Trading plan for 09/02/2017:
Today there will be a few economic releases, but still two important news releases are scheduled for today that will catch the attention of the global investors, i.e. the Unemployment Claims data from the US and the Governor Mark Carney from Bank of England speech.
01:30 pm GMT - Unemployment Claims from the USA
The labour market's strong rebound in January is expected to receive support in today's weekly report on new filings for unemployment benefits. The market analysts see a slight increase in initial claims from 246k to 249k. The lowest initial claims figure was issued in November last year at the level of 233k. After strong NFP number from last Friday, the US job market looks very solid and today's release of initial claims will likely support this view as any number below 300k will be considered positive for the labour market.
Let's now see how we can trade this news release. The pair that will be affected the most is EUR/USD. Currently it is trading around the intraday resistance at the level of 1.0704. In a case of a better than expected data (less than 249k), the market should spike lower towards the next intraday support at the level of 1.0640. In a case of worse than expected data (more than 249k), the market should break out above the intraday resistance and head towards the level of weekly pivot at the level of 1.0756.
06:30 pm GMT - Governor Mark Carney from Bank of England speech.
Market snapshot: Gold prices at 3-month high
Gold prices rose as US rate hike bets cooled. The projection for the year-end level of the Fed Funds rate fell to the lowest in two months, which caused the US Treasury bond yields and the US Dollar to move down in together. This bolstered the overall risk sentiment and made the yellow metal to climb at the highs this month.
Currently, the gold is trading at the daily technical resistance at the level of $1,240. There is still a potential for higher prices, but the bearish divergence between the price and the momentum oscillator and the overbought market conditions are indicating a temporary correction to come soon. The next support is seen at the level of $1,220 and from this level, the price should bounce towards the $1,276 level.
Market snapshot: GBP/USD is breaking higher from the lows.
Yesterday's comments from the UK Prime Minister Theresa May ("We believe we can, within the 2-year time frame, get the agreement for the withdrawal from the EU and the trade arrangements to ensure we have a strong strategic partnership with the EU in the future") has made the Pound to rally across the board and it looks like the trend will continue today.
The downside risk for GBP/USD looks limited as the Brexit-triggered decline may have run out of momentum. The price is trading within a safe distance from the important technical support at the level of 1.1985 and now the bulls are trying to continue the rally towards the next intraday resistance at the level of 1.2729. Only a sustained violation of the level of 1.2347 would invalidate this scenario.
