US inflation data and Yellen testimony in focus
Daily Forex Market Preview, 17/11/2016
The markets have been quite flat this week with the bullish momentum on the US dollar pushing the USD crosses lower across the board. The US dollar index is seen stalling a few points above the 100.00 psychological level and yesterday's daily session closing with a spinning top is indicative of a possible correction to 99.00. Today, the US CPI figures will be important especially after producer prices data stayed flat. Fed Chair, Janet Yellen will also be speaking today which could be a major event risk for the US dollar.
EURUSD Intra-day Analysis
EURUSD (1.0701): EURUSD has been posting a steady decline for the past 8 daily sessions and price action is seen currently stalling near 1.0700 after breaking down the 1.0765 support. On the 4-hour chart, the recent price action has been consolidating into a descending wedge pattern which could be validated on a 4-hour close above 1.0700. This could signal a near term correction to 1.0800. With the Stochastics subdued into the oversold levels, the risk of an upside correction increases. Above 1.0800, EURUSD could be seen extending its short-term gains to as much as 1.0900.
USDJPY Daily Analysis
USDJPY (109.15): USDJPY closed with a doji pattern yesterday above 108.00 price level which could act as a short-term support. The Stochastics on the daily chart prints a hidden bearish divergence which could signal a temporary pause to the rally. A breakdown below 108.00 is required for a near-term correction down to 105.18. The 4-hour chart shows price moving in a steep rising triangle pattern with prices seen breaking out few 4-hour sessions ago. 108.20 - 108.00 remains the first level of support which needs to be breached for USDJPY to push lower to 105.18 which also points to a bearish divergence on the charts.
EURGBP Daily Analysis
EURGBP (0.8610): EURGBP remains stuck within the range of 0.8687 and 0.8586 which marks a support level. The Stochastics on the daily chart shows a hidden bullish divergence at this support indicating a pending corrective move to the upside. The broken support at 0.8888 remains in focus as the price could very well rally back to establish resistance here. Price action over the past four sessions has been choppy and moving sideways, but this pattern could break if the price can close above 0.8687 on a daily basis.