Trading plan for 30/07/2018:
The new week starts with stable trade, as investors wait with patience for key events and decisions of central banks, and the end-of-month vision also inhibits shopping incentives. USD is in the middle of the rate with the strongest NZD and the weakest AUD, CAD - real proof of the lack of direction. The stock market scores a weaker opening. Oil and gold are stable.
The strongest US economic growth since 2014 in the second quarter was by 0.1 percentage point above the expectations, which does not offer a clear message for USD and hence we maintain volatility ranges from the last dozen or so hours. EUR/USD revolves around 1.1650, and USD /JPY can not break down to 111. More active during Asian trade AUD and NZD send contradictory signals by setting themselves at the opposite ends of the change scale.
The weekend brought also news from Trump's camp. On Sunday, the president said he was open to the so-called government shutdown, if not in his mind will be established immigration law, including financing the wall on the border with Mexico. The current budget expires on September 30 at the end of the tax year.
On Monday the 30th of July, the event calendar is light in important data releases, but the market participants should keep an eye on KOF Economic Barometer data from Switzerland, Net Lending to Individuals data from the UK, CPI data from Germany and Pending Home Sales from the US.
USD/JPY analysis for 30/07/2018:
JPY calmly endures two events from the night and is waiting for tomorrow's decisions after the Bank of Japan meeting. According to one of the news agencies, BoJ will lower its inflation forecasts to around 1.5%. This confirms previous leaks and argues for keeping monetary policy unchanged. The second event was the third auction of the purchase of Treasury bonds by the central bank this month, which may prove BoJ's willingness to rigidly control the market.
Let's now take a look at the USD/JPY technical picture at the H4 time frame. The rally from 110.60 has run out of steam around the level of 111.27, which is just below the intraday internal trend line resistance. The key level to the upside is seen at the level of 111.56 and as long as this resistance is not violated, the outlook remains bearish.
