Daily Forex Market Preview, 13/12/2017
The U.S. dollar was seen trading mixed as investors gear up for the Fed meeting today. On Tuesday, economic data from the U.S. showed that the U.S. producer price index advanced 3.1% on the year in November. This was the biggest gain since January 2012. The price increase at factory gate stoked expectations that the consumer price index could come out stronger.
The November CPI data will be released today with forecasts showing a 0.4% increase on the month. The Fed's rate hike decision is also coming up. Expectation for a 25 basis points rate hike is almost certain. The Fed's projections for the year ahead and forward guidance will be key.
In the UK, the inflation data for November released yesterday showed that CPI accelerated 3.1% on the month. However, core CPI was steady, rising 2.7%.
The UK's monthly jobs data will be coming out today with forecasts showing a modest increase in wages to 2.5%.
EURUSD intra-day analysis
EURUSD (1.1753): The euro posted declines yesterday as the currency pair remains trading above the 1.1700 level of support. In the short term, we could expect to see a brief retest of this support level. On the 4-hour chart, price action posted a lower low but was seen finding support off the outer median line. A short term correction towards 1.1822 - 1.1843 is quite likely where resistance could be formed. The EURUSD could be seen maintaining the range within the resistance level mentioned and the support region near 1.1710 - 1.1700 level. A breakout below this support could potentially push EURUSD lower. This could see price action testing the November lows near 1.1552 support.
USDJPY intra-day analysis
USDJPY (113.29): The USDJPY formed another doji pattern on the daily chart yesterday. A bearish close below the doji's low today could potentially signal further downside in price. USDJPY is seen trading just below the previously established resistance level of 114.31 - 114.07 region. To the downside, price is pending retest of the support level near 110.70. On the 4-hour chart, the immediate support near 113.06 - 112.90 remains in focus. A break down below this support could potentially turn USDJPY's bias to the downside as price will then likely slide towards the 112.05 level of support. To the upside, the gains could be limited towards the previously established resistance level.
NZDUSD intra-day analysis
NZDUSD (0.6948): The New Zealand dollar extended gains for three consecutive days. Price action managed to remain supported above the short term price level of 0.6911. Resistance is seen at 0.6981 which could be the near term upside target in price. The breakout to the upside from the triangle consolidation pattern potentially suggests further scope for gains in NZDUSD. This will however change in the event that the kiwi slips back below the 0.6911 level. We expect to see support being formed near this level ahead of further gains towards 0.6981.
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I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.