Daily Forex Market Preview, 25/08/2017
The ECB President Mario Draghi and the Federal Reserve Chair, Janet Yellen will be speaking at the Jackson Hole Symposium today. Remarks on monetary policy, from both the central bankers, are expected to be the major market moving events today. However, the risk of not addressing monetary policy also looms which could keep the markets in check.
On the economic front, the UK’s second revised estimate was released yesterday. Data from ONS showed that the GDP advanced 0.3% in the second quarter. However, business investment was seen to be flat, missing estimates of a 0.2% increase. In the US existing home sales rose 5.44 million, slower than the month before.
Looking ahead, the economic calendar today will see the US durable goods orders and the German Ifo business climate.
EURUSD intraday analysis
EURUSD (1.1796): The EURUSD was trading subdued with price action quite limited. However, the common currency is seen holding up near the 1.1800 level. This tight price action could potentially signal a breakout in the near term. While price action continues to trade in the ascending triangle pattern, there is also a potential inverse head and shoulders continuation pattern forming near the top. Neckline resistance is seen at 1.1825 on the 4-hour chart. A breakout above this level could potentially push EURUSD to the upside, initially to test the previous resistance at 1.1882. Further gains can be expected on a breakout above this level.
GBPUSD intraday analysis
GBPUSD (1.2809): The British pound closed with a doji pattern yesterday below the support level of 1.2874. Price action could see a short-term reversal if the British pound manages to close back above this support. A retest back to 1.3033 cannot be ruled out if the retracement begins. On the 4-hour chart, the support level remains in focus. Any short term gains could see GBPUSD retest this level for resistance which will keep the bias to the downside. The next main support level is seen at 1.2628.
USDJPY intraday analysis
USDJPY (109.63): The USDJPY was seen bouncing off the price level near 109.15. Price action has been showing strong consolidation at this level for the past five trading sessions. This could suggest a near term breakout to the upside. However, resistance at 110.72 is likely to cap any gains. USDJPY could, therefore, be seen trading within the current range of 110.72 and 109.15. The newly drawn falling trend line will be in focus as a breakout above this level is required to maintain the gains.