By Orbex Blog
Daily Forex Market Preview, 09/01/2018
The U.S. dollar posted strong gains yesterday following the rebound at a major support level last week. This led to the euro losing steam as the currency pair was seen easing back from recent highs amid profit taking and fresh concerns on the surge in the exchange rate. Economic data was muted for the most part. Switzerland’s inflation report showed a flat print on the month while the retail sales in the Eurozone showed a 1.5% increase which was more than expected.
The Bank of Canada released its business outlook survey which alongside recent jobs data has raised the odds of a rate hike from the central bank at next week’s meeting.
Looking ahead, the economic data today is light. German industrial output data and the Eurozone unemployment report will be some of the major data points for the markets today.
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EURUSD intra-day analysis
EURUSD (1.1967): The EURUSD posted sharp declines yesterday as price action was seen testing the support level at 1.1950 level, touching a 5-day low. The declines came on a stronger U.S. dollar and amid concerns that the strong appreciation in the common currency could spur ECB officials to talk down the currency ahead of this month’s monetary policy meeting. Technically, EURUSD could be seen posting a rebound off 1.1950 however, further declines cannot be ruled out to 1.1900. A retest of support at 1.1900 could potentially complete the correction. In the near term, any rebound will be limited to the 1.2000 handle which previously served as minor support.
USDJPY intra-day analysis
USDJPY (112.60): Despite the USD posting a rebound, the USDJPY closed with a doji, accompanied by follow through price action showing a decline in early trading today. The reversal comes off the test of the major falling trend line as expected. We expect to see the downside correction in USDJPY pushing the currency pair lower. Support at 112.04 remains in focus to the downside. Overall, USDJPY is likely to maintain its sideways range but, a break down below 112.04 could spell further declines in price.
NZDUSD intra-day analysis
NZDUSD (0.7175): The New Zealand dollar was broadly muted yesterday as price action consolidates above the 0.7160 handle. The Stochastics oscillator shows price action losing its momentum. This could indicate a downside correction in NZDUSD if the support at 0.7160 fails. The next lower support at 0.7062 could be the next target on a downside breakout from the current levels. To the upside, further gains can be expected only on a rebound off the support level at 0.7160, but it looks unlikely at this point.