Daily Forex Market Preview, 06/10/2016
The US dollar continued to maintain its bullish momentum going after yesterday's soft ADP payrolls report was offset by stronger than expected ISM non-manufacturing PMI and factory orders. Gold prices remained under pressure although prices pulled back from lows of 1262.16 to close the day at 1266.70. While GBP and the JPY remained weak, price action in EURUDS continues to remain flat with prices seen consolidating near 1.1200 level for nearly the past 8-days. The economic calendar is fairly quiet today ahead of the all important payrolls report and manufacturing data from the UK due tomorrow.
GBPUSD (1.2716): GBPUSD managed to close bullish yesterday after posting a fresh 31-year low at 1.2685. Although the PMI's this week came out stronger than expected, the Sterling remains under pressure due to the Article 50 talks that have pushed the GBP to new lows this year. While it is difficult to anticipate a reversal point from the current lows, watch for any potential rebound towards 1.2800 followed by 1.3000 resistance levels which could see some renewed selling pressure build up.
USDJPY (103.48): USDJPY remains well bid with prices now shy of the 104.00 resistance level. However, following the upside breakout from the descending triangle pattern, a pullback to retest 102.00 is likely. On the 4-hour chart, following the doji that was formed a few sessions ago, support is seen at 103.00. A break below this support could trigger further downside in USDJPY towards 102.00 initially followed by 101.61.
AUDUSD (0.7598): AUDUSD attempted to post a rebound near the neckline support of 0.7610 yesterday, but prices quickly reversed lower. The 4-hour session closed below the neckline with a strong bearish candle, and we could expect to see further downside in the near term. The minimum objective of this pattern sits at 0.7555. However, traders should note the doji pattern that was formed yesterday which could see a risk of a short term move back to the upside towards 0.7649. A daily close below the doji's low of 0.7593 is essential to keep the bearish momentum going.