Daily Forex Market Preview, 18/01/2018
The U.S. dollar posted a strong rebound yesterday. Lack of economic data from the U.S. saw investors focusing on the broader macro themes. Apple Inc’s announcement about repatriating billions of dollars in overseas cash saw the markets react bullishly on the news.
On the economic front, the Eurozone inflation report showed that final inflation figures for December were confirmed at 1.4% on the headline and 0.9% on the core. The Bank of Canada hiked interest rates for the third time yesterday since last year bringing the overnight cash rate to 1.25%. However, the Canadian dollar was seen falling as BoC’s Poloz cited concerns about the NAFTA deal and the impact on the Canadian economy.
Looking ahead, China’s GDP data is on tap today. Economists forecast a 0.6% increase in the economy on the quarter. In the U.S. trading session, the building permits data will be coming out followed by the U.S. crude oil inventories report.
EURUSD intra-day analysis
EURUSD (1.2185): The EURUSD posted strong declines yesterday as price fell to a two day low. The declines come following Tuesday’s doji candlestick pattern that was formed. On the intraday charts price action is seen currently trading near the median line which could offer dynamic support in the near term. We expect to see a short term bounce, following which price action could be pushing higher to form a lower high. As long as the previous highs are not breached, EURUSD is expected to reverse the gains targeting the support level at 1.2090 – 1.2070 support level.