Daily Forex Market Preview, 23/07/2018
The U.S. dollar was seen weakening on Friday after the U.S. President Trump commented about the currency’s strength. Trump said that China and the EU, among other countries were manipulating their currencies and interest rates lower. In contrast, he said that the U.S. was hiking interest rates while the dollar gets stronger with each passing day.
Earlier last week, Trump also expressed his views about the Federal Reserve, noting that the central bank should stop tightening monetary policy.
Economic data from Friday revealed that Canada’s inflation rate advanced 1.4%, beating estimates of a 0.6% increase.
Looking ahead, the economic data for the day is relatively quiet. The U.S. existing home sales report is due today with forecasts showing an increase of 5.46 million. In the Eurozone, the consumer confidence report is expected to remain unchanged at -1.
EURUSD intra-day analysis
EURUSD (1.1728): The EURUSD currency pair was seen closing near the previous resistance level of 1.1730 on Friday before slightly pulling back. The currency pair is expected to breakout from this resistance level in the near term if the bullish momentum continues. To the upside, the common currency could be seen extending the gains toward the next main resistance level of 1.1960 – 1.1920 level. On the 4-hour chart time frame, price action continues to remain trading sideways. The breach of the minor support/resistance level suggests a pull-back to 1.1686 ahead of further gains.
USDJPY intra-day analysis
USDJPY (110.91): The USDJPY extended strong losses on Friday as anticipated. The break down below the 112.28 level saw price action posting strong declines as a result. Friday’s price action saw prices testing the major falling trend line that was breached. This is likely to act as a dynamic support in the near term. A break down below this level is required which could push the currency pair lower to the next main support at 111.13 – 110.85 level.
XAUUSD intra-day analysis
XAUUSD (1231.96): Gold prices were seen extending the gains after the doji pattern that was formed last week. After a modest period of consolidation near the 1219 level, gold prices eventually broke back into the falling price channel. With the 4-hour chart signaling a possible hidden bearish divergence, we expect price action to push lower. However, the declines are likely to be limited. To the upside, the major resistance level at 1242 – 1247 is likely to be the upside target.