Daily Forex Market Preview, 28/02/2018
The U.S. dollar was seen strengthening yesterday after the markets remained fairly flat for the most part. Investors were waiting to hear the newly appointed Fed Chairman Jerome Powell, give his testimony to the U.S. Congress.
As expected, Powell gave an upbeat view of the U.S. economy which the markets translated to as a potential signal for a rate hike in March. However, Powell did not make any references to the number of times the Fed could hike rates and did not give any indicators about a potential rate hike in March.
Looking ahead, the economic calendar today will see the flash inflation estimates from the Eurozone for the month of February. Economists polled expect to see a slight decline in the headline CPI which is expected to rise at a slower pace of 1.2%, compared to 1.3% increase registered in January. Core inflation rate is expected to remain steady, rising at a pace of 1.0% for the month of February.
Later in the day, the U.S. second revised GDP estimates will be coming out. Economists expect to see the U.S. GDP rising 2.5% in the fourth quarter of 2017. This marks a slight decline from the 2.6% increase that was registered in the preliminary report. Last but not the least, the pending home sales data is also on the tap later in the day with expectations showing a 0.4% increase which is slightly down from the 0.5% increase registered in the previous month.
EURUSD 28-02-2018 Intra-day analysis
EURUSD (1.2223): The EURUSD was seen closing on a bearish note yesterday as price action closed below 1.2260 level of support. The break down below this level marks the validation of the bearish flag pattern. We expect to see a measured move to the downside, targeting the lower support at 1.2090 region. In the near term, any rebound in prices will see a retest of the breached support at 12260 where resistance could be established. A move above this level will see EURUSD retesting the major resistance level at 1.2330 region.