Daily Forex Market Preview, 06/07/2017

The US Federal Reserve released the meeting minutes from the June monetary policy. The minutes showed that Fed officials debated the plans on how to start shrinking the balance sheet in the coming months. The debate was also mixed with some of the officials noting that the Fed had adequately prepared the markets, while some participants said that more proof of inflationary pressures was required.

Overall, the meeting minutes showed a broadly positive tone from the central bank. The US dollar index closed positive but gave up most of the intraday gains.

In the UK, services PMI fell to 53.4, lower than the median expectations of 53.6 and down from 53.8 that was registered in May. The British pound did not react much to the data.

Looking ahead, the private payrolls data from ADP/Moody’s will be released today. Economists polled are expecting a headline jobs report of 184k, lower than May’s 253k. The weekly US unemployment claims and the ISM non-manufacturing PMI data will also be coming out later in the day.

EURUSD intraday analysis

EURUSD (1.1337): The EURUSD extended the declines for three consecutive days after briefly breaking above the $1.1400 handle. Price action is currently seen consolidating near the 1.1357 level. Resistance is likely to be developed here which could push the currency pair towards 1.1300 in the near term. Below $1.1300, further declines could see EURUSD falling towards the support level at 1.1129. To the upside, considering the three day decline, if price action manages to stay supported above 1.1357, then we can expect some near-term gains back towards 1.1400 handle.

GBPUSD intraday analysis

GBPUSD (1.2938): The British pound closed on a moderately positive note yesterday which comes after two days of declines. Therefore, a higher close above yesterday’s high at 1.2948 will signal further upside in prices. Watch for the resistance level at 1.2975 to cap gains in prices. This could also potentially form a lower high in price. A reversal at 1.2975 will signal a decline back to the 1.2800 handle in the near term. With the PMI data released already from the UK, today’s ADP payrolls and Friday’s nonfarm payrolls report will be the key event to watch for.

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AUDUSD intraday analysis

AUDUSD (0.7598): The Australian dollar continued its descent, but price action closed with a doji candlestick pattern yesterday after two days of declines. This could potentially signal a reversal or a temporary pause in price. On the 4-hour chart, price action has formed a bearish flag continuation pattern, but the price fell to the lows of 0.7591 before consolidating at this level. In the near term, expect a bounce back to 0.7624 where resistance could be forming. A reversal from here could send AUDUSD down towards 0.7534 which marks the completion of the bearish flag pattern.

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