Daily Forex Market Preview, 2/23/2016
Losing over 2.0% at one point, the British Pound managed to recover some of the losses but closed on a bearish note yesterday. Prices are back to testing the 1.41 handle this morning but there is a scope for a rebound in prices in the near term. Meanwhile, the Euro also weakened against the Dollar yesterday trading just above the 1.10 handle. Further downside is likely in EURUSD which could potentially test the lows of 1.095 region. Today’s main event risk from the SNB Chairman, Thomas Jordan’s speech in Frankfurt.
EURUSD Daily Analysis
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EURUSD (1.10): EURUSD turned bearish yesterday and briefly traded near a 2-week low just above 1.10 support. Having broken the support zone near 1.113 – 1.1105, EURUSD could see further declines to 1.095 – 1.093. However, in the event that prices move to the upside, the rally is likely to be met with resistance near the recently broken support zone. Only a close above 1.113 will confirm any further upside bias in EURUSD. To the downside, below 1.093, there is a scope for a decline to 1.0825. The Stochastics oscillator is showing a bullish divergence which is likely to see EURUSD attempt to retest the broken support near 1.113 – 1.1105 to establish resistance.
USDJPY Daily Analysis
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USDJPY (112.2): USDJPY continues to decline lower following through from last week’s price action. Prices are currently close to the 112 support level following a break which could see 111 coming into the picture. The daily chart shows a potential bullish divergence being formed in USDJPY which could see a move to 117 resistance, but will be confirmed only on a bullish close off the 112 mark. On the 4-hour chart, following the hidden bearish divergence, price action is forming a bullish divergence off the current lows. A close above 113 could signal a continuation to 117, which would see the previous support level being tested for resistance..
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