Daily Forex Market Preview, 27/02/2018
The U.S. dollar managed to hold its ground on Monday as investors brace for Fed Chair, Powell’s semi-annual testimony to Congress later today. Although Powell hasn’t yet officially chaired any FOMC meetings, his testimony could be seen as a major indicator of how monetary policy will be steered under his governance.
On the economic front, Mario Draghi gave his testimony to the European parliament on Monday. No major references were made to monetary policy. He however said that the central bank needs to remain patient with inflation. In the U.S. new home sales data showed a decline as home sales rose only 593k missing estimates of 655k.
Looking ahead, the economic calendar today is busy. The U.S. durable goods orders data will be coming out and forecasts point to a decline on the headline print. Germany and Spain will be releasing the flash inflation readings while Canada will be releasing its annual budget plans.
EURUSD 27-02-2018 Intra-day analysis
EURUSD (1.2321): The EURUSD attempted to rally to intraday highs but price action was seen closing lower on the day off the highs. On the 4-hour chart, we see the bearish flag pattern being formed, right below the main resistance level where the EURUSD has been consolidating. A break down below the base at 1.2260 could signal further declines targeting 1.2074. Alternately, EURUSD will need to close strongly above the resistance level in order to invalidate the downside bias. However, in this scenario, we still expect to see consolidation taking place unless the EURUSD manages to post fresh highs.