Daily Forex Market Preview, 05/07/2017
The US dollar was seen trading mixed yesterday. The US markets were closed on account of the Independence Day holiday. The greenback was seen trading stronger against most of its peers. The exception was the Canadian dollar which fell sharply after comments from the BoC Governor, Poloz. Mr. Poloz said that he expects inflation to be in an uptrend by the first half of 2018 and said that policy normalization would be required.
In the UK, the construction PMI data fell to 54.8 suggesting weaker growth momentum in the construction sector. Survey participants said that there was renewed risk aversion among clients.
Looking ahead, the FOMC meeting minutes will be the main event of the day alongside the US factory orders. In the UK, the services PMI will be released with expectations of a modest decline to 53.6 from 53.8 previously. In the Eurozone, the final services PMI data will be released.
EURUSD intraday analysis
EURUSD (1.1356): The EURUSD extended the declines for three consecutive days after briefly breaking above the $1.1400 handle. Price action is currently seen consolidating near the 1.1357 level. Resistance is likely to be developed here which could push the currency pair towards 1.1300 in the near term. Below $1.1300, further declines could see EURUSD falling towards the support level at 1.1129. To the upside, considering the three day decline, if price action manages to stay supported above 1.1357, then we can expect some near-term gains back towards 1.1400 handle.
GBPUSD intraday analysis
GBPUSD (1.2932): The British pound continued the declines for a second day and closed below 1.2975. Any near-term gains could see price action testing 1.2975 region where resistance could be developed once again. If the resistance holds, GBPUSD could be seen settling lower in the near term with the support at 1.2800 coming into focus. The services PMI data could be the catalyst for GBPUSD to post the declines. Alternately, in the event that GBPUSD breaks above 1.2975, then we could expect further gains to be maintained in the currency pair.
AUDUSD intraday analysis
AUDUSD (0.7616): The Australian dollar posted strong declines yesterday. The Aussie gave up the gains following the RBA's monetary policy release. The central bank was seen coming down as dovish with references made to the Australian dollar's exchange rate. AUDUSD fell to lows of 0.7591 before closing the day at 0.7605. In the near term, price action could be seen testing the resistance level at 0.7624 with the potential to retest 0.7653 where the next minor resistance level exists. To the downside, expect AUDUSD to post declines towards the support level at 0.7514.