Trading plan for 27/07/2017:
The Asian session was dominated by a weakness of the US Dollar, which was under pressure from the FOMC yesterday. In the morning, the EUR/USD pair managed to break through its local highs, but currently the rate returns from 1.7777 to around 1.1715, thus returning to levels from yesterday's closing. Wall Street rallied were led by Dow Jones (0.5%) and Nasdaq 100 (0.3%). Stock market optimism on Asian markets breaks out the Shanghai Composite Index, which loses 0.1%.
On Thursday 27th of July, the event calendar is light in important economic releases, but the market participant will pay attention to Durable Good Orders and Unemployment Claims data from the US.
EUR/USD analysis for 27/07/2017:
The Durable Good Orders and Unemployment Claims data are scheduled for release at 12:30 pm GMT and the market participants expect an increase in orders from the level of -1.1% to 3.5% on monthly basis and from 0.1% to 0.4% on yearly basis. If the data will be released in line or better than expected, then it will be considered as an encouraging change in the trend for durable goods orders, because the year-over-year change for orders is due to surge to a three-year high. This optimistic forecast is being backed up by the survey data for July, which an acceleration in orders. This month's flash reading of the US Manufacturing PMI increased to 53.4 points, a four-month high that signals a moderate pace of economic activity for the sector. IHS Markit noted on Monday that new orders for companies posted the strongest print in six months.
Let's now take a look at the EUR/USD technical picture at the H4 timeframe. After the FOMC Interest Rate Decision yesterday, the price has broken above the technical resistance at the level of 1.1714 and made a new local high at the level of 1.1776. Currently, the market is testing this level as it will now act as a technical support, so better than expected data from the US economy might help to violate this level and move lower towards the next technical support at the level of 1.1654.
Market Snapshot: Gold back above $1250
The price of Gold has broken above the technical resistance at the level of $1258, which is just below the 61%Fibo at the level of $1260. The odds for a downside pull back are quite high, due to the visible bearish divergence and overbought market conditions.
Market Snapshot: USD/CHF bounces from multi-month support
The price of USD/CHF had hit the technical support at the level of 0.9442 and now is trying to bounce higher towards the next technical resistance at the level of 0.9641. Only a sustained breakout above this level will give a chance to bulls to take back the control over this market. Otherwise, the near-term outlook is still bearish.
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