Trading plan for 15/09/2017:
Another North Korean rocket test for several hours dominated the financial markets. The ballistic test, in which the missile flew over the Japanese island of Hokkaido, does not escalate tensions in the eyes of investors as it does not bring the conflict to a new level. Such an assessment is confirmed by the stable exchange rate of Gold and the predominance of buyers on Asian stock exchanges. USD/JPY is also catching up quickly and is almost 100 pips higher at 109.50. GBP/USD goes above 1.3400, EUR/USD is at 1.1910
On Friday 15th of September, the event calendar is light in an important news release, so only during the US session, some data will be posted, like Retail Sales, Empire State Manufacturing Index, Industrial Production, Business Inventories, and Preliminary UoM Consumer Sentiment.
GBP/USD analysis for 15/09/2017:
Yesterday, the Bank of England decided to leave the interest rate unchanged at the level of 0.25%, together with Asset Purchase Facility at the level of 435Bln. There was a 7-2 vote for the decision which was also in line with consensus forecasts from a 6-2 vote at the previous meeting. McCafferty and Saunders again voted for an immediate increase in rates to 0.50%. In the official statement, BoE said, that it sees the potential for interest rates to increase within the next few months if the economy grows as expected and underlying price pressures rise. Moreover, all MPC members also judged that policy should be tightened faster than the market expects. The BoE inflation expectations were raised to over 3.0% in October. In conclusion, the overall rhetoric was way more hawkish than expected, so the expectations for a future interest rate hike has made the British Pound to rally across the board.
Let's now take a look at the GBP/USD technical picture on the H4 time frame. The price bounced from the lower line of the golden channel and rallied up towards the daily time frame technical resistance at the level of 1.3450. Currently, the zone between the levels of .13250 - 1.3270 will act as a technical support for bulls. It is worth to notice, that the market conditions are overbought and there is a visible bearish divergence between the price and the momentum indicator. The nearest support is seen at the level of 1.3327.
Market Snapshot: Gold approaching trend line
The price of Gold moved further away from the recent swing high at the level of $1,357 and currently is approaching the long-term navy trend line around the level of $1,311. Any breakout below the gray area between the levels of $1,298 -$1, 308 would confirm the top in Gold at the level of $1,357 and further decline towards the level of $1,280.
Market Snapshot: USD/CAD in horizontal correction
The price of USD/CAD has made another marginal lower low at the level of 1.2061 and since then the price is moving in a sideway channel between the levels of 1.2090 - .12230. This looks like a technical bearish flag pattern, which is a trend continuation sign. To change this bias, the bull camp would have to break out above the key technical resistance zone at the level of 1.2440.
