Daily Forex Market Preview, 08/09/2017

The common currency rallied to reclaim the $1.20 handle yesterday despite the European Central Bank making no changes to monetary policy. However, the central bank raised its growth forecasts as it said that GDP in the region is expected to grow 2.2%, up from 1.9% as previously forecast. The ECB president Mario Draghi also said that a decision to taper its monetary stimulus program would be taken at the October meeting.

Elsewhere, economic details included Japan’s final GDP which came in at 0.6%, slightly below the median estimates of 0.7% on the quarter. In the Eurozone, the final revised GDP confirmed that economic activity grew at a pace of 0.6% in the quarter ending June 2017.

Looking ahead, the UK’s industrial, construction and manufacturing production data is due to be released today. In the US, the wholesale inventories data is expected to show a 0.4% increase on a month over month basis.

EURUSD intraday analysis

EURUSD (1.2064): The EURUSD rallied past the 1.2000 handle yesterday which saw price action following through with the bullish momentum. Currently, the euro currency is seen testing 1.2058 highs from August 29th. A breakout above this level will be required for the common currency to push higher. However, the new range of 1.2058 where resistance is seen and 1.1882 where support is seen could keep the common currency to consolidate within these levels. Minor support at 1.1962 could be tested in the near term in case of a pull back off the 1.2058 resistance level.

GBPUSD intraday analysis

GBPUSD (1.3128): The British pound has managed to post gains as price action rallied above the 1.3033 resistance level. Currently, GBPUSD is testing the trend line break out level which could still offer some near term resistance. The current extension above 1.3033 weakens the potential head and shoulders pattern. If support is established at 1.3033, then the GBPUSD could be seen posting stronger gains in the near term.

USDJPY intraday analysis

USDJPY (108.17): USDJPY slipped to 108.26 marking the lower end of the support zone that has been established. This potentially means that the US dollar could be posting further losses on a daily close below this level. The double bottom pattern that initially formed has been breached and exposes the downside in the currency pair. The next main support is at 108.00 level with major resistance likely to be established at 109.15.