Core durable goods orders for the month of July improved by 1.5% beating economists’ expectation of a 0.4% rise and came as a boost after the Fed remarked that the sales of core equipment were still soft and needed a shift of demand. This will ultimately mean that sale of equipment will rise for the second consecutive month-this being the first time since January 2015 and also signal booming businesses for shipping firms which has of late saw declining bookings for the last 3 months. With these news and coupled with good unemployment claims data, the NZD shed about 30 pips after the release but rose steadily in the NY and Asian sessions.
Our aim today is to check out today’s highlight which will be Yellen’s speech at Jackson Hole-this will be at 1400 GMT but before that we shall have second quarter’s Preliminary GDP forecasted to drop to 1.1%-this will be released at NY open.
To the charts and my plan is to wait till the NY session to initiate short positions just before Yellen Speech provided there are good short signals in the stochastics at the 15 min chart. In the 4HR chart, I can observe some bear divergence though price rebounded at the support strongly and closed above 0.731. Price action is still hovering around that price range.
Today the most likely trade plan is to short as follows:
Sell Limit: 0.7315-0.7335 around the 23.6 and 38.2 Fibonacci levels from yesterday’s Hi-Lo
TP: 0.72-remember this is the highlight of the week and lots of volatility is expected.
Have a good trading day and a nice weekend.