GBP slips on PM May's comments on Brexit
Daily Forex Market Preview, 09/01/2017
The British pound came under pressure in early Asian trading this morning as the UK's Prime Minister, Theresa May said that Britain would definitively break away from the EU, in a televised interview even as the country is yet to begin any negotiations with the European Union. The British pound was also hit by Friday's U.S. jobs report which sent the cable tumbling lower and giving up the strong gains made just days before. The UK's Supreme Court is also likely to give its judgment on whether the UK government should seek parliamentary approval before triggering Article 50 talks. On the economic front, the calendar is light today with mostly second tier data on the cards.
EURUSD intra-daily analysis
EURUSD (1.0524): EURUSD posted a reversal off 1.0600 price level on Friday to give up half the gains made the day before. Price remains trading within 1.0600 and 1.0500 levels with further bias likely to extend on a breakout from these levels. On the 4-hour chart price action remains fairly balanced although the current declines near 1.0533 could trigger near-term declines towards 1.0400 if the bearish momentum gains pace.The weekly chart on EURUSD shows prices being repeatedly rejected near the lows of 1.0400 which could indicate a short-term potential reversal to the upside.
GBPUSD intra-day analysis
GBPUSD (1.2194): GBPUSD has gapped lower on today's open with the price now seen testing 1.2200 support level. The follow-through from Friday's bearish price action could indicate renewed declines in GBPUSD. On the 4-hour chart, a session close below 1.2200 could signal further weakness to come although the price could still retest 1.2287 resistance level. Mind the Stochastics on the 4-hour chart which could post a bullish reversal on the divergence that is currently forming.
USDJPY intra-day analysis
USDJPY (117.47): USDJPY has pushed higher once again after falling below the support level at 116.00 last week. Price action remains within grasp of 118.00 resistance level which could be tested in the near term. Further gains can be seen coming only on a breakout above 118.00. The daily chart's Stochastics shows the potential bearish divergence that could be formed with the oscillator failing to confirm the highs in price. Still, further validation is required. On the 4-hour chart, price action remains bullish as resistance at 118.50 is clearly seen with price turning flat near this level.