Daily Forex Market Preview, 14/12/2017
The much anticipated FOMC meeting concluded yesterday with the Federal Reserve hiking interest rates by 25 basis points. At the meeting, the central bank’s projection for rate hikes next year was in line with market expectations. The Fed projected three rate hikes for 2018 and two rate hikes for 2019. The rate hike yesterday saw two dissenting votes from Evans and Kashkari.
In the UK, the monthly labour market data showed that the UK’s unemployment rate was unchanged at 4.1% but wage growth continued to remain weak in comparison to inflation.
Looking ahead, a busy day on the economic calendar is marked by central bank meetings from the Swiss National Bank, European Central Bank and the Bank of England. No monetary policy changes are expected from either of the central bank meetings making the forward guidance key in anticipation of future policy actions.
In the U.S. the monthly retail sales numbers will be released with forecasts pointing to a strong rebound in retail sales. The flash manufacturing and services PMI numbers are also expected today followed by BoC Gov. Poloz’s speech.
EURUSD intra-day analysis
EURUSD (1.1836): The EURUSD rallied to close at a five day high yesterday following the FOMC meeting. The reversal near the 1.1730 level of support could potentially point to a head and shoulders pattern that is currently forming. If we expect to see a reversal resulting in the right shoulder, then we can expect further declines in EURUSD on a break down below 1.1730 neckline support. On the 4-hour chart, price action has hit the resistance level area of 1.1843 – 1.1822. Further gains can be expected only on a close above this level.