Daily Forex Market Preview, 17/01/2018
The U.S. dollar continued to trade weak with the euro and the Japanese yen held onto it’s gains. Investors bid up the euro and the yen as both the currency’s central bank meetings are coming up next week. Hopes of policy normalization from the respective central banks have managed to keep the bullish momentum going.
On the economic front the UK’s inflation data released yesterday showed a 3.0% increase in headline CPI. This was in line with expectations and slightly slower than 3.1% increase seen in November. Core CPI was seen rising 2.5%, down from 2.7% increase registered in November.
Looking ahead, the markets will be watching the BoC’s monetary policy meeting today. The central bank is widely expected to hike interest rates by 25 basis points at today’s meeting.
Earlier in the day, the eurozone final inflation figures will be coming out. Economists expect that consumer rose 1.4% on the headline and 0.9% on the core.
EURUSD intra-day analysis
EURUSD (1.2267): The EURUSD continued to trade above the 1.2250 level which marks the major resistance level on the monthly charts. Price action is expected to remain muted near this level as we expect to see a short-term correction likely to take place. On the 4-hour charts, EURUSD is seen posting a consolidation. Any short-term declines could see price action limited to the 1.2090 level of support. The minor double top pattern currently taking shape near 1.2280 region could signal the downside correction in prices. This view can shift however if EURUSD manages to close above 1.2280 on a daily basis.