Trading plan for 02/01/2018

The weak position of the US Dollar remains at the start of 2018 as the EUR/USD went just above 1.20, improving the 3.5-month peaks. Only Japanese Yen slightly loses to USD, although the exchange rate does not go beyond the Friday fluctuation range 112.50-112.75. AUD, NOK and NZD are higher as well, supported by rising raw material prices. Good data from China helps the local stock market. Gold and oil are high.

On Tuesday 2nd of January 2018, the main event of the day is the release of PMI Manufacturing data from across the Eurozone ( Germany, Spain, Italy, France), UK and the US as well.

EUR/USD analysis for 02/01/2018:

The market participants expect the PMI Manufacturing data to be released at least in line with the previs figures, or better. Any worse than expected data might start to weight on Euro. Just after the start of the European part of the session, there is an attempt to permanently eradicate the EUR / USD highs of September 20 (1.2033), which will undoubtedly increase the chance of attacking August's highs at 1.2070. The exemplary scenario is being currently supported by the momentum, although one should bear in mind the possibility of reversal due to the scale of the rally. In the case of breakthroughs of Friday lows (1.1937), an attack on the broken line connecting the peaks (1.1880) can be expected (Golden trend line). The nearest technical support is seen at the level of 1.2003 and 1.1961.

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Market Snapshot: Gold has broken above the technical resistance

The price of Gold has violated the important technical resistance zone between the levels of $1,298 - $1.305 and now is heading higher towards the level of $1,315. The market conditions are now extremely overbought at the H4 time frame, so the correction towards the technical support at the level of $1,298 is now expected.

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Market Snapshot: Crude Oil is still trading high.

The price of Crude Oil does not stop to rally higher and had gapped up after the weekend to the level of 60.90. The momentum remains strong, but the clear bearish divergence between the price and momentum indicator together with overbought market conditions at the H4 time frame might indicate a correction towards the technical support at the level of 60.00 soon.

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