Daily Forex Market Preview, 17/02/2017
The US economic data continued to post strong gains with building permits and Philly Fed manufacturing index beating expectations strongly. However, the markets were not quite impressed despite the data points supporting the hawkish Fed for more rate hikes. The US dollar continued to trade weak against most of its peers but closed the day on a mixed note. It does look quite likely that the Greenback will be closing the week on a bearish note.
Looking ahead, a somewhat slow day will see the Eurozone current account details coming out earlier followed by the UK's retail sales data which is expected to show a 1.0% increase on the headline following a 1.9% decline the month before.
EURUSD intra-day analysis
EURUSD (1.0670): The EURUSD maintained its bullish momentum yesterday, and despite some intraday doji candlesticks, price action pushed above the 1.0650 handle to close at a 5-day high of 1.0674. Further upside could be seen coming in EURUSD which will potentially see a test of 1.0765 - 1.0800 resistance handle. A breakout above this resistance level will be crucial in setting further gains for the single currency as it would validate the inverse head and shoulders pattern and puts the minimum upside target in EURUSD to 1.1200. However, in the near term, EURUSD could be seen ranging within 1.0700 and 1.0642 levels of resistance and support, but the main theme remains to buy the dips.
GBPUSD intra-day analysis
GBPUSD (1.2499): The 4-hour chart for GBPUSD is showing price action currently consolidating into a triangle pattern as we expect to see another minor leg to the downside near 1.2440. A decline to this level and a reversal could signal an upside breakout in prices from the triangle pattern with the minimum upside target coming in at 1.2600. The monthly retail sales figure will be coming out later today which will be the main event risk for GBPUSD.
USDJPY intra-day analysis
USDJPY (113.39): The U.S. dollar turned bearish against the Japanese yen after the retest to 114.00. Price closed bearish yesterday at 113.25, and we expect to see a further near-term decline in prices with support at 112.00 most likely to be tested to the downside. The previous rally failed to the fill the gap and posted a strong reversal two days ago just near 114.78. A near-term retest to 114.38 cannot be ruled out as USDJPY sits just above the support level of 113.00 - 112.50. A rebound off this support will see prices rally back to retest the 114.38 before posting stronger declines that could eventually break down below the 112.50 support low.