U.S. Senate Passes Tax Reforms By A Narrow Vote
Summary
- U.S. Senate approved the tax bill on Friday.
- Monday starts off with the UK's construction PMI.
- Orbex's Technical Analysis looking at EURUSD, USDJPY & XAUUSD.
Daily Forex Market Preview, 04/12/2017
The markets closed on Friday on a rather sombre note. However later in the night, the U.S. Senate approved the tax bill which was passed by a narrow vote. The latest hurdle being crossed places the much talked about tax reforms one step closer. Both the Senate and the House are now expected to craft a joint bill.
On the economic front, the ISM's manufacturing PMI released on Friday showed that the U.S. manufacturing activity slipped slightly to 58.2. This was lower than forecasts and down from 58.7 in October. Friday was also data heavy from Canada. The monthly employment report showed Canadian unemployment rate falling to 5.9% from 6.3% the month before. GDP data for the month also showed a modest increase of 0.2% which was higher than the forecasts.
Looking ahead, Monday starts off with the UK's construction PMI. Forecasts point to a modest increase to 51.2 in November, up from October's 50.8. This comes after Friday's manufacturing PMI showed strong gains. The Eurozone Sentix investor confidence data is also expected to come out later followed by the factory orders report from the U.S. later in the day.
EURUSD intra-day analysis
EURUSD (1.1868): The EURUSD was seen as rather volatile on Friday, as price action closed nearly flat and gapped lower at today’s open. The consolidation seen just below the 1.1954 level of resistance signals a potential change of sentiment in the short term. Unless EURUSD manages to close convincingly above 1.1954 we expect the bias to shift to the downside with the major support at 1.1704 in focus. In the short term, EURUSD will need to breach the initial hurdle. Strong intraday support is seen near 1.1843 - 1.1822. A break down below this level will however signal the declines to 1.1704. To the upside, the resistance level near 1.1920 will be critical for price action. However, watch the lower high that was formed last week which could signal a move to the downside.
USDJPY intra-day analysis
USDJPY (112.74): The USDJPY formed an outside bar on Friday and closed bearish. The intraday rally towards 112.65 was met with strong resistance as the U.S. dollar pared gains. Price action closed on Friday right near the lower support level at 112.04. We expect to see the broader range within 112.65 and 111.61 being maintained in the short. The currency pair also fell to this support level briefly before pulling back higher to settle at the next support level. There is also a possibility that USDJPY will be forming an inverse head and shoulders pattern with the neckline resistance seen at 112.65. Therefore, watch for potential reversals within 112.04 and 111.61 which could signal a move back to the neckline resistance.
XAUUSD intra-day analysis
XAUUSD (1274.36): Gold prices remain volatile as price attempted to test the resistance level at 1285 before closing lower. The retest back to the support level at 1274.70 signals a possible move back to the upside. However, with the support level seen to be weak, there is a potential for gold prices to post a decline. Failure to bounce off 1274.70 region could keep gold prices weaker with the next test of support seen at 1262.83 region. In the near term, the volatile ranging price action in gold is expected to continue. Above 1285 resistance, gold prices could once again be seen targeting the previous highs near 1296 region with further gains likely to stretch price to test the 1300 level of resistance.
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