Daily Forex Market Preview, 23/01/2018
The Bank of Japan’s monetary policy meeting held earlier today saw the central bank leaving interest rates and its QQE purchases unchanged. The Japanese yen was seen strengthening on the back of the BoJ’s meeting. Governor Kuroda is expected to hold a press conference in a few hours.
The U.S. dollar was seen giving up its gains despite the Congress approving measures to fund the government for a period of three weeks. This comes after a brief three-day shut down. The economic calendar was sparse yesterday leaving most of the trading to the broader political developments from Washington.
Looking ahead, the UK’s public sector net borrowing data is expected to be released today followed by the ZEW economic sentiments from Germany and the Eurozone. Later in the day, the Richmond manufacturing index data will be released.
EURUSD intra-day analysis
EURUSD (1.2260): The EURUSD fell to an intraday session low of 1.2213 before the currency pair pulled back, but closed on a bearish note. Price action remains consolidating near the highs above 1.2200 and this range could be expected into this Thursday’s ECB monetary policy meeting. On the 4-hour chart, price action is seen gradually finding support across the median line. However, as long as price action fails to make a higher high, the bias remains to the downside. Watch for support at 1.2183 which could be tested in the short term. A break down below this support could signal a decline to 1.2090 – 1.2070 where the next main support level resides.