Daily Forex Market Preview, 24/08/2017
The US dollar remained weak yesterday as investors digested the news about the latest threats from President Trump. Speaking at an event in Arizona the day before, Trump threatened to shut down the government if he did not receive funding to build the wall at the Mexican border. Further to this, the fact that the US debt ceiling will be hit by October further accentuated the remarks.
On the economic front, new home sales fell 9.4% more than the forecasts of a flat reading. However, the previous three month new home sales data was revised significantly higher offsetting the declines. Markit's flash manufacturing PMI for the US fell to 53.3 falling below the estimates of 52.5 but services PMI rose to 56.9.
In the Eurozone, flash composite PMI continued to rise, especially with the manufacturing PMI hitting a six and a half year high. Services PMI for August, however, slipped to a 7-month low.
Looking ahead, the annual Jackson Hole symposium starts today. On the economic front, the UK's second revised GDP estimate for the quarter ending June will be coming out. Estimates point to no change in the quarterly GDP, but business investment is expected to decline.
EURUSD intraday analysis
EURUSD (1.1799): The EURUSD remains trading flat with price action posting some gains yesterday, reaching to 1.1815. The sideways range saw price briefly retesting the breakout level from the ascending triangle pattern. Resistance is seen at 1.1815 - 1.1820 with the potential for an upside breakout. This could send the common currency to test the previous resistance level of 1.1882 with further gains expected on a break above this resistance level. To the downside, a close below yesterday's low near of 1.1749 could keep EURUSD falling back to retest the support level at 1.1688.
GBPUSD intraday analysis
GBPUSD (1.2786): The British pound extended the declines below 1.2847 support level, and further declines could be expected in the near term. The next main support level is at 1.2628. In the near term, any retracement could be limited to the support level of 1.2847 which could be tested in order for resistance to be established. In the event that GBPUSD posts a stronger retracement, we can expect the sideways pattern to play out within the ranges of 1.2908 and 1.2847.
USDJPY intraday analysis
USDJPY (109.18): The USDJPY continues to consolidate around the support level of 109.15. The currency pair fell back to this level after earlier attempts to bounce off this level faded. The support level at 109.08 thus continues to remain a strong level of support. To the upside, USDJPY will be looking towards targeting the resistance level at 110.72. However, the potential for a downside breakout in prices could formalize. Below 109.08, USDJPY could initially slip towards 109.00 followed by further declines depending on the daily close.