Daily Forex Market Preview, 16/11/2016
The US dollar maintained its gains near the 100 psychological level yesterday, posting a fresh high to 100.28 in a seven day winning streak. However, the price momentum is showing signs of slowing at this level, and a pullback to 99.00 to establish support is pending which indicates a short-term retracement across the USD cross currencies. On the economic front, traders await tomorrow's inflation data and Janet Yellen's testimony.
GBPUSD Intra-day Analysis
GBPUSD (1.2464): GBPUSD fell to the 1.2400 support, but the price quickly rebounded off this level to test 1.2500 handle. Price action remains range bound within these levels in the near term with the risk of an upside rally above 1.2500. Today's monthly jobs data will likely be the catalyst as economists' expect the UK unemployment rate to stay put at 4.9% and the average earnings to remain steady at 2.3%. Watch for an upside bounce in GBPUSD but below 1.2600, which could potentially carve out a head and shoulders pattern. In this case, the cable could be seen falling to 1.2200 support on break of the neckline support at 1.2400 following a lower high being formed above 1.2500 and below 1.2600.
NZDUSD Daily Analysis
NZDUSD (0.7095): Price action in NZDUSD has practically stalled after hitting the rising neckline support near 0.7090 - 0.7100. With the daily Stochastics in the oversold level, there is scope for the price to retrace to the upside. The previously mentioned support level near 0.7230 - 0.7265 is likely to be retested to establish resistance level ahead of further declines. This retracement would most likely attract new sellers into the market as NZDUSD is likely to a breakdown below the neckline support to extend its declines to 0.6659.
EURGBP Daily Analysis
EURGBP (0.8620): EURGBP closed out with an outside bar yesterday as price remained trading within the 0.8687 - 0.8586 support level. The daily chart shows the hidden bullish divergence with the Stochastics printing a lower low against the higher low in price. A near term rebound is likely which could push EURGBP to challenge the broken support near 0.8888 to establish resistance ahead of further declines. In the medium term, following a reversal near 0.8888, EURGBP could be seen pushing lower to test the next support at 0.8330.