Daily Forex Market Preview, 09/01/2018
The U.S. dollar posted strong gains yesterday following the rebound at a major support level last week. This led to the euro losing steam as the currency pair was seen easing back from recent highs amid profit taking and fresh concerns on the surge in the exchange rate. Economic data was muted for the most part. Switzerland’s inflation report showed a flat print on the month while the retail sales in the Eurozone showed a 1.5% increase which was more than expected.
The Bank of Canada released its business outlook survey which alongside recent jobs data has raised the odds of a rate hike from the central bank at next week’s meeting.
Looking ahead, the economic data today is light. German industrial output data and the Eurozone unemployment report will be some of the major data points for the markets today.
EURUSD intra-day analysis
EURUSD (1.1967): The EURUSD posted sharp declines yesterday as price action was seen testing the support level at 1.1950 level, touching a 5-day low. The declines came on a stronger U.S. dollar and amid concerns that the strong appreciation in the common currency could spur ECB officials to talk down the currency ahead of this month’s monetary policy meeting. Technically, EURUSD could be seen posting a rebound off 1.1950 however, further declines cannot be ruled out to 1.1900. A retest of support at 1.1900 could potentially complete the correction. In the near term, any rebound will be limited to the 1.2000 handle which previously served as minor support.