Daily Forex Market Preview, 25/07/2017
The markets were seen trading subdued yesterday with the lack of any tier-one data. Economic data, for the most part, was to do with flash manufacturing and services PMI numbers out of the Eurozone and the US.
In the Eurozone, the flash PMI's were broadly weaker than expected, while in the US flash manufacturing showed signs of another increase, while services PMI was as expected. The US existing home sales data was also slightly below expectations, rising just 5.53 million compared to expectations of 5.59 million.
Looking ahead, it is likely to be another slow day. The German import prices data will be coming out followed by the US Richmond Fed manufacturing index data. The conference board's consumer confidence data is expected to slip to 116.2, compared to 118.9 previously.
EURUSD intraday analysis
EURUSD (1.1660): The EURUSD slipped to test the support at 1.1635 yesterday and price action has been since rising higher following the bounce off the support. We could expect to see some consolidation above 1.1635 in the near term, and further gains can come only on a breakout above the previous high. Failure to break past the previous highs near 1.1685 could signal a near term retracement. Below 1.1635, EURUSD could be seen testing the next lower support at 1.1475.
GBPUSD intraday analysis
GBPUSD (1.3030): The British pound posted a modest rally which saw price action testing the resistance level at 1.3025. As long as this resistance level holds, GBPUSD could be seen pushing lower in the near term. With the broader price action seen consolidating within the rising wedge pattern, the bias is to the downside, unless we get to see a convincing close above 1.3025. On the 4-hour chart, price action has been rather volatile with GBPUSD seen briefly breaking above 1.3025 but only to close back below this level. Support is seen at 1.2818 which could be tested in the near term if there is a reversal at 1.3025.
USDJPY intraday analysis
USDJPY (110.98): The USDJPY closed with a doji candlestick pattern yesterday. This comes near the identified support level at 101.80. A higher close is required to establish the upside bias in USDJPY, or we could expect to see further declines in the near term. On the 4-hour chart following yesterday's brief drop below 110.81, the current higher low that is forming could signal a reversal of the trend. Still, USDJPY needs to break above 111.08 in order to signal a move to the upside. Short-term resistance is seen at 111.78 followed by a move towards 113.05.