Trading plan for 23/03/2017

Trading plan for 23/03/2017:

Volatility has subsided in the face of Trump’s first vote in the House of Representatives. EUR/USD is under the resistance of 1.0830. The strengthening of the yen against the dollar has slowed near 110.70 and currently, the rate is about 60 pips higher. AUD/USD remains at 0.7700 and the Australian Dollar is the worst performing G-10 currency. The SP500 ended the session above the bar, similarly to the Nikkei 225. The WTI oil price continues to recover and is heading for $48.50. Gold is trading at its minimums, but an ounce still costs almost $1,250.

On Thursday 23rd of March, the event calendar is bereft of important macroeconomic news, but global investors will keep an eye on Retail Sales with Auto Fuel data from the UK and Unemployment Claims data from the US. The Federal Reserve Chairperson Janet Yellen speech will get some attention as well.

GBP/USD analysis for 23/03/2017:

The Retail Sales report for the UK is scheduled for release at 09:30 am GMT and it will be a topical release in the wake of this week’s news of stronger-than-expected inflation. The market participants expect 0.4% increase in sales on month-to-month basis and 2.6% increase on yearly basis. Moreover, Tuesday’s better-than-expected inflation report for February has raised new questions about the Bank of England’s policy to delay raising interest rates as the increases pushed inflation over the BoE’s 2.0% target.

Let’s now take a look at the GBP/USD technical picture at the H4 time frame. The bulls have managed to break out above the technical resistance at the level of 1.2505, but the H4 candle closed on its bottom, signaling a failure to rally higher. Worse than anticipated data might spark the sell-off and the price will likely test the next technical support at the level of 1.2437.The overbought trading conditions and clear bearish divergence supports this view.

EUR/USD analysis for 23/03/2017:

The Unemployment Claims from the US are scheduled for release at 12:30 pm GMT and the market participants expect virtually no change in the number of unemployed people in the US. Just like a week ago the expected number is at the level of 240k. If the job market data will still provide good numbers, then the probability of another interest rate hike will increase.

Let’s now take a look at the EUR/USD technical picture at the H4 time frame. The bull camp has managed to retrace almost 100% of the previous swing down, but they failed to break out above the level of 1.0828 so far. The overbought trading conditions and a clear bearish divergence indicate an immediate correction to develop in this market. Only worse than expected data from the US would have made the price to rally above the technical resistance at the level of 1.0828, otherwise, the bias is to the down side. The next technical support is seen at the level of 1.0726.

Market snapshot – Gold retraced 78% of the previous swing down

The gold prices are trading at the level of $1,248 which is the 78%Fibo level of the previous swing down. The golden trend line provides a dynamic support, but the overbought trading conditions and growing bearish divergence between the price and momentum oscillator suggest the corrective cycle is coming soon. Break out below the technical support a level of $1,243 is the first clue that the corrective cycle is in progress.

The material has been provided by InstaForex Company – www.instaforex.com
Source: Instaforex.com