Daily Forex Market Preview, 03/10/2017
The US dollar got a boost as it managed to hold on to the gains. Economic data yesterday showed that the ISM’s manufacturing PMI rose for second consecutive month to 60.8 in September, accelerating from 58.8 last month. The data beat estimates and marked the highest level in over 13 years.
In the UK, the manufacturing PMI was weaker at 55.9 missing estimates and slowing from the previous month’s print of 56.7. Despite the headline weakness, the data showed that manufacturing sector continued to improve with new orders rising above the long-term average.
Looking ahead, the UK’s construction PMI data is on the cards today. Economists are expecting to see a stable reading in the construction sector at 51.1, unchanged from the month ago. The FOMC member, Powell is also scheduled to speak later today while on the economic front; the US vehicle sales data will be released.
EURUSD intraday analysis
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EURUSD (1.1713): The EURUSD extended the declines following the reversal off the 1.1822 resistance level and is now seen likely to test the initial support level at 1.1688 – 1.1672. This will complete the measured move of the descending triangle pattern that was formed on the 4-hour chart. In the short term, we can expect to see price bounce off this level but the range between 1.1822 and 1.1688 is likely to remain in a place. A breakout off this level will suggest further direction in prices. To the upside, above 1.1822 – 1.1843 resistance level, we can expect EURUSD move back into the upper range, although the bias for a downside breakout is stronger. Lower support at 1.1440 is likely to be tested in the medium term.
GBPUSD intraday analysis
GBPUSD (1.3255): The British pound was seen trading weaker yesterday with price action falling for the past two days. However, with price at support near 1.3236 we expect to see the declines to stall in the near term. Any bounces to the upside off this support level could be seen to be limited to 1.3361 where resistance could be formed following a brief spell of this region acting as support. A reversal at this level could signal GBPUSD to the downside, potentially breaking down below the support at 1.3236. The next support level is seen at 1.3161.
USDJPY intraday analysis
USDJPY (113.03): USDJPY initially posted a decline but managed to reverse course later in the day. Price action has now recovered to the upside and is currently seen breaking out above the resistance level of 112.88. We expect further continuation to push prices higher, although there is a risk of a lower high being formed. The consolidation at the resistance level could continue in the short-term with the potential for a downside decline. Support at 111.74 remains in the picture as the likely target to the downside. Above 112.88, USDJPY could be seen posting further gains but not before this resistance level is tested for support.
