Trading plan for 23/04/2018

Yields of US government bonds are maintaining levels after Friday's rally, which supports USD. Moving on risky assets results in mixed stock market behavior and weakness of commodities, although news related to North Korea and US-China relations are positive. On the Asian stock market, minor declines on the main trading floors: Nikkei -0.3%, Shanghai Composite -0.6%.

On Monday 23rd of April, the event calendar looks busy with the Eurozone Flash PMI Manufacturing and Services data releases, German Buba Monthly Report, Canadian Wholesale Sales data and Existing Home Sales data from the US. Moreover, there is a speech from Bank of Canada Governor Poloz scheduled later in the day.

EUR/USD analysis for 23/04/2018:

A bunch of interesting data was released over the weekend. North Korea announced on Saturday that it intends to suspend the missile program and nuclear tests, which is probably related to the upcoming summit with South Korea (27 April) and the meeting with the USA (the turn of May and June). US Secretary of the Treasury S. Mnuchin is considering a visit to China regarding a trade conflict, but he is "cautiously optimistic" that the agreement will be reached.

On late Friday, information from sources related to the ECB came to the market. According to reports, the latest series of weaker data from the Eurozone does not signal a breakdown in the path of growth and should not affect the ECB's plans to normalize the policy. The members of the Governing Council continue to strive to end the QE program by the end of the year and see the first rate hike in the second quarter of 2019.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. Today. the biggest impact on the rate change might have the Eurozone Flash PMI Manufacturing and Services data releases, which are expected to be slightly lower than a month ago. The EUR/USD reacted negatively on the Friday ECB statements, so the breakout attempt above the level of 1.2413 failed. The price reversed and broke through the supports at 1.2346 and 1.2290 with a low at the level of 1.2248. The market is clearly oversold now and the price might try to move a little bit higher, although it will probably remain within the horizontal range between the levels of 1.2215 - 1.2298. Please notice the triangle technical pattern is forming at this time frame ( continuation pattern), which suggest a possible move upward soon.

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