By Orbex Blog
Daily Forex Market Preview, 05/09/2017
Safe haven assets were once again on the forefront as North Korea launched fresh missile tests. The skirmishes continued with South Korea following up with military drills while Japan engaged in building international support. Following the tests that occurred on Sunday, the US dollar was seen on the back foot as a result.
On the economic front, data yesterday showed that the UK’s construction PMI fell to a 12-month low in August at 51.1. The British pound was slightly weaker on the news but managed to hold on to the gains from last week. Earlier today, the Reserve Bank of Australia’s monetary policy meeting saw the central bank holding interest rates steady. Later in the week, the quarterly GDP and monthly retail sales data from Australia is expected. RBA Governor Lowe is also scheduled to speak during the day.
Looking ahead, the UK’s services PMI will be coming out today. Forecasts point to a modest print of 53.5 in August, slightly lower than July’s 53.8. In the US, the Fed’s Brainard is scheduled to speak followed by Kashkari and Kaplan. The US factory orders data is also expected with forecasts point to a 3.3% contraction.
EURUSD intraday analysis
Free Reports:
EURUSD (1.1906): The EURUSD settled into trading within Friday’s range yesterday but continues to remain trading below the 1.20 handle. On the intraday charts, EURUSD remains supported above the support level of 1.1882 which could keep the currency pair biased to the upside. Another retest to the minor resistance level at 1.1962 could be tested. The common currency remains trading flat at the moment and could see this continue into Thursday’s ECB meeting. A breakout from this range of 1.1962 and 1.1882 could signal the near-term direction in the currency pair. To the upside, 1.2000 resistance will need to be cleared to post further gains, while to the downside, 1.1688 remains the next key support level.
GBPUSD intraday analysis
GBPUSD (1.2930): The GBPUSD formed an inside bar in yesterday’s session. Price action remains flat at the moment, but the upside target to 1.3033 remains likely. The decline to 1.2920 yesterday signals a level of support, and thus, the upside could prevail. GBPUSD remains consolidating within the ascending wedge pattern and could remain on track to rally towards 1.3033 where resistance is yet to be established. This level also marks the right shoulder of the head and shoulders pattern that is evolving on the daily chart. However, in the event that GBPUSD slips below the support level at 1.2908, we can expect further declines that could push the cable down to 1.2829.
USDJPY intraday analysis
USDJPY (109.21): The US dollar turned weak against the yen earlier today as the price was seen pushing lower to test the familiar support level at 109.15. However, there is scope for an upside bounce as long as the support level is not breached and USDJPY manages to find support on a retest of the trend line that was breached recently. USDJPY could remain range bound within 110.72 – 109.15 levels in the near term. With the support at 109 region strongly being tested, the bias could be to the upside. However, expect further declines in the event that the 109.15 support is breached on a daily basis.
