FX.co ★ Trading plan for 22/02/2017

Trading plan for 22/02/2017:

On Wednesday 22nd of February, there will be many economic releases during the European and American trading sessions and the main focus will be on German Ifo data, second estimate GDP from the UK. CPI data from the Eurozone and finally FOMC Meeting Minutes release during the US trading session.

EUR/USD analysis for 22/02/2017:

All three Ifo sentiment data releases will be important for this pair today. However, the market participants do not expect any upbeat data from Germany this month, so any numbers better than the highlight will cause an increased volatility on the EUR/USD exchange. Please remember that later on (07:00 pm GMT) there is FOMC Meeting Minutes release that will affect this pair as well, so any price fluctuations during the earlier hours might be just a market positioning itself ahead of the more important data.

The technical picture for EUR/USD looks bearish and this pair has just violated the support at the level of 1.0519 and it is currently trading in oversold market conditions. This is why any better than expected data from Germany and the Eurozone might cause a relief rally towards the next resistance at the level of 1.0555. Nevertheless, any hawkish comments or remarks from FOMC meeting will likely cause a further sell of continuation towards the levels of 1.0452 and 1.0339.

GBP/USD analysis for 22/02/2017:

The second estimate GDP from the United Kingdom for the 4 quarter is expected to be in line with the previous month numbers. The 0.6% GDP increase for the fourth quarter and 2.2% increase on a year-to-year basis still looks better than most of the Brexit supporters anticipated.

At the GBP/USD H4 time frame chart the price just got back to the trading range after a false break out towards the level of 1.2523. This means the triangle pattern will get even more complex as the market participants are waiting for the news to spark the rally or a sell-off. Any violation of the level of 1.2347 opens the road towards the next technical support at the level of 1.2251 and any violation of the level of 1.2523 opens the road towards the next technical resistance at the level of 1.2581.

Market snapshot - SP500 closed on another all-time high

The SP500 EFT called SPY has closed its daily candle at the level of 236.42 yesterday, which is another all-time high. The index is currently trading in the oversold market conditions, but there is still no indication of a trend change. All of the moving averages are below the current price, no market-reversal candlestick pattern has occurred. This is a textbook example of a bull trend and there is no reason to short this market yet.