By Orbex Blog
Daily Forex Market Preview, 22/01/2018
The U.S. dollar was seen closing with some gains on Friday, in the hope that Washington would pass the spending bill. Although it was cleared by the U.S. House, the bill stalled in the U.S. Senate. Late night talks over the weekend did not yield many results and lawmakers are expected to reach some agreement today.
The Euro was seen attempting to recover the losses on Friday but after rising to an intraday high of 1.2294, the currency pair gave up the gains and settled lower to close at 1.2223.
Looking ahead, the economic calendar is light today. The Eurogroup meetings are scheduled throughout the day while in the NY trading session, Canada will be releasing its wholesale sales data. Economists forecast an increase of 1.0% for the month.
EURUSD intra-day analysis
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EURUSD (1.2223): The EURUSD is seen consolidating near the 4-year highs as Friday’s attempts to recover failed. Price action as seen on the 4-hour chart shows the EURUSD seeking dynamic support off the median line. We expect a short term rebound off this level as EURUSD could remain range bound heading into Thursday’s ECB meeting. The upside gains are called near the current highs of 1.2282 level. Further gains can be expected only on a convincing close above this level. To the downside, the support at 1.2184 remains in focus and this could form the short term range for the EURUSD.
USDJPY intra-day analysis
USDJPY (110.76): The USDJPY continues to hover around the 110.70 level of support. The strong bullish close last week near this level and the short term dip indicates a temporary base being formed. On the 4-hour chart, minor resistance is seen at 111.00 – 110.88 region. USDJPY will need to close above this level in order to target 111.61 resistance level. To the downside, if the resistance holds the gains, we could expect USDJPY to move back into its previous range. A break below the previous lower support at 110.40 will be key but this level could hold the declines in the short term.
NZDUSD intra-day analysis
NZDUSD (0.7274): The NZDUSD continues to maintain its hold near the 4-month high. However, failure to post any higher highs at this level indicates that the currency pair could be looking to post a correction. On the 4-hour chart, immediate support is seen near the current higher lows at 0.7283. A break down below this level is required in order for NZDUSD to confirm the downside correction. The kiwi could be targeting 0.7160 followed by an eventual move towards testing the support at 0.7000 level.