Daily Forex Market Preview, 12/02/2018
The U.S. dollar managed to hold its ground but, was trading mixed on Friday. The EURUSD posted declines into the close while the equity markets saw another volatile day. On the economic front, data from the UK showed that manufacturing production rose 0.3% on the month as expected. The previous month’s figures were revised down from 0.2% from the initially reported 0.4% increase. Construction output seemed to be better, rising by 1.6%, which beat estimates of a 0.7% increase while industrial production declined 1.3% on the month.
Canada’s monthly employment figures surprised the public to the downside. The economy was seen losing 88,000 jobs in January with the unemployment rate rising to 5.9% up from 5.7% in December.
Looking ahead, the economic calendar is relatively quiet today with no major releases expected. Switzerland will be releasing its monthly inflation data. Forecasts predict a 0.1% decline in consumer prices. Later in the day, Japan’s producer price index data will be coming up with forecasts showing a slower pace of growth at 2.7%.
GBPUSD 12-02-2018 Intra-day analysis
GBPUSD (1.3867): The GBPUSD currency pair reached the target of 1.3855 on Friday. Price action closed below this level posting a modest reversal. The inside bar pattern formed on Friday’s close indicates that prices could be seen retesting the break out level of 1.2855. A reversal off this level could signal further downside in GBPUSD. Support at 1.2611 – 1.3589 will be the next downside target in the currency pair. In the event that GBPUSD manages to close above 1.3855 on a daily basis, we could expect some sideways consolidation taking place. The downside bias will be invalidated only on a close above 1.3978.