The U.S. dollar did an about turn yesterday after the Fed Chair; Janet Yellen said that the prospects for further rate hikes increased with the economy near its maximum employment and inflation moving towards the Fed's 2% goal. U.S. consumer prices got a boost yesterday as headline inflation surged past 2% for the first time in more than two years. Looking ahead, the ECB press conference will be the major event to look forward to today.
USD/CHF daily analysis
USD/CHF (1.0069):USD/CHF posted a strong reversal off the 1.0061 - 1.0014 support level and could see a near-term move to the upside. Expect USD/CHF to continue making a minor correction to the upside towards 1.0231 - 1.0166 region where a potential reversal could take place thus forming the right shoulder of this evolving head and shoulders pattern. This could potentially mark the start of a correction lower towards 0.9850. However, failure to post a lower high near 1.0231 - 1.0166 could see USD/CHF rally back towards 1.0290 which will be the line in the sand. A breakout above 1.0290 will invalidate the bearish bias and put USD/CHF on the path to further gains.
NZD/USD intra-dayanalysis
NZD/USD (0.7149):NZD/USD gave up some of the gains after hitting a top near 0.7200. Price action remains biased to the upside with the bullish flag intact. The recent declines have sent NZD/USD back to test the top resistance of the bullish flag pattern near $0.7135. As long as this previously marked resistance which is now being tested for support holds out, NZD/USD is poised to th upside with the eventual target towards $0.7231. Currently, the bias is to the upside after the bullish close on the 4-hour session following the doji pattern.
XAU/USD intra-day analysis
XAU/USD (1202.21): Gold prices were bearish yesterday forming an inside bar just after closing above the key price level of $1200.00. With the daily chart showing a hidden bearish divergence, gold prices are likely to post a short-term correction to the downside, subject to breaking down below the 1200 support level that is being tested currently. On the 4-hour chart, price action is showing signs of exhaustion at the current level, but the Stochastics oscillator is showing signs of a near-term consolidation in gold prices. Therefore, expect gold to remain trading sideways within $1207.50 - 1195 before the range is broken. The bias remains to the downside, for a test towards $1181.50 and eventually to the next support at $1161.00.