Daily Forex Market Preview, 28/09/2016
The US dollar is looking to make a comeback with price action showing a positive close yesterday as flash services PMI came out higher than expected while US consumer confidence continued rose to 104.10, helping to lift the US dollar. Today, the markets will be tuned into Yellen's testimony and economic data which includes US durable goods orders. Besides Yellen's speech, Draghi and FOMC's Bullard are also due to speak.
EURUSD (1.1208): EURUSD closed just above 1.1200 handle yesterday with the previous numerous attempts to test 1.1300 having failed. Price action remains strongly range bound, and a convincing close below 1.1200 could signal further declines. On the 4-hour chart, we can see prices currently bouncing off the 1.1200 support. To the upside, a retest of the breakout level of the rising wedge pattern could offer a valid move with the potential for prices to drop lower. Watch for 1.1151 support to the downside. A breakout above the previous resistance of 1.1250 - 1.1239 could, however, put this downside bias at risk.
EURGBP (0.8622): EURGBP broke out from the median line yesterday failing to offer any pullback. However, following the breakout from the median line, we still expect a minor pullback into the price zone of 0.8671 - 0.8648. A reversal in this level could confirm the downside bias, for a test to 0.8600 followed by 0.8500 if the primary support fails to hold prices. On the daily chart price action closed bearish yesterday with a shooting star candlestick pattern being formed.
USDJPY (100.60): USDJPY remains trading close to the 100.00 support level, and we could expect to see another minor rally in prices. Resistance at 102.00 remains in sight as the price level also coincides with the daily chart's falling trend line which forms the descending triangle pattern. Therefore, the bias in USDJPY remains to the downside on a possible breakout below 100.00. On the 4-hour chart, price action is currently attempting to breakout above 100.61 Yen minor support level which has seen prices consolidating over the past few sessions. Above 102.00, further gains can see USDJPY potentially test 103.00 major resistance.