The US dollar managed to hold on to the gains it made on Friday as the U.S. markets were closed on Monday. Trading was broadly limited ahead of Wednesday's release of minutes of the FOMC meeting. With the USD posting some gains, most other major currencies were seen easing back, albeit only slightly.
Bank of England Governor Mark Carney was speaking at an event in London yesterday, but he did not touch upon monetary policy.
Looking ahead, the economic calendar today will see the release of the German producer price index. Economists forecast that producer prices might have increased 0.3% on the month. The ZEW economic sentiment for Germany and the eurozone will be coming out later. Both measures are expected to show moderation following the previous month's increase. Data from the U.S. is scarce, with eurozone consumer confidence data dominating the NY trading session as well.
EUR/USD intra-day analysis
EUR/USD (1.2387): The EUR/USD was seen trading within a small range yesterday but price action managed to close on a bearish note. With price now trading close to the support level established around 1.2363 - 1.2330, we expect to see a modest rebound in the near term. The minor breached support level at 1.2443 could now turn to resistance on a rebound. A break down below 1.2330 is required in order for EUR/USD to post further declines in the medium term. In the event that the currency pair closes above 1.2443 on a daily basis, we could expect to see price continuing to consolidate above the mentioned support level.
GBP/USD intra-day analysis
GBP/USD (1.3978): The British pound was seen posting declines after last Friday's retest to 1.4121. The declines could be seen extending towards 1.3902 level in the near term. On the 4-hour chart, the lower high being formed near the resistance suggests that the downside momentum could push GBP/USD towards the mentioned lower support. Any short-term bounce to the upside could be limited to the previous minor resistance level of 1.4035. A close above this level could suggest price moving back to retest the major resistance area of 1.4182 - 1.4127.
NZD/USD intra-day analysis
NZD/USD (0.7363): The New Zealand dollar remains firmly supported above the 0.7333 level with the declines off the recent highs being only gradual. However, we expect that in the near term, NZD/USD could be seen pushing lower to test the support level at 0.7333 region. A rebound off this level could keep the bias positioned to the upside with further gains likely on a close above the previously established highs of 0.7430. To the downside, in the event that the support at 0.7333 fails, we can expect further declines to push the currency pair lower to the support level at 0.7160.