Daily Forex Market Preview, 26/02/2018
The U.S. dollar managed to close last week with some gains although investors weren’t very confident. Data from the Eurozone confirmed that inflation rose at a pace of 1.3% on the headline in January while core inflation was seen rising 1.0%. The data was unchanged from the flash inflation estimates.
Canada’s inflation data rebounded rising 0.7% on the month as January’s inflation reversed the 0.4% decline from December while also beating estimates.
Looking ahead, the economic calendar today will see ECB President Mario Draghi testifying to the European parliament in Brussels. Investors will be closely watching for any references to the ECB’s monetary policies. The central bank is due to meet in a week’s time for its monetary policy meeting.
Elsewhere, new home sales data will be coming out during the NY trading session. Forecasts point to a modest increase of 655k compared to 625k print registered previously. However, the U.S. housing markets data remained mixed over the past week and could potentially offer some surprises for the market.
Among the policy maker speeches, the BoE’s MPC member, Cunliffe will be speaking while the Fed’s Quarles will be speaking later in the day.
EURUSD 26-02-2018 Intra-day analysis
EURUSD (1.2311): The EURUSD was seen posting declines last week. Despite the attempts to close on a bullish note last Thursday, price action settled lower on the day. Friday’s session closed within Thursday’s range forming an inside bar as a result. We expect that the breakout will be to the downside given the retest of resistance level near 1.2363 – 1.2330 on the 4-hour chart. Unless EURUSD posts a strong breakout to the upside, we expect to see the declines continuing lower in the medium term. EURUSD remains on track to target the lows of 1.2212 from 9 February and a break down below this low will extend the declines to 1.2090.