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.
USDJPY intra-day analysis
USDJPY (108.68): The USDJPY extended declines to briefly test the lower support near 108.26. However, the quick pullback off this level indicates a further test of support. On the 4-hour chart, USDJPY was seen consolidating near the minor support level of 108.64 – 108.26. A rebound off this level can be expected only on a higher low being formed. To the upside, resistance at 110.44 – 110.34 could be tested in the near term. The USDJPY currency pair could be seen remaining range bound within these levels in the near term with a breakout from the resistance or support likely to see further direction in the trend being established.