Trading plan for 26/09/2017:
The risk appetite after yesterday’s escalation of tensions between the US and North Korea remains subdued. USD/JPY is around 111.50 and EUR/USD continues to break through zone 1.1830- 1.1860. The Euro, the Pound, and the Australian Dollar did not change their value overnight against the US Dollar. NZD / USD deepens post-election slumps and drops below 0.7250 after the index of business sentiment has climbed to its lowest level in two years. On Wall Street’s down session, with particular pressure on the technology sector (Nasdaq100 fell 1.1%)
On Tuesday 26th of September, the event calendar is light in important news releases, but market participants will keep an eye on CB Consumer Confidence and New Home Sales data from the US. Later during the day, we have FOMC members speeches: Loretta Mester, Lael Brainard, and Federal Reserve Chairperson Janet Yellen as the last one.
EUR/USD analysis for 26/09/2017:
The CB Consumer Confidence Index data is scheduled for release at 02:00 pm GMT and market participants expect a three-point decrease from 122.9 to 119.9 points. The economists say the indicator should fall in tandem with the recent preliminary Michigan Consumer Confidence figures. Nevertheless, despite the fall, both indicators will still be at very high levels, indicating continued support for consumer spending.
In Germany, Chancellor Angela Merkel from conservative CDU will have a hard time forming a stable coalition. The Social Democrats were heavily defeated and said they would go into opposition. Merkel’s only realistic option is, therefore, to form a coalition with the Greens and the liberal FDP. Making things even more complicated, she also needs to find good terms with her sister party CSU, which only exists in Bavaria and by many commentators is said to be the real troublemaker in the potential coalition.
Let’s now take a look at the EUR/USD technical picture on the H4 time frame. The price is trading directly on the important technical support at the level of 1.1821 and it looks like the bears might push the price even lower as the momentum indicator is pointing downward. The next technical support is seen at the level of 1.1775.
Market Snapshot: Crude Oil hits three months high
The price of Crude Oil rallied yesterday to hit three months high at the level of 52.41. The technical resistance at the level of 52.00 was violated and now it will act as a support for the price. Both indicators show, that the price is trading in overbought market conditions with strong upward momentum. In a case of a breakout lower, the next important support is seen at the level of 50.80.
Market Snapshot: DAX reverse time?
After the violation of the golden trend line, the price of German DAX30 rallied towards the important technical resistance at the level of 12,620 — 12,675. Currently, the market conditions are overbought and the long shadows on daily candles are indicating, that the selling pressure grows. In a case of reversal, the next technical support is seen at the level of 12487.