The U.S. GDP report is the big event today and probably for the week as well, so the market has sidelined for the time being. That said, some currencies are making a pullback before the big event, which is opening up the road for a few FX trades, as explained below.  

Will it be fireworks for the US economy today?

The U.S. GDP Coming Up Next

The U.S. GDP report is the biggest event of this week. Well, we sort of received the framework of Trump’s fiscal plan which is one of the reasons the USD is finding some bids lately, but this is more like a proper forex event.

This event comes at a time when the USD is finally finding some bids after trending down for a long time. So, is today’s GDP report going to give the USD another push or is it going to bring an end to this climb that we have seen in the last few days?  

Expectations are for a 3.0% reading, which is pretty high, so even if the actual number misses expectations, I don’t think the market will take it too badly unless it’s a big miss. In my opinion, if the report comes at 2.8%-2.9% we will likely see a dive in USD (jump in EUR/USD), but it will be short-lived.

So, I will see any dip in USD as an opportunity to buy it, or sell EUR/USD. 1.19 would be a good place to look for an entry point if we do climb that high.

Forex traders are rightfully trying to position themselves before the big event today, thus the pullback is over. So, if the GDP report comes as expected or better, then I see further USD gains in the coming session. We are already short on EUR/USD, so we might be looking to trade USD/JPY.  

Cryptocurrencies Are Retracing After A Strong Run. Any Ideas?

Another thing to notice today is the retrace in cryptocurrencies. They rallied strongly yesterday (apart from Dash), and we milked some of that move higher.  

Today though, we are seeing the digital currencies make a retrace lower. Fundamentally, I can’t see any reason for that, so my two cents are that this is just the market making a pullback lower before the next move up.

If anything, the news is bullish. Another cryptocurrency exchange is opening in South Korea called Upbit, which takes the cryptocurrency market a step further in the right direction.    

Also, since the U.S. GDP report is being released shortly, the crypto market is taking positions, so if it was long on cryptos yesterday, today the buyers are relieving some of those positions just in case the U.S. GDP report brings a big surprise.

So, we are thinking of buying one of the main cryptocurrencies, probably Ethereum or Ripple. Below you will find a more detailed plan.  

Trades in Sight

Bearish AUD/USD

1. The trend is bearish
2. The retrace higher is almost complete
3. The 20 (grey) and 50 (yellow) SMAs are waiting to provide resistance above

The Kiwi has been one of the weakest pairs recently, but in the last couple of days the Aussie turned out to be the weakest one. The retrace higher seems to be over already with stochastic almost overbought and two moving averages protecting the top side on the H1 chart.

The retrace in AUD/USD is almost over.

Bullish Cryptos

1. The trend is bullish, and it picked up pace yesterday
2. Today we are seeing a retrace lower
3. The retrace is nearly done in most cryptos
4. Moving averages are providing support

I'm looking to buy at the 200 SMA (purple).

As we mentioned above, Cryptocurrencies are in a strong bullish trend which extended further yesterday. The fundamentals are also bullish. But today the digital currencies are making a pullback lower which at the moment looks to be almost over.

Yes, we just opened a buy signal in Ripple (XRP). Ripple was the one to start the bullish run on Tuesday, so we’re sticking to it for the moment. I’m also looking at Litecoin for a buy signal, but everything in due time.   

In Conclusion

We are going long on cryptocurrencies again after the decent dive this morning. We opened a buy signal in ripple and are looking for another buying opportunity, but let’s let the US GDP report be out of our way first, so we don’t get too much exposure.