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6 January Forex daily review

Sergiy Zlyvko
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On Monday, the U.S. dollar fell against most currencies. At the beginning, dollar’s decline was seen as a correction, which, however, was delayed due to rollback of published ISM service. PMI for the services sector the U.S. declined in December to 53.0 from 53.9 and was significantly lower than predicted value of 54.6. ISM index disappointed dollar bulls before Friday’s payrolls. GBPUSD fell back to 1.6435 mark. The EURUSD corrected to 1.3650.

The euro stood in the area between the 1.3630 and 1.3655 levels. It should be noted that the employment sub-index rose from 52.5 to 55.4 and by Friday will maintain dollar’s buyers by its value.

Since the currency pairs fell back and hourly used indicators are unloaded, then the main scenarios for today again we consider a dollar’s increase. Given that significant macro data does not go out on Tuesday, the market may remain sideways until Wednesday. The focus of the FX protocol remains on FOMC, as well as NFP with BoE and ECB.

By the way, the U.S. Senate approved the nomination of Janet Yellen to head the Federal Reserve System (Fed) in the USA. 56 senators voted for, 26 – opposed. She enters on February 1, 2014.

As expected, the EURUSD fell back to 1.3625 line just because of the ISM correction was obtained deeper. At the time of writing the EURUSD is at 1.3620. 1.3570 and 1.3505 marks will be target levels for today. In the absence of important news in the main scenario for Tuesday we consider only euro falling to 1.3570 level.

Despite the weak PMI service in the UK, the pound managed to fend 1.6335 and recover to 1.6435 mark. At 1.6335 GBPUSD met sell orders. At 8.20 GMT the rate is at 1.6390. According to the main scenario, we are waiting for a drop to 1.6320. The first significant level of resistance for the sellers will be 1.6365. If the market suddenly turns up, we must be ready to test 1.6465.

On Monday, the AUDUSD pair managed to hold above 0.8940 line. After a morning fall we expected that the pair will be back again to 0.8940 and begin another fall, but the price has already indicated at 0.8910. If there was no rollback, then it is possible to assume that the evening sellers will storm 0.8860 mark. To way to this level is free.

As expected, USDCHF rate from 0.9070 level rolled to the area of 0.8995-0.9015. From a minimum 0.9020 the bulls return losses. Currently the pair is trading at 0.9060. Since AO is unloaded, we assume that by the main scenario, the buyers take on the level of 0.9090. Basically half way is gone and there are not many way. If the buyers will be active in the European session, so the probability to reach 0.9090 is higher.

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