Daily Forex Market Preview, 08/01/2018
The U.S. dollar index settled at 91.74 on Friday, after price action was seen consolidating above the 91.50 handle over the past four daily sessions. On Friday, the December nonfarm payrolls data was released. Although not a blockbuster report, the payrolls showed that wages edged higher to 2.5% on the year, the unemployment rate held steady for a third consecutive month at 4.1%. The pace of jobs created in December was however smaller than expected.
The Greenback, which has been in a strong decline over the past few months managed to stabilize. However, a lot remains up in the air regarding how the USD reacts from here on.
Economic data today is relatively quiet, meaning a slow start to the week. Data from the Eurozone will see the release of the German factory orders which are expected to rise at a slower pace. Bank of Canada will be releasing its business outlook survey. The report comes a week ahead of the BoC meeting next week. From the U.S., FOMC members Bostic and Williams will be speaking later in the day.
EURUSD intra-day analysis
EURUSD (1.2026): The EURUSD closed with some losses on Friday and in the process, price action formed an inside bar near the current highs above 1.20. The break out from this inside bar could potentially spell the next stage of gains or declines in the common currency. On the 4-hour chart, the EURUSD is seen falling away from the lower median line after price broke to the downside. With the exception of some consolidation taking place here, the common currency could be seen extending the declines towards 1.190 at the minimum in the near term. However, this scenario could change on a bullish close above 1.2090. This would keep the upside momentum intact although, in the longer term, the possibility of a correction to the rally remains high.