Daily Forex Market Preview, 02/02/2018
The U.S. dollar continued to remain weak a day after the FOMC meeting saw interest rates being unchanged. Despite a slightly hawkish Fed statement, the dollar remained weaker especially against the euro currency.
Data from the Eurozone showed that manufacturing sector started the year on a firm footing. Eurozone’s manufacturing PMI was seen rising to 59.6 as expected. In the UK, the manufacturing PMI was slightly weaker with the index at 55.3 which missed estimates of 56.5 and down from December’s 56.2.
In the U.S. the ISM’s manufacturing PMI showed another strong month with the index beating expectations and rising to 59.1 This was however weaker than December’s gain of 59.7.
Looking ahead, the payrolls report for the month of January will be released today which will be major event risk for the currency markets. The U.S. unemployment rate is expected to remain steady at 4.1% while the number of jobs being added during the month is expected to rise 181k, up from December’s 141k. Wage growth is forecast to rise 0.2%, slightly slower than December’s increase of 0.3%.
USDJPY intra-day analysis
USDJPY (109.67): The USDJPY was seen posting gains in early trading today as the U.S. dollar is attempting to post a rebound. With price action posting a higher low, price action is looking to break out from the outer median line. We expect to see this short term upside momentum targeting the resistance level at 110.44 – 110.34 level. To the downside, any dips could stall near the current break out level. In the medium term, USDJPY could be seen range bound within the resistance and support levels, although there is a possibility that the upside bias could start to hold.