Mixed US data and disappointing numbers from the UK and the Eurozone resulted in a dollar rally and risk-aversion at the end of the week (Week 27 - June 29 to July 3). The economic recovery appears to be fizzling out. As such, I am betting that the dollar rally would continue early on the week ahead (Week 28 - July 6 - 10). US Non-Farm payrolls alone might not give investors and traders enough reason to be optimistic. There is also a light array of market-moving US data coming this week which might be a good thing - no critical US data means that we can concentrate on data from other majors. The only significant numbers from the US are the Non-Mfg PMI (Monday, 10 pm) and Trade Balance (Friday, 8:30 pm).
Here's my game plan for the week:
Monday, July 6thSELL GBP/USD - Halifax PMI data are going to trickle out of the British Isles. Numbers are expected to stay flat (0%) from previous. No improvement or less than this should be bearish for the Pound and could confirm that economic activity is stalling.
Will be watching Price Action on the following pairs:
EUR/USD, NZD/USD and USD/JPY, as these could also be affected by continued dollar strength though no major announcement for them are due this day. If setups appear on the daily and hourly charts, I am looking to
SELL EUR/USD and NZD/USD and BUY USD/JPY.
Tuesday, July 7thSELL GBP/USD - at about 4:30 pm, UK Manufacturing and Industrial Production numbers come out, expected to show a slower increase. This should be bearish for the Pound.
SELL USD/CAD - Canadian data on Building Permits (8:30 pm) and Ivey PMI (10 pm) come out which are expected to come out with numbers bullish for the CAD. Hopefully, this should allow the CAD to buck the trend of the other majors.
SELL EUR/USD - French Trade Balance (2:45 pm) and German Factory Orders (6 pm) are due. I expect them to show bearish numbers for the Euro and kick this pair down further.
Wednesday, July 8thSELL GBP/USD - On Wednesday, 7:00 am, UK Nationwide Consumer Confidence data comes out. Should the numbers show disappointing figures, the pair could go down further.
BUY AUD/USD - the AUD could be another major that could buck the trend on this day. Recent data showing Australia's trade with China is improving might cause Australian Consumer Sentiment (due 9am) to rise and be bullish for the Aussie.
SELL USD/JPY - Core Machinery Orders are due to come out at 7am, expecting to show marked improvement from previous data. If numbers print out better than expected, this should be bullish for the Yen.
Thursday, July 9thAUD/USD - Data to watch is Employment Change and Unemployment Rate. My strategy will be to watch these data (due by 9am). If these print bullish for Aussie, BUY AUD/USD. If bearish for the Aussie, SELL AUD/USD.
Friday, July 10thBUY GBP/USD - UK PPI is expected to print out better than previous at 4:30 pm. This should be bullish for the Pound and send this pair to a reverse direction by the end of the week.
