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Slow start to a busy week for the U.S. dollar

Daily Forex Market Preview, 06/03/2017

The U.S. dollar closed on Friday on a weaker note despite the markets showing an increased probability for a rate hike in March. The economic calendar today is light with no major releases lined up. So far, Australia's retail sales figures showed a 0.4% increase on a month over month basis, as expected, reversing the 0.1% decline from the month before.

Fed Chair, Janet Yellen’s speech on Friday all but confirmed the Fed’s intention to hike rates at the March FOMC meeting by 25 basis points. The focus is of course this week’s payrolls report which could be a minor but last obstacle for the Fed to follow through.

Elsewhere, the economic calendar today will see the release of the Eurozone Sentix investor confidence and the U.S. factory orders which is expected to rise at a pace of 1.1%. All in all, a rather slow day with no major catalysts in sight for the moment ahead of this Wednesday's ADP payrolls report and Friday's nonfarm payrolls.

EURUSD intra-day analysis

1 EURUSDH4 0603

EURUSD (1.0603): EURUSD closed on Friday with some strong gains, closing back above the support level at 1.0551. Expect to see a near term pull back towards this support level (1.0551) for a reversal. This could potentially mean that EURUSD could be looking to post another leg of gains to the upside if support at 1.0551 is formed. Watch for short term resistance near 1.0600 while to the downside, 1.0521 will be critical as a break down below this level could mean further decline in prices. This week's ECB meeting on Thursday will be the main event for the single currency.

GBPUSD intra-day analysis

2 GBPUSDH4 0603

GBPUSD (1.2287): GBPUSD is posting a modest rebound following the break below 1.2400 support level last week. The current rebound to the upside could infer a short term retracement but the bias remains to the downside. Plotting the pitchfork, we can see that prices are currently looking to breakout to the upside. However, watch for a higher low to be formed for GBPUSD to retrace the declines as support at 1.2400 will be most likely tested for resistance in the near term. Establishing resistance at 1.2400 will signal a continuation in declines towards 1.2200.

XAUUSD intra-day analysis

3 XAUUSDH4 0603

XAUUSD (1233.26): Gold prices closed on a bearish note on Friday with an outside bar formation. Price action is expected to continue to push to the downside with a modest retest towards 1237.00 likely. Establishing resistance at 1237.00 will shift the previously established support level and will confirm the downside towards 1220.00. In the event that gold prices fail to reverse near 1237.00, then further upside will see a continuation back towards the 1250.00 handle.


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