Trading plan for May 18

On Wednesday, the US dollar index failed to close at $93.50 but still ended the trading day close to that level – at $93.30. Thursday trading does not differ a lot. The US dollar index is in a range of 93-93.50.

Political events have highly affected the Thursday’s trading.

The volatility rises in the pound. Uncertainties on the Brexit deal are expanding. There were reports that the UK is ready to stay tied to the customs union beyond 2021. Then, however, British Prime Minister Theresa May said on Thursday that Britain will leave the customs union after all. Earlier GBP/USD managed to test the area above two important levels – the pivot point at 1.3540 and 200-day MA at 1.3550. Up to date, the pound is below these levels. On H1, we can see that the pound is swinging between 1.35-1.3550. Changes in the comments on Brexit and the rising greenback may put pressure on the pound. If GBP/USD closes below the pivot point, there is a risk of a pullback to 1.3450.

Let’s look at the Canadian dollar. On the one hand, oil’s rise is supporting the Canadian dollar. On the other hand, a great rise of the USD puts pressure on it. On Wednesday, the Canadian dollar showed a significant rise against the USD. However, Thursday is not so successful for the loonie. Bulls and bears are fighting, so the pair is sliding between 1.2740-1.28. If USD/CAD closes above 1.28, the next aim is at 1.2840. Whether USD/CAD will not be able to close above that level, a fall to 1.2740 may be anticipated. On Friday, traders will look at CPI and core retail sales. The forecast is positive. Greater actual data may pull the USD/CAD pair down again.

The Australian dollar is under the pressure. Positive employment’s data supported the aussie. As a result, it managed to reach the level of 0.7545. However, trade wars’ tensions are expanding putting pressure on the Australian dollar. Japan is ready to inform the WTO that it is ready to retaliate against US tariffs. Moreover, there are uncertainties on US-China negotiations that are continuing in Washington. As a result, the aussie is coming back to the pivot point at 0.75. If AUD/USD closes below 0.75, there is a risk of the fall further fall to 0.7450. If the aussie stays above the pivot point, there are chances for the Australian dollar.

Thank you for your attention!

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