Daily Forex Market Preview, 26/07/2017
The US dollar managed to post a pullback following a string of losses in the previous sessions. The modest two-day recovery in the greenback saw the currency stabilizing. Politics continues to dominate the sentiment as the US Senate passed a motion to repeal the Obamacare or the Affordable Care Act.
Oil prices also edged higher yesterday after Saudi Arabia reiterated its commitment to maintain the crude oil export limit. The weekly crude oil inventory report is due to be released today with expectations of a drawdown of 3.3 million.
Looking ahead, economic data today includes the preliminary second quarter GDP data from the UK. Economists polled expect to see a 0.3% quarterly GDP growth rate in the period ending June. However, the GDP data could be weaker than expected.
Later in the day, the Federal Reserve will be releasing its monetary policy statement. No changes are expected but the Fed could signal that it will continue with its tightening policy. This includes further clarity that could be given on the balance sheet normalization.
EURUSD intraday analysis
EURUSD (1.1646): The EURUSD posted a fresh two-year high yesterday as price rallied briefly to a session high of 1.1712 before giving up most of the gains. The strong price action and the subsequent failure to keep to the gains suggests that the upside momentum is fading. The support level at 1.1635 continues to remain in focus as currently EURUSD is seen falling back to this level. Another leg to the upside, which if results in a lower high could suggest the head and shoulders pattern forming on the 4-hour chart. The breakdown below 1.1635 will signal a move towards the support level at 1.1475 which is yet to be tested currently.
GBPUSD intraday analysis
GBPUSD (1.3023): The British pound attempted to rally above 1.3025, but the gains were capped. GBPUSD posted a session high to 1.3083 before giving up the gains to settle rather flat. Price action could be seen pushing lower as a result, off the current resistance level. The rising wedge pattern signals a move to the downside with 1.2656 staying in focus. On the 4-hour chart, yesterday’s rally has led to a lower high being formed. This suggests that the downside momentum could gather pace. Watch for a daily close below 1.3025 following which, GBPUSD could be ready for a move to the downside.
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XAUUSD intraday analysis
XAUUSD (1247.57): Gold prices were seen slipping for a second consecutive day. This follows the doji candlestick that was formed on Monday. The bearish descent could signal a near-term decline in gold prices towards 1241.36 support level. In the near term, any upside gains could be seen capped near the 1252.71 which could act as resistance. Below 1241.36, gold prices could be seen slipping towards the 1224.47 level. This marks a major support level that could be tested in the near term.