Trading plan for 12/09/2018
Despite the generally positive mood on Wall Street (SP500 + 0.37%), Asian markets have not decided to maintain their sentiment and are now falling down towards 14-month lows, because the concern over the escalation of the US-China trade dispute is coming up. Chinese Shanghai Composite losing 0.2-0.3% during most sessions, although at the end of the day it tries to bounce back. Japanese Nikkei dropped by 0.3%.
CAD strengthened at night, bringing USD / CAD to 1.3060. NAFTA negotiations are ongoing, but the reports seem positive. US President Trump said that the talks go “very well”. Reuters also reported that Canada is ready to ease its strict rules protecting the dairy sector and allow the US access to this market – one of the key issues during the ongoing negotiations.
On Wednesday, the 12th of September, the macroeconomic calendar may seem not very rich in important data releases, it is worth bearing in mind the situation in Great Britain, where the discussion about Brexit is getting hotter. There have been rumors of plans to remove Theresa May from power. During the European session, we will get inflation data from Spain and the volume of industrial production in the EU. In the afternoon there will be more interesting information about PPI and crude oil inventories in the USA.
EUR/USD analysis for 12/09/2018:
US small business optimism rose to the highest level on record (since the mid-1970s). The yesterday’s data were better than expectations of 108.1 points as the final figure was at the level of 108.9 (survey of small businesses which asks respondents to rate the relative level of economic conditions including labor markets, inventories and sales, capital spending, inflation, earnings and wages, and credit markets). High optimism is generally associated with positive business investment growth and supports our view that the US expansion continues. US equities rallied and the oil price increase fuelled rising yields further.
Let’s now take a look at the EUR/USD technical picture at the H4 time frame. The price failed to break out of the black channel higher line and went back to the channel zone despite the better than expected data (record high in fact). The market conditions are still neutral as the momentum indicator is hovering around its fifty level, so does the stochastic. The nearest technical support is seen at the level of 1.1565 and the nearest technical resistance is seen at the level of 1.1617.