Trading plan for 18/01/2018

The Asian part of the session was marked by the growing US Dollar weakness across the board. Only the Canadian Dollar was behaving relatively neutral to USD and finished the night at -0.1%, and that was only because of comments made by Donald Trump about the renegotiation of NAFTA decisions. The Reuters agency clearly draws attention to the rather aggressive approach of the US president to talks, as the baseline scenario is the break of the trade pact with Mexico and Canada.

On Thursday 18th of January, the event calendar is busy with many important economic releases. The Chinese (GDP) and Australian (Employment Change) data are now done, so what's left are Canadain data (ADP Non-Farm Employment Change) and US data (Building Permits, Housing Starts, Philly Fed Manufacturing Index, Unemployment Claims and Crude Oil Inventories).

AUD/USD analysis for 18/01/2018:

The recently released data package from the Chinese economy did not disappoint those who expected slightly stronger economic growth in the last quarter of last year. Read at 6.8% y/y (consensus: 6.7 percent) is only partly due to stable trends in industrial production. It should be remembered that the authorities of China are artificially maintaining a substantial GDP dynamics due to above-average high infrastructure expenditures, which is to compensate for the side-effects associated with moving towards the service model of the economy.

The biggest winner of yesterday data from the labor market partly turned out to be the Australian Dollar (0.1%). The significant change in employment (34.7k, consensus: 15k) effectively eliminated the higher unemployment rate, which increased to 5.5% against the previously reported 5.4%. (consensus: 5.4%).

Let's now take a look at the AUD/USD technical picture at the H4 time frame. The market made another marginal higher high at the level of 0.8022, but the bulls did not manage to break out of the ascending channel. After the spike up the price reversed and now is back in the consolidation zone. The nearest technical support is seen at the level of 0.7935 and it might be tested soon as the growing bearish divergence supports the downward bias.

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Market Snapshot: Gold breaks below the support

The price of Gold has broken below the technical support at the level of $1,331 and now is testing another technical support at the level of $1,322.The momentum looks weak and the market seems to be finally reacting to the bearish divergence between the price and momentum. In a case of the drop extension, the next support is seen at the level of $1,313.

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Market Snapshot: SPY made a Double Top?

The price of SPY (SP500 ETF) did not manage to break out above the all-time high at the level of 280.10 and made a possible Double Top formation. If this will turn out to be the top for this market, then the price must break through the golden trend line support now. Clear bearish divergence supports the negative outlook.

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The material has been provided by InstaForex Company - www.instaforex.com