09/2017:
There is slight optimism on financial markets for the North Korean regime to refrain from ballistic testing during the anniversary of the foundation of the state. This translates into the outflow of capital from safe-heaven markets: increases in US debt yields, decrease in Gold prices, a clear appreciation of the US Dollar to Yen and Franc. USD/JPY is growing 0.5% and returned over the level of 108.00, breached on Friday. EUR/USD retreated to 1.20, GBP/USD is trading at 1.3175.
On Monday 11th of September, the event calendar is light in important news releases, but global investors might pay attention to Industrial Production data from Italy, German Bundesbank Monthly Report, and Housing Starts data from Canada. Fed decision makers can not speak publicly before September's FOMC meeting.
EUR/USD analysis for 11/09/2017:
Due to a lack of important news release, the market attention today will focus on North Korea and Hurricane Irma in Florida.
The financial markets took a breath of relief after the leaders of the North Korean regime have not decided on yet another ballistic launch to celebrate the anniversary of the founding of the People's Democratic Republic of Korea. Investors prepared for a show of strength, but instead, Kim Jong-Un served a lavish party to their scientists. Nevertheless, this is not the end of the geopolitical uncertanity yet. Today, the UN Security Council will vote on tightening sanctions against North Korea, which may be the result of Pyongyang's response. Moreover, the decision to abandon ballistic missions does not testify to the regime's conciliatory attitude, but is the evidence of its unpredictability. The fact that no ballistic test was conducted on Saturday does not mean that the tests will not be conducted on Tuesday.
Hurricane Irma hit the coast of Florida, but its path leads the western part of the peninsula - not as it was feared over Miami. Wind power is also weakening with every hour - today the disaster has been rated category 2 (yesterday 4, before the hit in Florida - 5). The wind blows at an average speed of over 150 km/h. Information on the extent of damage caused by the disaster will be coming gradually.
Let's now take a look at the EUR/USD technical picture at the H4 time frame. The bulls have managed to violate the recent swing high at the level of 1.2069, but the price failed to move any higher so far. Currently, the market is testing the level of 1.2000 again after a visible bearish divergence between the price and momentum indicator is now in progress. The key support area is the navy trend line support around the level of 1.1950. The level of 1.1829 remains the key technical support.
Market Snapshot: Crude Oil retreats from highs
After hitting the 78%Fibo at the level of $49.38 the price of Crude Oil reversed sharply lower towards the level of $47.22. No new high has been made and the golden trend line has been tested again from below. Due to the fact that the momentum indicator is still below the fifty level, the odds for another leg down are now high. The next technical support is seen at the level of $46.45.
Market Snapshot: GBP/JPY at the key resistance
The price of the GBP/JPY pair has broken above the 38% Fibo at the level of 142.52 and currently is trading just under the key technical resistance below the level of 143.24. Any breakout higher would indicate a test of the 50%Fibo at the level of 143.52 or even a test of the technical resistance at the level of 144.00. No sign of any bearish price developments yet.
