Daily Forex Market Preview, 29/01/2018
The U.S. dollar closed last week on a volatile note with the dollar index losing 0.3% on Friday. The decline also marked the biggest weekly loss since June 2017. On Thursday, President Trump clarified on the comments made earlier by the Treasury Secretary Steven Mnuchin about his preference for a weaker dollar. Trump said that Mnuchin's comments were taken out of context. This sent the USD to rise briefly but the currency gave up those gains by Friday's close.
The preliminary GDP data from the U.S. was released on Friday. The fourth quarter GDP was seen rising 2.6% which was weaker than expected. In the UK, the advance GDP report showed that the UK's economy rose 0.5% on the quarter.
Looking ahead, the economic data today will include the German import prices while in the NY trading session, the core PCE price index data will be released. Economists expect core PCE to rise 0.2% on the month. Personal income and spending data will also be released.
EURUSD intra-day analysis
EURUSD (1.2419): The EURUSD rallied briefly to post a fresh 4-year high at 1.2537 on Thursday but eased back towards the weekend. The gradual decline is seen with the euro attempting to rebound off the previous lows formed at 1.2393 where minor support can be seen. As long as this support holds, EURUSD could be poised to make further gains to the upside. This is also seen by the bullish flag pattern that has formed. The next target to the upside comes in at 1.2660 provided that the EURUSD can breakout above 1.2497. To the downside, a break down below 1.2398 could signal a correction towards 1.2281.
USDJPY intra-day analysis
USDJPY (108.68): The USDJPY extended declines to briefly test the lower support near 108.26. However, the quick pullback off this level indicates a further test of support. On the 4-hour chart, USDJPY was seen consolidating near the minor support level of 108.64 - 108.26. A rebound off this level can be expected only on a higher low being formed. To the upside, resistance at 110.44 - 110.34 could be tested in the near term. The USDJPY currency pair could be seen remaining range bound within these levels in the near term with a breakout from the resistance or support likely to see further direction in the trend being established.
NZDUSD intra-day analysis
NZDUSD (0.7342): The new Zealand dollar has stalled near the top end of the rally with price settling above 0.7333. As long as this support holds, NZDUSD could be seen attempting to post further gains above the previous highs at 0.7407. The downside risks could start to build in the event that NZDUSD breaks down below 0.7333. This would mark a potential correction towards the next main support at 0.7160.