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.
GBPUSD 28-02-2018 Intra-day analysis
GBPUSD (1.3899): The British pound was seen extending the declines back to the support level near 1.3902. The declines came after the previous retest to the upper trend line of the triangle pattern holding out as resistance. Price action still remains flat and a breakdown below 1.3902 will signal further declines in the near term. We expect GBPUSD to target the next support level at 1.3611 – 1.3590 region. To the upside, any gains are likely to be capped by the trend line. However, in the event that GBPUSD manages to breakout above the trend line, we expect further gains towards 1.4127.