Daily Forex Market Preview, 29/01/2018
The U.S. dollar closed last week on a volatile note with the dollar index losing 0.3% on Friday. The decline also marked the biggest weekly loss since June 2017. On Thursday, President Trump clarified on the comments made earlier by the Treasury Secretary Steven Mnuchin about his preference for a weaker dollar. Trump said that Mnuchin’s comments were taken out of context. This sent the USD to rise briefly but the currency gave up those gains by Friday’s close.
The preliminary GDP data from the U.S. was released on Friday. The fourth quarter GDP was seen rising 2.6% which was weaker than expected. In the UK, the advance GDP report showed that the UK’s economy rose 0.5% on the quarter.
Looking ahead, the economic data today will include the German import prices while in the NY trading session, the core PCE price index data will be released. Economists expect core PCE to rise 0.2% on the month. Personal income and spending data will also be released.
EURUSD intra-day analysis
EURUSD (1.2419): The EURUSD rallied briefly to post a fresh 4-year high at 1.2537 on Thursday but eased back towards the weekend. The gradual decline is seen with the euro attempting to rebound off the previous lows formed at 1.2393 where minor support can be seen. As long as this support holds, EURUSD could be poised to make further gains to the upside. This is also seen by the bullish flag pattern that has formed. The next target to the upside comes in at 1.2660 provided that the EURUSD can breakout above 1.2497. To the downside, a break down below 1.2398 could signal a correction towards 1.2281.