FX.co ★ Trading plan for 18/05/2018

Friday starts stable on the currency market with minor movements among the main currencies. The focus is on the US-China trade negotiations, where chances of agreement are growing. The stock market is moderately optimistic: Shanghai Composite grows 0.3% and Nikkei 225 gains 0.4%. Gold is not going too far to $1,290 and WTI crude is consolidating at 71.60after it has turned back from the test of new highs at USD 72.25.

On Friday 18th of May, the event calendar is busy in important data releases. Germany will post Wholesale Price Index and PPI data. Eurozone will issue Current Account and Trade Balance data. Canada will present Consumer Price Index data. There are three speeches from FOMC members scheduled later for today: Lael Brainard, Robert Kaplan and Loretta Mester.

EUR/USD analysis for 18/05/2018:

The financial media reports that Deputy Prime Minister Chin Liu He, at a meeting with US President Donald Trump, offered to reduce the US trade surplus by USD 200 billion by increasing imports of US products and other activities. The sources, however, did not say what the American side's response was. The reduction of the US trade deficit with China by USD 200 billion by 2020 is on the list of Trump administration demands. Conversations are to be continued on Friday and it will be the main event of the day, which might cause an impact on the market, especially on US Dollar majors and caresses.

Let's now take a look at the EUR/USD technical picture at the H4 time frame. The market has made a new local low at the level of 1.1742, but since then the bulls are trying to push the prices higher towards the 38% Fibo retracement at the level of 1.1850. Nevertheless, the key zone for bulls is seen between the levels of 1.1879 - 1.1906 and only a clear sustained breakout through this zone will likely help bulls to regain control over the market, at least in a short term. The market conditions are extremely oversold and the growing bullish divergence supports the bullish bias.