Daily Forex Market Preview, 01/02/2018
The FOMC meeting yesterday saw no changes to interest rates as widely expected. The central bank however came out with a hawkish statement as it said that inflation could move closer to the Fed’s 2% target rate over the medium term. Yesterday’s Fed meeting was also the final FOMC meeting chaired by Janet Yellen. The Fed committee also elected Jerome Powell as the next governor of the Federal Reserve. The U.S. dollar was broadly unchanged after the FOMC meeting.
The ADP payrolls data showed that the U.S. economy added 234k jobs during the month of January beating estimates of 186k. Previous month’s job numbers were slightly revised down to 242k.
Elsewhere, the Eurozone inflation data showed that consumer prices increased at a slower pace of 1.3% on the headline while core inflation picked up 1.0% in January. This was slightly faster than the 0.9% increase seen the month before.
Looking ahead the British manufacturing PMI data will be coming out today with the index forecast to rise slightly from 56.3 previously to 56.5. Later in the day, the ISM manufacturing PMI from the U.S. will be released.
EURUSD intra-day analysis
EURUSD (1.2423): The EURUSD remained flat at the highs as the currency pair managed to recover the losses from the previous day. The retest of the breakout level near 1.2398 and the doji candlestick formed on the 4-hour session at this level suggests that the upside momentum could prevail. However, EURUSD will need to break out above the previous highs to confirm the uptrend. To the downside, in the event that the EURUSD slips below 1.2398, we could expect to see the currency pair preparing for a correction to the strong rally.