Daily Forex Market Preview, 02/04/2018
The markets gapped higher this morning following a three day weekend. The U.S. dollar was seen closing flat on Thursday. Economic data was relatively sparse with the end of quarter flows driving prices.
News over the weekend included China imposing fresh tariffs on imports from the U.S. This is expected to hit the market sentiment especially during the NY trading session. Over the weekend, the BoJ’s tankan surveys showed that business sentiment weakened in the first quarter of the year. This came amid higher revised readings for the fourth quarter of last year.
Looking ahead, the European markets are closed today on account of Easter Monday holiday. The economic calendar is relatively quiet but gets busy during the NY trading session. Important economic data for the day includes the ISM’s manufacturing PMI for March. Economists forecast that manufacturing activity slipped modestly to 60.1 from 60.8 in February.
Later in the day, the construction spending data for February is expected to show a 0.4% increase following a flat reading the month before.
GBPUSD 02-04-2018 Intra-day analysis
GBPUSD (1.4038): The British pound closed on Friday with strong declines, touching below the 161.8% measured move target of the bearish flag pattern formed on the 4-hour chart. The reversal which came just a few pips shy of the 1.40 round number support saw prices briefly retesting 1.4044 level. A follow through from here could signal a touchdown to the 1.40 handle. Only a close above 1.4044 will shift the bias to the upside, with the resistance at 1.4115.