Daily Forex Market Preview, 20/12/2017
The U.S. House of Representatives passed the tax reform legislation yesterday, but the market reaction was broadly muted. Another round of voting is expected to take place today following which the tax cut plans would be cleared. Economic data continued to remain soft. The U.S. department of commerce showed that housing starts increased 3.3% on the month in November to 1.29 million units. It was the highest level in 13 months.
Crude oil prices continued to remain trading flat but near recent highs on the outage due to the North Sea pipeline. Reports also showed that Rosneft, Russia's oil firm, was expecting to cut production beyond 2018. Crude oil futures rose 0.5% higher on the day to settle at $57.46.
Looking ahead, the economic calendar today will see the German PPI data coming out. The BoE Governor, Mark Carney will be speaking while later in the day, the U.S. existing home sales data will be coming out. New Zealand will be reporting on its third quarter GDP numbers today.
EURUSD intra-day analysis
EURUSD (1.1840): The EURUSD closed with a bullish bias for the second day following the consolidation above 1.1730 level. Price action is seen once again trading back near the resistance level of 1.1843 - 1.1822 level. The euro had previously declined following establishing resistance at this level. Currently, the retest to the resistance level is likely to coincide with a double top pattern. To the downside, EURUSD is expected to trade within the range above the support level of 1.1710 - 1.1688. A break out from this range will potentially clear the way for the EURUSD towards the next leg in the trend.
USDJPY intra-day analysis
USDJPY (112.98): The U.S. dollar was seen trading stronger against the Japanese yen with price managing to close at a four-day high yesterday. On the intraday charts, price action is back at the resistance level of 113.00 - 112.90 region. A reversal at this level could potentially put USDJPY back within the range. Support is seen at 112.04 level. However, in the event of a breakout above the resistance level, further gains to 114.00 can be expected. A pullback to the breached resistance level to form support could establish more upside bias in price.
NZDUSD intra-day analysis
NZDUSD (0.6958): The New Zealand dollar was seen declining for the second day as price action failed to reach the 0.70 handle. The declines could see the kiwi dollar falling back to the 0.6917 level where support could be established. Forming support at this level could signal a new leg in the rally to the upside. However, failure to hold the declines could signal further losses in the NZDUSD. The next lower support is formed at 0.6841.
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