07.02.201909:05 Forex Analysis & Reviews: Trading plan for 07/02/2019

Trading plan for 07/02/2019:

All eyes on GBP today.

After Wednesday's USD rise today in Asia, fluctuations are limited. The exception is NZD, which was precipitated by a disappointing report from the labor market.

Fed President Jerome Powell answered questions at a meeting with lecturers in Washington. However, the global investors not received any interesting references. Powell said that the economy is in a "good position" with low unemployment and inflation close to the 2% target. At another event, Fed member Quarles said the prospects for the US (they are still very solid).

On the stock market, we have a correction day of recent increases, though still without China. Japanese Nikkei225 drops 0.6 percent, continuing the Wall Street drops, where the SP500 lost 0.22 percent.

On Thursday, the 7th of February, the main event of the day is the Bank of England interest rate decision, together with asset purchase facility decision and monetary policy summary release, so it is a big day for GBP. The other important data will be released from the US in form of Unemployment Claims and Continuing Claims.

NZD/USD analysis for 07/02/2019:

The report from the New Zealand labor market was disappointing. In the fourth quarter, the unemployment rate rose to 4.3% from 3.9% (against 4.1%). The employment growth amounted to a poor 0.1% q/q (0.3 percent threshold).

Let's now take a look at the NZD/USD technical picture at the H4 time frame. The market has been falling for a while and the key technical support at the level of 0.6801 had been violated with great momentum. The double Three Red Soldiers candlestick pattern has been made on the way down and the price has hit the next technical support at the level of 0.6742 in extremely oversold market conditions. Currently, there is a chance for a local correction that might hit the level of 0.6801 in order to test it from below. The other scenario is the straightforward move down towards the key technical support at the level of 0.6693.

Trading recommendations:

All open sell orders should be partially closed at the current price levels ( 0.6748) and the remaining rest should have the protective stop loss placed just above the level of 0.6811. There is still a chance the market will go towards the level of 0.6693 and this should be the level to close all sell orders on this pair for now.