Daily Forex Market Preview, 02/01/2018
The markets opened after the holiday season with a relatively quiet trading scene. The euro managed to post some gains on the last trading day of the year, as the U.S. dollar weakened into the final trading hours.
The weaker greenback led to the commodity markets holding their gains into the 2017 close. Geo-politics was largely stable over the week and did not impact the market sentiment by much. Trading is expected to remain light today ahead of a busy week starting from tomorrow.
On the economic calendar today, activity is slightly quiet. In the Eurozone, the Italian, French, German and the Eurozone final manufacturing PMI figures are expected to be released. No major surprises are expected as economists expect the final manufacturing PMI to remain steady at 60.6 same as the month before.
In the UK, the manufacturing PMI for December is expected to remain slightly weaker at 58.0 compared to 58.2 previously. In the U.S. trading session, the final manufacturing PMI is expected to show a steady print of 55.0. This comes ahead of the U.S ISM manufacturing PMI due on Wednesday.
EURUSD intra-day analysis
EURUSD (1.2017): The EURUSD rallied to a 3-monh high on an intraday basis on Friday closing in at 1.1997. The common currency maintained the gains as it opened on Tuesday near the same levels. In the short term, we expect that the EURUSD is likely to maintain the upside momentum. However, consolidation is expected as price action approaches the 1.2000 – 1.2050 handle. At the time of writing, EURUSD is seen trading near the highs. We expect to see short term correction in prices taking place. Support at 1.1920 remains the initial support to the downside, followed by a steeper test of support at 1.1843 – 1.1822.