Trading plan for 13/09/2017:
The overnight trading session in Asia was dominated by supply after the Wall Street indices made a decent set of gains and new all-time highs: S&P 500 climbed 0.3%, with new Dow Jones indexes closing at 0.3% and the Nasdaq 100 at 0.3% as well. On the currency market, Pound Sterling (0.2%) is trying to keep the GBP/USD exchange rate above the key 1.3300 level.
On Wednesday 13th of September, the event calendar is quite busy with various economic releases. During the London session, Germany and Spain will post Final Consumer Price Index data and the Eurozone will present Employment Change and Industrial Production data. The UK will reveal Unemployment Rate, Claimant Count Change, and Average Earnings Index data. Later on, the US will post PPI data.
GBP/USD analysis for 13/09/2017:
The Unemployment Rate, Claimant Count Change, and Average Earnings Index data from the UK are all scheduled for release at 08:30 am GMT. Market participants expect the Unemployment Rate to be left unchanged at the level of 4.4%, Claimant Count Change is expected to increase 0.8k after a -4.2k drop a month ago and Average Earning Index is expected to increase from 2.1% to 2.3% on a quarterly basis and from 2.1% to 2.2% on a yearly basis. Market participants expectations are pretty high, but after yesterday's inflation data that beat the market consensus significantly (0.6% vs. 0.5% expected, -0.1% prior) the investor's enthusiasm and positive approach might be understandable. The inflationary pressures are accelerating faster than forecasts and clearly exceed the Bank of England's target projections. It is no wonder that there is a chance that Haldane will join on Saunders and McCafferty on Thursday Bank of England monetary policy meeting. In this situation, hopes for an interest rate hike are rising and the British Pound is gaining across the board.
Let's now take a look at the GBP/USD technical picture on the H4 time frame. The price has broken above the technical resistnace at the level of 1.3267 after the better than expected data were released and currently is consolidating the gains in overbought market conditions. There is a first clue that a bearish divergence is forming between the price and the momentum oscillator, but as long as the price is above the level of 1.3165 the short-term bias stays bullish.
Market Snapshot: SPY gaps up to all-time highs
The price of SPY (SP500 ETF) has stepped up towards new highs at the level of 249.20 The market is trading in overbought conditions on an hourly time frame, but is still above all of the moving averages and is now consolidating the gains. There are the first signs of developing bearish divergence between the price and momentum oscillator, so the internal correction might be deep enough to fill the gap (marked as a gray rectangle). The longer-term bias remains bullish.
Market Snapshot: DAX30 retracing 61% of the previus swing
The price of German DAX30 index is rallying up and it has retraced 61% of the previous swing down already. It is worht to keep an eye on the level of 12 538 as this migth be the level where the bears will come to cap the rally.The next techncial resistnace zone of importance is seen at the level of 12,620 - 12,675.
