Daily Forex Market Preview, 22/08/2017
The US dollar gave up the gains with price action trading rather subdued. Lack of any clear market movers and the upcoming Jackson Hole Symposium saw traders taking a breather.
Economic data yesterday was quiet with no major releases. The German Bundesbank released its monthly forecasts where it remained upbeat on the German economy. In Canada, the wholesale sales fell 0.5%, falling well below estimates of 0.6% and after rising 1% in the previous month.
Looking ahead, Canada’s retail sales numbers are expected today. Estimates point to a 0.2% increase in retail sales on the month following a 0.6% increase in the previous month. Core retail sales are however expected to remain flat on the month after declining 0.1% previously. In the US, the Richmond Fed manufacturing index is also due later today. Forecasts expect the index to slip to 11 after rising to 14 previously.
EURUSD intraday analysis
EURUSD (1.1807): The EURUSD posted gains yesterday as the common currency rallied back above the price of 1.1800. The modest gains put the EURUSD back into the range of 1.1880 and 1.1800. This comes after price rebounded to the upside following the test of support at 1.1688. The upside breakout from the descending triangle puts the target for EURUSD towards 1.1882 which marks the previous resistance level. Any near-term dips in price could see a retest of the breakout level. This bullish bias will change only on a breakdown below the support at 1.1688. Below this support level, the next downside target for the EURUSD will be 1.1552.
GBPUSD intraday analysis
GBPUSD (1.2888): The British pound was seen trading subdued with price action trading flat for nearly four days after the price fell to 1.2847. A near-term upside is quite likely, however, with GBPUSD likely to test 1.3000 resistance level. On the 4-hour chart, we can see the short-term range at 1.2908 and 1.2847. A breakout from this level is required for GBPUSD to establish the near-term direction. The bias points to the upside given that the support level at 1.2847 has held up so far. However, in the event of a break down below this level, we could expect to see further declines in the short term.
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USDJPY intraday analysis
USDJPY (109.25): The USDJPY was seen slipped back with price action briefly falling to a 4-month low over the past two days. The daily chart shows an inside bar formation as a result, and a breakout from this level could establish the short term direction in the currency pair. Although USDJPY slipped below 109.08, the price has managed to rebound back above this level. This could potentially suggest some upside in price. Previous resistance at 110.72 remains the upside target, although the potential for a continued decline cannot be ruled out.