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EURUSD 2017-12-05 Intra-day analysis

British pound turns volatile as Brexit talks are inconclusive.

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Daily Forex Market Preview, 05/12/2017

The British pound was seen trading volatile as the currency pair gave up the gains intraday. This came after news reports emerged that the UK and the EU talks ended inconclusively. The British PM May was in Brussels yesterday to meet with Juncker and discuss the Brexit bill and the Irish border.

In the U.S. the passage of the tax reforms bills boosted the Greenback. Investors expect that the tax cuts will help the U.S. economy while also increasing the pace of rate hikes. The news helped stall a three day decline in the U.S. dollar.

On the economic front, the U.S. factory orders showed a 0.1% decline on the month. This was slightly better than the 0.3% decline that was forecast. Previous month’s revised data showed an increase of 1.7%. In the UK, the construction PMI was better as data showed an increase to 53.1 beating forecasts of 51.2 and up from 50.8 previously.

Looking ahead, the economic data today will see the UK’s services PMI and the non-manufacturing PMI from ISM. Earlier in the day, the RBA’s monetary policy meeting showed interest rates staying unchanged at 1.50%.

EURUSD intra-day analysis

EURUSD (1.1873): The EURUSD closed almost flat yesterday after gapping down on Monday’s open. The currency pair however remains supported to the upside in the short term. The decline to the 1.1843 support is consistent with this view. There is scope for the euro currency to retrace the declines and probably rise towards Friday’s close at 1.1898 to fill the gap. Price action remains supported above 1.1843 in the near term. Resistance at 1.1920 is likely to keep a lid on any further gains. A breakout from this range is expected which could set the near term bias in the currency pair.

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