Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Fed Harker's Hawkish Comments Revives The U.S. Dollar

Daily Forex Market Preview, 21/02/2017

While the U.S. dollar was seen slipping during a quiet trading session on Monday which saw the U.S. markets closed, the greenback got a boost with hawkish comments from Fed's Patrick Harker from Philadelphia. Speaking to MNI, Harker said that he would support a March rate hike if there is additional evidence of inflation rising.

"I would not take March off the table at this point. We'll have to see how it plays out in the next few weeks," he said adding that while he didn't believe the Fed was behind the curve, "it is something I am worried about," Harker said.

The economic calendar today is a bit packed with the RBA already releasing its monetary policy meeting minutes. From the Eurozone, flash manufacturing and services PMI figures are expected while the UK's inflation report hearings are scheduled for 1000 GMT.

Fed speak continues with Neel Kashkari from Minneapolis and Patrick Harker scheduled to speak later in the day.

EURUSD intra-day analysis

EURUSD (1.0584): EURUSD closed with a small bodied candlestick yesterday coming off the inside bar from Friday. A bearish break down from last Thursday's low of 1.0591 could signal near term declines towards 1.0551. On the 4-hour chart, yesterday's price action has resulted in a weak bearish flag pattern. With the support at 1.0602 - 1.0600 being breached by a strong bearish candlestick, EURUSD could be seen extending the declines towards 1.0557 - 1.0555 which is a previously identified support level.

XAUUSD intra-day analysis

XAUUSD (1233.76): Gold prices posted gains yesterday but failure to continue higher resulted in a bearish start to the day as gold gave up nearly half the gains from yesterday. It was also a holiday short trading session for gold as well. The consolidation near 1241 - 1235 puts gold biased to the downside for a firm test of 1220 - 1217 support which previously acted as resistance. There is scope for prices to rebound off this initial support and rally back, but in this case, the rebound should potentially be pushing gold above the current resistance of 1241.00. Furthermore, a lower bounce in gold prices off the 1220 - 1217 support could mean an increasing possibility of a decline towards 1200 - 1196 support level.

USDJPY intra-day analysis

USDJPY (113.61): USDJPY is attempting to breakout to the upside from the inside bar formed yesterday. This reversal also coincides with the daily chart's breakout from the falling trend line connecting the 3 January 2017 high of 118.612 and 27 January high of 115.378. The immediate resistance is seen at 114.00, and only a breakout above this level will signal further upside in prices. USDJPY could be seen targeting 118.00 in the near term if there is a successful breakout above 114.00.