Daily Forex Market Preview, 29/12/2017
The U.S. dollar extended declines, falling to a three-month low led by many factors including end of year balancing from portfolio managers. The decline in the greenback led the commodity markets to maintain the gains. Gold prices continued to extend the rally, rising to $1294 an ounce.
Crude oil prices also held up stronger as the EIA's crude oil inventory report showed that stockpiles declines 4.6 million barrels during the previous week which was more than expected.
On the economic front, the weekly unemployment claims rose 245k more than the expected 240k while the Chicago PMI was seen rising to 67.2 compared to estimates of 62.2 and up from 63.9 previously.
Looking ahead, the economic calendar is quiet today. From the Eurozone the preliminary inflation details from Germany and Spain will be released today.
EURUSD intra-day analysis
EURUSD (1.1943): The EURUSD rallied to briefly test the 1.1954 handle before slightly retreating back. The currency pair managed to close at a 3-month high at 1.1941. The gains came amid a weaker U.S. dollar. On the 4-hour session, the currency pair was seen closing above the 1.1920 handle which could now come in as support. Establishing support at this previous resistance level is likely to signal further gains in the near term. However, this comes at a risk that the currency pair might close below the level in which case the sideways momentum could still be maintained. The next lower support comes in at 1.1843 - 1.1822 level.
USDJPY intra-day analysis
USDJPY (112.76): The USDJPY extended the declines yesterday as price action closed strongly below the support level of 113.00 region. The decline below this level signals further downside in USDJPY which could see price action extending the declines to the 112.00 level. In the near term, USDJPY could be seen consolidating near the 113.00 area as price could briefly retest the resistance level ahead of the declines to 112.00. In the event that USDJPY manages to close back higher above this level, then further gains can come by only if the U.S. dollar manages to establish support here.
NZDUSD intra-day analysis
NZDUSD (0.7097): The New Zealand dollar managed to post a convincing close above 0.7062 level yesterday. Price action is expected to continue to the upside as it approaches the 0.71 handle. In the near term, the declines could be seen limited to the 0.7062 level which could now be tested as support. However, lower support at 0.7023 could also be tested following the breakout from this level and price action is still pending a retest of support at this level.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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.