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16 January Forex daily review

Sergiy Zlyvko
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On Thursday, the dollar index fell back to 80.95 line. The U.S. dollar continues to hold a leading position against many currencies, but not the ability to update the dollar index intraday high casts doubt on its further growth. Consolidation at current price levels may be delayed until Monday. British currency and the Australian dollar yesterday against the U.S. dollar updated intraday and weekly lows and now also adjusted.

On Friday, the dynamics of the U.S. dollar will depend on the statistics from the UK and the US. If after a report on retail sales UK pound will continue to decline, it is likely updates the maximum and minimum of a pound. According to the forecast the growth of indicators is expected, so if the actual values will be lower than predicted values, it will give the dollar upward momentum.

At 13.30 GMT the report on the construction of new homes in the U.S. will be published and at 14.55 GMT preliminary index of consumer confidence by the University of Michigan in January will be published.

EURUSD on Thursday rolled back to 1.3640 mark and on the trading in New York it updated intraday low. That’s all fine, but the sellers were not able to drag bulls to 1.3560 and it starts to bother us. It is clear that pair had the support from EURGBP cross-rate, but if today the fall goes wrong, here again, we must be prepared for the increase of the euro to 1.3700. We stick euro’s decline as the main scenario. Hourly indicators are in the neutral zone. Europe can safely drive the euro down.

GBPUSD on European trading updated weekly low and rolled away to 1.6380. According to the latest quotes, the pair is trading at 1.6330. With the opening of Europe, we do not see immediate fall. See the perfect option – roll back to 1.6380 level and then drop to 1.6300. If the sellers on the opening of the European session immediately begin to sell the pound aggressively, then today 1.6220 mark would be target.

Australian Dollar on Thursday fell to 0.8775 after an employment data in Australia was weaker than expected and increased the chances of interest rate cuts to stimulate the economy. We do not see the completion of the descending wave and think there will be another minimum. The main scenario is waiting to drop to 0.8755.

Franc’s expectations are not met. Yesterday the head of the SNB acted and apparently investors do not like something in his speech so that USDCHF rate fell to 0.9030. 0.9030 level is a good support, so we would venture to suggest that the growth of the dollar is expected today and it will continue to increase to weekly maximum 0.9105 that buyers are going to rewrite.

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