The U.S. dollar closed on Friday with some gains although there were no major economic releases scheduled. The U.S. House is expected to vote on the tax bill on Tuesday which will potentially bring out the much anticipated tax cut proposals. The deal is expected to lift the sentiment in the U.S. dollar as the markets head into the holiday season.
Looking ahead, the economic calendar for today is light. The Eurozone final inflation figures will be coming out. Eurozone inflation is expected to remain steady at 1.5% while core inflation is expected to rise 0.9% as per the initial estimates.
The U.S. trading session is quiet with only the NAHB housing market data on the agenda.
EUR/USD intra-day analysis
EUR/USD (1.1761): The EUR/USD gapped lower this morning, but price action was seen reversing the losses, filling up Friday's closing gap. Price action remains supported above the 1.1730 level of support. This suggests a potential near term upside in prices. However, with the resistance level established near 1.1843 - 1.1822, the gains might be limited to this level. Only a break out above this resistance will signal any further gains that could see EUR/USD rally towards 1.1920 level of resistance. To the downside, the next support is seen at 1.1710 - 1.1688 level where the declines could be halted.
USD/JPY intra-day analysis
USD/JPY (112.63): The USD/JPY managed to close on a bullish note on Friday. Price action is currently looking a bit weaker with the lower high being formed. Further downside could be expected if the reversal fails to break past the previous high formed. On the 4-hour chart, the sideways range is established within 113.00 level of resistance and 112.04 level of support. We expect this range to be maintained with a breakout from this level expected to establish further direction in the near term.
NZD/USD intra-day analysis
NZD/USD (0.7014): The New Zealand dollar slipped last week but with price action supported above the 0.6981 level of support and minor higher low formed near the top, the bias remains to the upside. However, the double top pattern formed near the top could signal a downside breakout if the support level gives way. NZD/USD could be seen extending gains towards 0.7062 in the near term on a successful close above the double top pattern.