Daily Forex Market Preview, 20/03/2018
The U.S. dollar was on the back foot yesterday. The euro was seen retracing it’s the gains strongly which gains came amid investor uncertainty ahead of the FOMC meeting due on Wednesday.
Developments from Brexit included the EU and the UK striking a transitory deal. According to reports, the UK will remain in the EU until end of 2020 but with restricted powers. The British pound rallied on the news as the currency touched intraday highs of 1.4088.
Looking ahead, the economic calendar for the day will see the release of the inflation data for February from the UK. Economists forecast that inflation might have slowed down to 2.8% on a year over year basis in February. Core inflation is also expected to slow to 2.5% in February after rising 2.7% previously.
From the Eurozone, the German ZEW economic sentiment and the Eurozone ZEW economic sentiment reports will be released. Later in the day, the Eurozone consumer confidence data will also be coming out.
GBPUSD 20-03-2018 Intra-day analysis
GBPUSD (1.4025): The British pound was seen posting strong gains on the day led by the developments on the Brexit talks which the market viewed as being positive for the GBP. The currency pair was seen trading above 1.4063 level but the gains stalled after the trend line was tested from below acting as resistance. The current consolidation could see further gains coming in. There is also the potential for GBPUSD to form an inverse head and shoulders pattern following the reversal at the resistance level of 1.4059.