Trading plan for 21/02/2018

The US Dollar bounce remains the theme of this week, although the Asian session does not bring major changes. The activity focused only on USD/JPY and AUD/USD - in both cases part of the blame may lie on the side of local data. The stock market is green. Commodities fall under the weight of the Dollar.

On Wednesday 21st of February, the main event of the day is FOMC Meeting Minutes release, but the global investors will keep an eye on Flash PMI Services, Manufacturing and Composite reading from across the Eurozone, Claimant Count Change, Unemployment Rate and Average Earnings Index data from the UK, together with Inflation Report Hearings and Mark Carney speech. In the US the important data to keep an eye on are Existing Home Sales and Flash PMI's.

DXY analysis for 21/02/2018:

The most important item in today's calendar will be the minutes from the FOMC meeting, which will outline the mood in the Fed. Nonetheless, the March interest rate increase seems to be safe as the new FOMC Chairperson Powell is known to be a hawk. Recent solid data, including job and inflation, are justifying the case for three rate hikes this year, and markets would now want to see if more board members are starting to considering four hikes.

Let's now take a look at the US Dollar Index technical picture at the H4 time frame. The market has managed to break out above the technical resistance at the level of 89.63 as the rebound continues (now support). The next target is the level of 90.11 and then the key technical resistance, the level of 90.59. Stong momentum and uprising stochastic indicator support this view.

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Market Snapshot: DAX still under the resistance

The price of German DAX index is third time testing the technical resistance at the level of 12,503 and the market conditions will soon become overbought. Only a sustained breakout above this level would open the road towards the next technical resistance at the level of 12,676.

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Market Snapshot: Gold falls further

The price of Gold has broken below the black trendline support around the level of $1,331 and it looks like it will continue the fall towards the level of $1,322 and even $1,313. The RSI indicator stays below its fifty level, so the negative outlook is being supported.

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