Trading plan for 05/02/2018

The US Dollar stabilized after Friday's increases caused by the better-than-expected US labor market report.The stock market has bigger problems because higher wages mean a revival in inflationary pressure and more active Fed in interest rate hikes. The SP500 fell on Friday by 2.54% and gave a signal for sales in Asia. Japanese Nikkei 225 lost 2.55% and Hang Seng fell by 1.1%. Crude oil is losing 1.0%, Gold without major changes.

On Monday 5th of February, the event calendar is dominated by PMI Services and Composite releases from across the Eurozone, UK, China, Japan and the US. Moreover, the US release ISM Non-Manufacturing PMI data in the afternoon as well.

EUR/USD analysis for 05/02/2018:

The NFP report from the US labor market brought positive surprises on the employment and wages side with revisions upwards in December. Employment in the non-agricultural sector increased by 200,000 versus 166,000 a month earlier. The market expected 180,000. Wages increased by 0.3% m/m, by 0.1% point harder than expected. December data improved to 0.4% from 0.3%. The unemployment rate remained stable at 4.1%. The initial reaction for data was bearish but then stabilized and currently, the price has returned to the consolidation zone.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The price is trading under the golden trend line in around the level of 1.2472 with the neutral momentum (hovering around its fifty level). The nearest technical resistance is seen at the level of 1.2522 and the nearest technical support is seen at the level of 1.2408. Maybe there will be more volatility after the news will get released. The overall trend remains up.

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Market Snapshot: SPY deepens the drop

The price of SPY (SP500 ETF) has felt out of the golden channel and retraced over 50% of the recent swing up. The move down looks very sudden and aggressive and so far there are no signs of a trend reversal. The nearest support is seen at the level of 275.27, the 61% Fibo is seen at the level of 274.59 and the nearest technical resistance remains at the level of 278.06.

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Market Snapshot: DAX follows the SPY

The price of German DAX Index has been following the other world indices and today it opened gape down at the level of 12,676. The black trend line acted as a dynamic support for the price, otherwise, it would possibly fell even more. Currently the price is trying to close the gap and hit the level of the Friday low at 12,782.

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