15 July, 2016
Daily Forex Market Preview, 15/07/2016
The Bank of England's decision to hold monetary policy steady saw the GBP surge against the US dollar, clearing 1.32 with 1.36 now coming into focus. EURUSD's price remains broadly flat but with the 1.110 resistance being cleared; we could expect to see an eventual rally to 1.120. Gold prices are seen establishing support at 1327.50 and could see a near term bounce to the upside. Watch USDJPY for a potential pullback to 102 - 103 support.
EURUSD Daily Analysis
EURUSD (1.112): EURUSD has been bullish for the past two days with price action seen clearing above 1.110 yesterday. Following the break of the inverse head and shoulders pattern yesterday, EURUSD remained largely flat with brief retest back to the broken neckline resistance of 1.110 to establish support. Further upside is likely to see EURUSD inch higher with 1.120 remaining in focus. A breakdown below 1.110 support could, however, invalidate the bullish bias.
USDJPY Daily Analysis
USDJPY (105.59): USDJPY touched 106 resistance and price action is likely to see a pullback. Support at 103 is likely to hold the declines in the near term, which is also confirmed by the hidden bearish divergence. This is more evident on the 4-hour chart. Support zone near 103 - 102 is most likely to be retested following which USDJPY could be seen pushing higher following a subsequent breakout above 106. To the downside, a breakdown below 102 could potentially bring the bearish bias back into the picture.
GBPUSD Daily Analysis
GBPUSD (1.339): GBPUSD cleared the 1.32 resistance on the daily chart with price action now seen testing 1.34. In the near term, a dip back to 1.32 could establish support following which further upside could be seen towards 1.36. Currently, price action is caught near the 4-hour resistance zone of 1.3488 - 1.342 region. Establishing support at 1.32 could pave the way for GBPUSD to potentially close the gap from the Brexit close at 1.36770.
Gold Daily Analysis
XAUUSD (1334.26): Gold prices posted a 9-day low yesterday testing 1320.31 before pulling back modestly higher. Support at 1327.50 is seen as holding prices which could see a near term correction in gold prices back to the 1350 handle. To the downside below 1327.50, the main support is seen at 1310.50, while to the upside 1350 remains the resistance level in question. A close above 1350 could, however, signal a sharper correction to the upside with gold likely to move back into the 1370 - 1350 range.
The U.S. dollar fell sharply across the board yesterday after the U.S. President Trump in an interview...
The U.S. dollar lost ground yesterday amid a slow trading day with lack of any clear catalysts for the markets. The speech by Janet Yellen did not offer anything new for the markets...
Mexico's inflation is likely to be boosted higher as the government announced that it would be hiking fuel prices by nearly one-fifth from January. The government said that fuel price ceilings will be capped between 14.2% - 20% above December's prices...
The Institute of Supply Management's Purchase Managers Index data is one of the most widely watched indicators. It is considered to be a leading indicator which gauges the strength in the U.S. manufacturing sector...
A fairly quiet Monday saw USDJPY retreating from its recent highs ahead of the big events this week. USDJPY has retraced its gains and now trades just above the support level of 104. The markets look to another slow day today with no major events on the tap, leaving the bulk of trading on the technical aspects...
A quiet economic calendar today ahead of the FOMC and BoJ meetings this week could keep prices fairly flat. The US dollar looks well supported moving into the FOMC meeting first which could keep the euro subdued...
Political developments in Japan and the UK saw the respective currencies react in the positive. While the GBP managed to close bullish on news that Theresa May is likely to be the new PM...
Markets were trading cautiously yesterday after the initial positive sentiment flipped led by declines in Oil. ADP payrolls report yesterday showed 172k jobs being added to a better than expected jobless claims as well...
Risk aversion resumed after the US returned from holiday with investor sentiment turning sour after a third real estate fund suspended trading after an increase in investor redemptions. Sterling slumped as expected, fueled by BoE lowering capital buffer requirements...