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11 February Forex daily review

Sergiy Zlyvko
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During the Asian session on Tuesday, market participants were focused on data from the Australian economy. In particular, the National Bank reported the business confidence index reached 8 points in January, which was the highest level since September 2013. Increased confidence in the business community of the country supported the demand for the Australian currency and it was able to gain a foothold in tandem with the U.S. dollar to 0.9000 mark. However, the session high for this pair is set even higher – near the mark of 0.9050, which was made possible due to the weaker U.S. dollar, which was observed at the beginning of the American session.

With the opening of trading in the U.S., the dollar was under pressure until the moment as the text of the upcoming speech of the head of the Federal Reserve System was published. This information supported the U.S. dollar, as from the text it became clear that Janet Yellen intends to adhere to the policy of his predecessor Ben Bernanke. But during the performance of Yellen traders’ sentiment repeatedly changed. This was due to the fact that the new Fed chairman has not been without mention of the difficulties in the labor market, which could slow the pace the quantitative easing program reducing.

As a basic scenario for today a continuation of EURUSD pair decrease to the 1.3500 level is cosidered. Target level of this wave is located at the bottom 1.3400 mark. At the same time we cannot exclude the rebound from the current lows. In this case, the wave counting of the pair will be revised. News background environment will also be restrained. The main focus of the market today is attracted to the statements of the chairmen of the Bank of England and European Central Bank. But, in addition, inflation data in Switzerland is interesting for market participants.

Yesterday’s macroeconomic calendar does not contain events that may affect the dynamics of markets. Stock indices are actively growing again, which is supporting USDJPY pair. EURUSD was unable to overcome the resistance in the level of 1.3680, GBPUSD – the resistance at 1.6485. Performance of the new chairman of the U.S. Federal Reserve did not bring any surprises, so the market reaction to Janet Yellen’s speech has been relatively quiet. Australian dollar during the Asian session rose sharply again. China’s macroeconomic statistics, which showed an increase in China’s trade surplus to $31.86 billion from $23.65 billion forecast has become the reason for its buying.

Data on industrial production in the Eurozone will have a limited impact on the dynamics of the single currency. Strong data will support EURUSD, weak – pressure. For GBPUSD pair quarterly report of the Bank of England’s inflation and Mark Carney’s performance will be important. If the central bank will give reason to expect an earlier interest rate rises, GBPUSD will actively rise. Otherwise, the pair resumes a downward correction. Today also European Central Bank President Mario Draghi will perform, but it is doubtful that we will hear something new from him.

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