Daily Forex Market Preview, 12/12/2017
The U.S. dollar was seen consolidating on Monday ahead of the two-day FOMC meeting that starts today. The lack of economic data kept the greenback in check as investors await tomorrow’s FOMC rate hike decision. The Kiwi dollar was seen posting strong gains on Monday after the appointment of the new RBNZ Governor, Adrian Orr.
Looking ahead, the economic data today will include the UK’s inflation report for November. According to the median forecasts, inflation in the UK is expected to have risen at a steady pace of 3.0% in November. Core inflation rate is also expected to be steady at 2.7%. This comes after the BoE’s rate hike in early November.
In the U.S. the producer price index data is expected to show a 0.4% increase, rising at the same pace as the month before. Core PPI is expected to slow, rising just 0.2% down from 0.4% increase previously. The ECB president Mario Draghi is expected to speak later this evening.
EURUSD intra-day analysis
EURUSD (1.1769): The EURUSD was trading flat although intraday volatility picked up. Price action spiked to a two-day high, but the gains were short lived. We expect that the sideways price action will continue in the short term. As long as EURUSD remains supported above the 1.1704 support level, the bias remains to the upside. On the 4-hour chart, EURUSD will need to post a higher low in order for price to test the resistance level area near 1.1843 – 1.1822 region. Establishing resistance at this level will signal a short term retracement. However, we expect to see price action resume its decline on a reversal near the resistance level.