Trading plan for 28/02/2017:
On Tuesday 28th of February there will not be many economic releases during the European and American trading sessions, but there are few news releases that will catch the investors' attention: GDP Second Release at 01:30 pm GMT, Chicago Purchasing Manager Index data release at 02:45 pm GMT and CB Consumer Confidence data release at 03:00 pm GMT. All come from the US.
US Dollar Index analysis for 28/02/2017:
In today's revised data, the US economic growth should be still on track to tick higher in the fourth quarter. If that turns out to be accurate, a firmer increase will boost confidence that output will accelerate in this year's first quarter. The initial estimate for Q4 growth currently stands at a quarterly increase of 1.9%, which is a significant slowdown from Q3's strong 3.5% advance (seasonally adjusted annual rate). The market participants are expecting a 2.1% advance in Q4.
After the Donald Trump election, the mood increased mainly due to the promises made during the presidential campaign. Today's monthly report on the Conference Board's Consumer Confidence Index is not expected to decrease significantly. The market participants expect a figure of 111.1 points, while the last reading was at the level of 111.8 points, which looks like a fractional retreat in CCI in February and that is still closed to December's 15-year high.
Let's now take a look at the US Dollar index technical picture at the H4 time frame. There was a second attempt to break out above the technical resistance at the level of 101.29, but so far it failed. Nevertheless, the bulls are still trying to violate this level as no new low was made since then. The trigger to rally might come when the data will deliver better than expected figures. In that case, the market might break out above 101.29 resistance and head higher towards the next technical resistance at the level of 101.77. On the other hand, if the data will no significantly beat the expectations, then the market will still be trading below the golden trendline and the bear camp will try to make another low, below the current technical support at the level of 100.66.
Market snapshot - Copper still in a corrective cycle on 28/02/2017
After a gap up towards the level of 2.800 the Copper futures price has retraced almost 100% of the move up and even the near-term golden trendline was tested around the level of 2.660.The price is still moving inside of the dashed blue parallel channel and the current market conditions at the H4 time frame chart looks oversold. To break out of the channel, the price must break out above the technical resistance at the level of 2.690 and head towards the next resistance at the level of 2.762. Any failure at this level would result in a full reversal and a very possible test of the level of 2.638 and a break out lower towards the next support at the level of 2.613.
Market snapshot - SP500 closes at another all-time high on 28/02/2017
The SP500 made another higher high yesterday at the level of 2371.54 points and so did SP500 EFT called SPY, that made a higher high at the level of 237.28 points. This series of a consecutive higher high and higher low is a textbook example of a bull trend, so any attempts to short this market might end up in losses. As long as the level of 235.17 is not clearly violated (a daily candle closure below this level) there is no reason to go short yet. Nevertheless, the market conditions are starting to look overstretched to the upside, so it is worth to keep an eye on this market for any sighs of a corrective pull-back.
