Trading plan for 20/09/2018

Markets remain on edge amid escalating trade tensions on the US-China line, although at night in the major currency group there are no major changes. EUR / USD stopped near 1.1680, USD / JPY dropped to 112.20, and GBP / USD fluctuated around 1.3140. The most violate currency of the night session is the New Zealand dollar, which spiked up after the excellent GDP results, although it was not without a small scandal.

On the stock market, traders observed minimal increases, and the last rally lost momentum. Japanese Nikkei225 grows 0.2%, and the Chinese Shanghai Composite is barely above the line. WTI oil is growing today by 0.7% up to 71.6 USD / b, while Brent gains 0.4% up to 79.7 USD / b., continuing increases from Wednesday after good data from US inventories, which showed a fall in crude oil and gasoline inventories.

On Thursday, the 20th of September, the main event of the day is the Swiss National Bank Libor Rate decision, together with 3-Month Libor Upper Target Range, 3-Month Libor Lower Target Range and SNB Monetary Policy Assessment. The other important data scheduled for release are Retail Sales from the UK, ADP Non-Farm Employment Change from Canada and Philadelphia Fed Manufacturing Index from the US.

NZD/USD analysis for 20/09/2018:

After midnight, the New Zealand’s GDP for the second quarter was published. The market participants expected an increase of around 0.8% q / q, which would still be a great result after the first quarter of this year (+ 0.5%). The result, however, took everyone by surprise as the New Zealand economy rose by 1.0% in the second quarter. On the yearly basis, the GDP growth in New Zealand in the second quarter fell above forecasts at 2.8% y / y vs 2.5% in the forecast. Strong reading removes the probability of OCR reduction by the RBNZ in November.

However, controversy arose around the publication of the reading. People gathered in the New Zealand statistical office got to know the GDP result a minute earlier than the rest of the market. This means that some financial media, economists and banks could benefit from the acquired knowledge and enter positions. The phone was blamed on the office member’s phone, which was allegedly badly synchronized with the main system computer. You could earn a lot from this error because the New Zealand dollar was more expensive than the American one by about 50 pips. This currency is a definite winner of the Asian session.

Let’s now take a look at the NZD/USD technical picture at the H4 time frame. The market has broken through the 61% Fibo retracement of the previous swing down at the level of 0.6638 and currently is heading higher towards the next technical resistance at the level of 0.6681. The key technical resistance is still located at the level of 0.6724 and only a clear, impulsive breakout through this level would have changed the current bias from bearish to bullish. The immediate support is seen at the level of 0.6631 and 0.6620.


The material has been provided by InstaForex Company –