Daily Forex Market Preview, 06/03/2018
The euro currency was seen muted to the outcome of the Italian elections which showed rising support for the anti-establishment parties while also resulting in a hung parliament. The various parties, led by the 5 Star Movement is expected to start coalition talks.
On the economic front, the UK’s services PMI data improved, rising to 54.5 in February as the data beat estimates of 53.3 and gained from January’s 53.0. In the Eurozone, retail sales data showed a 0.1% decline which was below estimates of a 0.3% increase.
The non-manufacturing PMI from ISM showed a flat print, as the index registered a print of 55.9, which matched estimates and was unchanged from the previous month’s print.
For the day ahead, the economic calendar today will feature comments from NY Fed President; William Dudley followed the U.S. factory orders. Later in the day, the Bank of England’s chief economists, Andy Haldane will be speaking. Following the RBA’s decision earlier today, the RBA Governor Lowe is expected to speak later in the day.
GBPUSD 06-03-2018 Intra-day analysis
GBPUSD (1.3843): The British pound was seen extending the gains for the third consecutive day although the momentum looks to be slowing in the near term. The brief weakness in the U.S. dollar alongside a better than expected services PMI helped to push the currency pair higher on the day. On the 4-hour chart, price action was seen retracing back to 1.3860 level which marks the 38.2% retracement level. A reversal at this level could see GBPUSD retesting the previous lows at 1.3734. To the upside, price will need to breakout above 1.3897 to shift the bias to the upside.