Intraday analysis 20-03-2018 – Daily Forex Market Preview
The U.S. dollar was on the back foot yesterday. The euro was seen retracing it’s the gains strongly which gains came amid investor uncertainty ahead of the FOMC meeting due on Wednesday.
Developments from Brexit included the EU and the UK striking a transitory deal. According to reports, the UK will remain in the EU until end of 2020 but with restricted powers. The British pound rallied on the news as the currency touched intraday highs of 1.4088.
Looking ahead, the economic calendar for the day will see the release of the inflation data for February from the UK. Economists forecast that inflation might have slowed down to 2.8% on a year over year basis in February. Core inflation is also expected to slow to 2.5% in February after rising 2.7% previously.
From the Eurozone, the German ZEW economic sentiment and the Eurozone ZEW economic sentiment reports will be released. Later in the day, the Eurozone consumer confidence data will also be coming out.
EURUSD intra-day analysis
EURUSD (1.2337): The euro currency was seen posting strong gains yesterday as price action posted a reversal following last week’s declines. However, the gains stalled near the resistance zone of 1.2363 – 1.2333 level. A reversal off this level could once again put the EURUSD back into the sideways range with the lower support at 1.2179 likely to be tested. With the Fed meeting due tomorrow, we expect to see the ranging price action continue. A breakout from either the resistance or the support level could potentially establish the direction in the currency pair.
GBPUSD intra-day analysis
GBPUSD (1.4025): The British pound was seen posting strong gains on the day led by the developments on the Brexit talks which the market viewed as being positive for the GBP. The currency pair was seen trading above 1.4063 level but the gains stalled after the trend line was tested from below acting as resistance. The current consolidation could see further gains coming in. There is also the potential for GBPUSD to form an inverse head and shoulders pattern following the reversal at the resistance level of 1.4059.
XAUUSD intra-day analysis
XAUUSD (1315.26): Gold prices were seen trading within the range after price action briefly touched down to 1307.80 level. We expect the downside bias to continue in the short term as gold prices could once again test this familiar support level. There is scope for price to potentially break down below 1307.80 region in which case, further declines could push gold prices to the 1300.00 round number followed by a test of support near the 1282 – 1274 level. To the upside, a close above the recent highs at 1319 could mean further gains toward 1328.00 level of resistance.
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