Daily Forex Market Preview, 12/12/2016
With the FOMC meeting coming up on Wednesday, the U.S. dollar remains supported above the 100 psychological level as investors brace for another rate hike. Over the weekend, the meeting between OPEC and non-OPEC nations was largely fruitful on news that Russia has pledged to cut oil production by 300,000 barrels while agreeing that non-OPEC oil supply would be cut by 558k barrels per day. WTI crude oil futures for January delivery rose to session highs of $54.51 today, up 5.15% at the time of writing.
EUR/USD Intra-day Analysis
EUR/USD (1.0558):EUR/USD gapped lower on Monday's open at $1.0540 with the single currency looking to retest the 1.0765 resistance level once again. EUR/USD has been hovering above the 1.0500 support level but has shied away from testing this main support level over the past few weeks. Price action is likely to remain in a holding pattern within 1.0600 - 1.0500 into the FOMC meeting. The further downside could be expected on a break below the 1.0500 support level while to the upside above 1.0600, the main resistance which capped the rally last week is likely to be tested once again.
EUR/GBP Daily Analysis
EUR/GBP (0.8388):EUR/GBP is currently attempting to post a reversal off the 0.8373 support level in an attempt to form an inverse head and shoulders pattern. The neckline resistance at 0.8572 - 0.8585 could be the likely target to the upside with further gains coming on a break out above this level. It is a busy week for the British pound as the jobs data, inflation and the BoE meeting will weigh on the sterling. Failure to reverse off 0.8573 could, however, signal further downside towards 0.8330 support last tested on December 5th.
USD/CAD Intra-day Analysis
USD/CAD (1.3125):USD/CAD has gapped lower following Friday's doji close. Price action is close to the 1.3106 support level which could be tested over the next few days. A retest to the support level at 1.3106 could signal a hidden bullish divergence on the daily chart indicating a near-term upside move in prices. Resistance sits at the 1.3285 - 1.3255 region. On the 4-hour chart, following a retest of the 1.3106 support, a rebound off this support cannot be ruled out. A higher low forming off the 1.3106 support will be indicative of a near-term move to the upside with further gains likely to be reached above 1.3285 - 1.3255.