Trading plan for 16/02/2018

Asia is continuing the holiday break, so the market participants can observe further weakening of the USD and sustaining increases in the stock market. EUR/USD hit 1.2450, USD/JPY went down to 105.50. AUD is also very strong. The weakness of the dollar supports increases in gold and crude oil prices.

On Friday 16th of February, the event calendar is light in important news releases, but the market participants should keep an eye on Retail Sales With Auto Fuel data from the UK, Building Permits and Housing Starts data form the US and Foreign Securities Purchases and Manufacturing Sales from Canada.

AUD/USD analysis for 16/02/2018:

The speech of the president of the RBA to the Australian parliament did not bring new information. Phillip Lowe repeated that "he sees no basis for adapting policy in the near future", although less monetary stimulation "at some stage will be appropriate".

Let's now take a look at the AUD/USD technical picture at the H4 time frame. AUD accepted the comments neutrally, but the general weakness of the USD helped in the increase of AUD / USD to 0.7980, which is just below the 61% Fibo of the previous swing down. Moreover, there are two more important technical levels at 0.8004 and 0.7987, which make this zone a tough one to break. Please notice the overbought market conditions, it might suggest a corrective pull-back towards the level of 0.7934.

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Market Snapshot: SPY broke above last leg high

The price of SPY (SP500 EFT) has broken above the level of 272.32, which was the last swing down high. Currently, the market is moving forward towards the next technical resistance at the level of 275.27, accompanied by the strong upward momentum. Nevertheless, the market conditions are beginning to look overbought.

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Market Snapshot: DAX still undecided.

Unlike the rest of the global indices, the price of German DAX index is still undecided whether it should go higher or lower, so it keeps hovering inside of a corrective zone between the levels of 11,995 - 12,503. Nevertheless, the markets is trying to bounce from the oversold conditions, so if the DAX will take some clues from global indices like SPY, the test of the higher levels is still very possible.

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