Daily Forex Market Preview, 22/06/2017
The US dollar index closed bearish yesterday after price rallied to the technical resistance level of 97.40 – 97.50. This gave a brief relief to its counterparts which managed to post a modest recovery. The economic calendar was light yesterday, and with not much of data, traders focused on central banker speeches.
The BoE’s chief economist Andrew Haldane was hawkish as he said that he was in favor of a rate hike as well as pointing out that the stimulus program should be removed by the second half of the next year. The British pound recovered only to give up some of the gains on the day.
Looking ahead, the economic data today will see Canada’s retail sales numbers coming out. Retail sales are forecasted to rise 0.6% on the month on the core, reversing the 0.2% declines posted previously while headline retail sales are expected to rise 0.3%, following a 0.7% increase previously.
Among central bank speeches, BoE Member, Kristin Forbes, who voted for a rate hike will be speaking today while FOMC Member, Powell will be speaking in regards to the Fed’s policies.
EURUSD intraday analysis
EURUSD (1.1168): The EURUSD was seen posting a recovery yesterday with price action likely to extend gains in the near term. Minor support is seen forming at 1.1129, which looks to be potentially turning out into a head and shoulders pattern neckline support. A near term bounce could push EURUSD towards 1.1120 – 1.1253 level, where we could expect a near-term reversal. A validation of the head and shoulders pattern on the daily chart will signal further downside when the support at 1.1129 breaks which will push EURUSD towards 1.1000. On the 4-hour chart, we can expect EURUSD to struggle near the resistance of 1.1171, with a breakout above this level pushing the currency pair towards 1.12290.
GBPUSD intraday analysis
GBPUSD (1.2669): The British pound extended the declines down to 1.2600 and confirmed the first downside target. Price immediately reversed the losses and rallied back up to test 1.2685 resistance level before giving up the gains here slightly. In the near term, GBPUSD could remain range bound within 1.2688 and 1.2600. The bias remains to the downside, but a break out from either of these levels will see further gains or losses coming its way. To the upside, above 1.2688, GBPUSD will likely aim for 1.2800 while to the downside, below 1.2600, the next support at 1.2400 will be in focus.
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USDJPY intraday analysis
USDJPY (111.12): USDJPY remained subdued yesterday with price briefly testing the resistance at 111.61 once again. The resistance level is likely to hold out in the near term, meaning that USDJPY could be seen pushing down to the support at 110.78 – 110.52 region. Establishing support here could see USDJPY attempt to break past the resistance level to the upside. However, should USDJPY fail to establish support at 110.78 – 110.52, then further downside could see declines extending towards the lower support at 109.50 – 109.25.