Daily Forex Market Preview, 25/01/2018
The U.S. dollar was seen extending its declines on Wednesday after the comments from U.S. Treasury Secretary; Steven Mnuchin said that the U.S. administration preferred a weaker currency. Mnuchin, speaking at the World Economic Forum in Davos said that a weaker dollar was good for trade, while also talking about new tariffs and trade pacts.
New Zealand’s quarterly inflation data for the fourth quarter of 2017 showed that consumer prices rose less than expected at a pace of 0.1%. This was weaker than the forecasts of a 0.4% increase on the quarter. Annual inflation rate was seen rising at a pace of 1.6% compared to 1.9% previously.
Looking ahead, the ECB’s monetary policy is scheduled for today. Markets will be looking to the ECB’s statement and Draghi’s press conference while expecting to see no changes to the monetary policy. Later in the evening, Japan’s inflation data will be coming out. No changes are expected as inflation in Japan is expected to rise at a steady pace from the previous month.
EURUSD 25-01-2018 Intra-day analysis
EURUSD (1.2436): The EURUSD extended gains to post a fresh 4-year high as price action was seen clearly rising above the 1.2300 level of resistance. At the time of writing, the EURUSD extended gains to trade near 1.2436. The strong gains came on the back of a weaker U.S. dollar. On the 4-hour chart, price action is seen trading near the outer median line which could offer some type of dynamic resistance level. A reversal at this level could signal a near term decline as price could be seen correcting to 1.2281. The ECB’s meeting will be the main catalyst for the price action in EURUSD today.