Trading plan for 12/10/2017:
At night the US Dollar loses to other major currencies. EUR/USD continues to climb in the direction of 1.19, but the scale of the Euro strengthening is the smallest among the major currencies. USD, AUD and NZD are the strongest against USD. USD/JPY is maintained between 112.00 and 112.50. The Wall Street opens with modest gains, so buyers are also setting the tone in Asia.
On Thursday 12th of October, the event calendar is busy with important news releases. During the London session, the UK will post BoE Credit Conditions Survey data and Eurozone will reveal Industrial Production data. During the US session, Canada will post New Housing Price Index data and the US will release PPI data, Unemployment Claims and Continuing Claims data and Crude Oil Inventories data. Plenty of speakers will be active during the US session: ECB President Mario Draghi, FOMC Member Lael Brainard and Jerome Powell, BOC Senior Deputy Governor Carolyn Wilkins and MPC Member Andy Haldane.
EUR./USD analysis for 12/10/2017:
The Eurozone Industrial Production data are scheduled for release at 09:00 am GMT and market participants expect an increase from 0.1% to 0.6% on a monthly basis. The industrial sector contributes to only a quarter of the Eurozone GDP. However, most variations in the GDP come from the industrial sector, whereas other sectors that contribute far more to national output historically have been very consistent regardless of economic cycles. Even with the steady pace of growth that can be observed in the Eurozone currently, the industrial production is in a clear downtrend since its peak in 2016, so even the figures slightly better than expected will not be enough to pick up the output.
Let's now take a look at EUR/USD technical picture on the H4 time frame. The price has hit the 61% Fibo at the level of 1.1876 which is just above the technical resistance at the level of 1.1861. Due to the overbought market conditions, there are some chances for a reversal at the current level and a corrective move towards the nearest technical support at the level of 1.1829 and below. Moreover, this view is supported by a possible Dark Cloud Cover candlestic formation which is still in progress now and needs a close near to the bottom of the current candle to trigger the downside move.
Market Snapshot: Gold at 38%Fibo
The price of Gold has retraced 38% of the previous swing down and it is currently trading at the level of $1,297 in overbought market conditions. There is a visible bearish divergence between the price and the momentum oscillator which supports the bearish short-term outlook.
Market Snapshot: Crude Oil in a narrow zone before the data
The Crude Oil Inventories data are scheduled for release at 03:00 pm GMT and the market awaits the data release as it is trading in a narrow horizontal zone between the levels of $50.60 - $51.41. The market conditions are somewhat overbought, so worse than expected data might pushe the price below the immediate support at the level of $50.20 towards the next technical support at the level of $.50.00.
