03.01.201811:44 Forex Analysis & Reviews: Trading plan for 03/01/2018

The market catches its breath after Tuesday's dollar sell-off which was later retained with the help of the US government bond yield jump. The lack of investors from Japan is conducive to lowering volatility. There is a green color on the stock market in Asia, Shanghai Composite gains 0.6% and Hang Seng grows by less than 0.1%. Oil prices are in a flat drift; gold goes back from the top.

On Wednesday 3rd of January, the event calendar is quite busy with important news releases. Germany will post its Unemployment Rate data, the UK will present Construction PMI data and the US will post ISM Manufacturing PMI data and FOMC Meeting Minutes.

EUR/USD analysis for 03/01/2018:

The Unemployment Rate data from Germany did not surprise the market participants as it was in line with expectations for 5.5%. On the other hand, the Unemployment Change (the change in the number of unemployed people during the previous month) was bigger than estimates of -13k, because the number released was at the level of -29k (-20k prior). However, the numbers are still very good and the sentiment towards the European job market continues to improve.

Let's now take a look at the EUR/USD technical picture on the H4 time frame. The market has hit the level of 1.2085 before the price made a pull-back towards the level of 1.2034. The market is currently consolidating the recent gains in a horizontal move, but the overbought conditions and clear bearish divergence are making the price susceptible to move lower towards the next technical support at the level of 1.2003.

Market Snapshot: Gold makes reversal candlestick formation

The price of Gold has hit a new local low at the level of $1,320 and then reversed after making the Dark Cloud Cover candlestick formation. Currently, the price is still trading below the local resistance at the level of $1,315 and there is still a chance for a test of the nearest technical support at the level of $1,305.

Market Snapshot: USD/JPY close to the range support

The price of USD/JPY has failed to break through the technical resistance at the level of 113.74, so it reversed towards the important technical support at the level of 112.02. The level has not been fully tested yet, but the breakout below the golden trend line and moving average indicates a further weakness in this pair.