ECB Meeting In Focus

Daily Forex Market Preview, 26/07/2018

Economic data on the day saw the U.S. new home sales rising 631k on the month. This was lower than the forecasts.

The ECB’s monetary policy meeting will remain the key event for the day amid lack of any other fundamentals. No changes are expected from the central bank at this week’s meeting. Still, investors will be sifting through the data for clues on the forward guidance.

The ECB President, Mario Draghi is expected to maintain the status quo. Today’s meeting comes just after the ECB announced its QE tapering plans at the last month’s monetary policy meeting. The recent downtick in core inflation is expected to keep policymakers taking a cautious approach.

Elsewhere, the U.S. durable goods report will be coming out. The median forecasts point to a 0.5% increase on the core durable goods orders while headline durable goods are expected to rise 3.0% on the month.

EURUSD intra-day analysis

1-EURUSDH4-2607

EURUSD (1.1733): The EURUSD closed with modest gains by Wednesday’s close as price action closed back near the daily resistance level of 1.1730. With price still at the resistance, a breakout off this level is required to maintain the upside. The daily chart is showing the consolidation shaping into a triangle pattern. On the 4-hour chart price action is forming an inverse head and shoulders pattern with a minor neckline forming at 1.1742. A breakout above this level is required to push the currency pair toward the 1.1846 – 1.1824 level of resistance in the near term. Alternately, failure to break past the neckline resistance could push the currency pair back to 1.1688.

USDJPY intra-day analysis

2-USDJPYH4-2607

USDJPY (110.79): The USDJPY currency pair was seen closing lower on Wednesday. Price action broke past the minor bearish flag pattern clearing the support level at 111.13 – 110.85. Further declines could be triggered on the downside momentum. The lower support at 109.45 forms the next main target. However, in the event of a rebound to the upside, USDJPY will need to reclaim the level above 111.13. This will keep the currency pair trading back within the range of 112.28 level of resistance.

XAUUSD intra-day analysis

3-XAUUSDH4-2607

XAUUSD (1231.48): Gold prices were seen moving higher but overall price action remains subdued. The precious metal is expected to maintain the range within 1242 resistance and 1219 support. Further gains or declines are likely to be maintained on a breakout off this range. The bias remains to the upside if price action can break past the resistance level of 1247 – 1242 region. To the downside, a close below 1219 could see further declines pushing the precious metal down to 1200 level of support.

Australia Inflation Rises Modestly in Q2, Turkish Lira Moves Close to Its Record Low Against US Dollar

The U.S. dollar was seen trading rather mixed on Tuesday. Economic data was sparse. The commodity-linked currencies got a boost after reports of China’s new spending plans were released.

In the overnight trading session, the Australian inflation report showed that consumer prices advanced 0.4% on the month. This was the same pace of increase seen the month before. The trimmed mean CPI increased 0.5% on the quarter, matching the median forecasts.

On an annualized basis, inflation in Australia was seen rising 2.1%, just shy of the 2.2% increase that was forecast.

The Turkish Lira tumbled yesterday after Turkey’s central bank held its rates at 17.75%. TRY is trading at 4.8704 versus the greenback, close to its all-time low at 4.97.

Looking ahead, the economic data for the day is relatively light. The NY trading session will see the release of the new home sales report. New home sales are forecast to rise 671k during the month. This marks a slower pace of increase compared to 689k in the previous month.

The data comes following a weaker existing home sales report.

EURUSD intra-day analysis

EUR/USD 4H Chart
EUR/USD 4H Chart

EURUSD (1.1678): The EURUSD currency pair was seen closing with a Doji pattern following Monday’s reversal of the resistance level near 1.1730. A bearish follow through on the day could potentially push the common currency lower. Price action is seen consolidating around the short-term support/resistance level near 1.1686 regions. To the downside, we could expect a decline back to 1.1600 level. A break down below this level could trigger further declines toward 1.1540 regions. With the ECB meeting coming up tomorrow, the EURUSD is likely to remain subdued.

USDJPY intra-day analysis

USD/JPY 4H Chart
USD/JPY 4H Chart

USDJPY (111.29): The USDJPY currency pair was seen bouncing off the support level at 111.13 – 110.85 region. The brief rebound off this level was met with resistance from the falling trend line. The failure to break above the trend line indicates further consolidation. This also improves the prospects of a downside breakout. A close below 110.85 could send the U.S. dollar lower toward the 109.45 level of support. This will also validate the bearish flag pattern that is likely to emerge.

XAUUSD intra-day analysis

Gold 4H Chart
Gold 4H Chart

XAUUSD (1224.17): Gold prices were seen trading subdued as price action continues to remain support above the 1219 level. We expect to see this sideways pattern continue ahead of a potential breakout. To the upside, the resistance level at 1247 – 1242 remains a prime target. Establishing resistance here could, however, keep gold prices range bound within the current levels. To the downside, in the event of a break down below 1219, we expect to see the declines sending gold prices lower to test the 1200 level.

This article was written by Orbex

USD Holds Steady Despite Weaker Home Sales, Eurozone PMI Beats Expectations

The U.S. dollar was seen managing to stabilize on Monday and trading flat on Tuesday morning. Economic data was sparse. In the NY trading session, the existing home sales report showed a decline to 5.38 million. This was slower than the forecasts of 5.44 million.

The previous month’s data was revised to 5.41 million and the report marked a third consecutive month of decline in existing home sales.

Today, the German flash services and manufacturing PMI figures from Markit came out higher than analysts expectations at 57.3 compared to 55.5.

The Eurozone PMI covering the Eurozone and the U.S was also above economists expectations at 55.1 compared to 54.6 in the previous month.

The U.S. Richmond Fed manufacturing index will be coming out later with forecasts pointing to a decline in the index from 20 last month to 18.

EURUSD intra-day analysis

EUR/USD 4H Chart
EUR/USD 4H Chart

EURUSD (1.1688): The EURUSD currency pair was seen easing back from the resistance level of 1.1730 on Monday. Price action retraced some of the gains made from Friday. On the 4-hour chart, the minor support is seen at 1.1686 level. As price action is seen testing this level, a rebound of this support is required to keep prices floated to the upside. Failure to hold the support could trigger a decline back to 1.1600 level.

USDJPY intra-day analysis

USD/JPY 4H Chart
USD/JPY 4H Chart

USDJPY (111.30): The USDJPY currency pair extended losses as price action was seen trading near the support region of 111.13 – 110.85. The consolidation at this level could see the declines continuing to extend lower. A breakdown below the support could push USDJPY lower with the next support seen at 109.45. To the upside, price action is seen struggling to breakout to the upside after breaching the trend line. Any gains are likely to stall back bear the 112.28 resistance provided USDJPY breaks past the previous local highs.

XAUUSD intra-day analysis

Gold 4H Chart

XAUUSD (1222.14): Gold prices posted a modest rally but price action was seen easing back again. As gold prices approach the support level of 1219, we could anticipate a possible bottom in the making. Failure to reverse around this level will see further losses being extended. To the upside, price action will need to break past the previously established highs in order to rise to the resistance level at 1242.25.

This article was written by Orbex

Oil Rises as Trump Sends a Threat to Iran, US Dollar Trading Under Pressure

The U.S. dollar was seen weakening on Friday after the U.S. President Trump commented about the currency’s strength. Trump said that China and the EU, among other countries were manipulating their currencies and interest rates lower. He also said that the U.S. was hiking interest rates while the dollar gets stronger with each passing day and admitted that he was not happy with the Fed’s rate hike.

Earlier last week, Trump also expressed his views about the Federal Reserve notes that the central bank should stop tightening monetary policy.

On Monday morning, the American President continued his comments attack. This time it’s against the Iranian President, Hassan Rouhani.

Oil prices gain on Monday on the escalation between the US and Iran. Crude Oil rose 1.25%, trading at $69.11, Brent oil rose 1.77% to trade at $74.33.

Economic data from Friday revealed that Canada’s inflation rate advanced 1.4%, beating estimates of a 0.6% increase.

Looking ahead, the economic data for the day is relatively quiet. The U.S. existing home sales report is due today with forecasts showing an increase of 5.46 million. In the Eurozone, the consumer confidence report is expected to remain unchanged at -1.

EURUSD intra-day analysis

EUR/USD 4H Chart
EUR/USD 4H Chart

EURUSD (1.1728): The EURUSD currency pair was seen closing near the previous resistance level of 1.1730 on Friday before slightly pulling back. The currency pair is expected to breakout from this resistance level in the near term if the bullish momentum continues. To the upside, the common currency could be seen extending the gains toward the next main resistance level of 1.1960 – 1.1920 level. On the 4-hour chart time frame, price action continues to remain to trade sideways. The breach of the minor support/resistance level suggests a pullback to 1.1686 ahead of further gains.

USDJPY intra-day analysis

USD/JPY 4H Chart
USD/JPY 4H Chart

USDJPY (110.91): The USDJPY extended strong losses on Friday as anticipated. The break down below the 112.28 level saw price action posting strong declines as a result. Friday’s price action saw prices testing the major falling trend line that was breached. This is likely to act as a dynamic support in the near term. A break down below this level is required which could push the currency pair lower to the next main support at 111.13 – 110.85 level.

XAUUSD intra-day analysis

Gold 4H Chart
Gold 4H Chart

XAUUSD (1231.96): Gold prices were seen extending the gains after the doji pattern that was formed last week. After a modest period of consolidation near the 1219 level, gold prices eventually broke back into the falling price channel. With the 4-hour chart signaling a possible hidden bearish divergence, we expect price action to push lower. However, the declines are likely to be limited. To the upside, the major resistance level at 1242 – 1247 is likely to be the upside target.

This article was written by Orbex

UK Inflation Eases, Pound Continues to Fall on Disappointing Retail Sales

Data from the UK saw the release of the inflation figures. Consumer prices in the UK were seen rising at a slower than expected pace of 2.4%. The median forecasts expected a print of 2.6%. Core inflation was also seen slowing, rising at a pace of 1.9%.

The UK’s retail sales figures dropped unexpectedly in June. Sales declined by 0.5% in June compared to a growth of 1.4% in May. YoY Retail sales grew by 2.9, below analysts expectation of 3.7%. Pound hits a 10-month low near 1.30 versus the US dollar.

In the Eurozone, headline inflation increased by 2.0% as estimated by the preliminary inflation report but core inflation rate was seen rising at a pace of 0.9%, which was slower than the preliminary estimates of 1.0%.

Data from the U.S. showed that building permits increased 1.27 million missing estimates of 1.33 million while housing starts also moderated at a pace of 1.17 million.

Earlier in the day, Australia’s jobs report showed that the unemployment rate held steady at 5.4%. The employment change surged, rising 50.9k during the month, beating estimates of 16.7k.

In the U.S. trading session, the Philly Fed Manufacturing index is expected to rise to 21.6. FOMC member Quarles will be speaking later in the afternoon.

EURUSD intra-day analysis

EUR/USD 4H Chart
EUR/USD 4H Chart

EURUSD (1.1650): The common currency was seen falling to intraday lows of 1.1606 before recovering toward the end of the day. The EURUSD closed on a bearish note and the consolidation near the 1.1606 level continues. The main resistance level is seen at 1.1730 and the currency pair is expected to maintain its range within these levels. A breakout above 1.1730 resistance could signal near term gains toward 1.1846 – 1.1824 in the short term.

USDJPY intra-day analysis

USD/JPY 4H Chart
USD/JPY 4H Chart

USDJPY (112.71): The USDJPY currency pair was seen easing back following the rally toward the 113.11 handle. Price action on the daily chart closed with a doji which comes near the top end of the rally. A bearish close today could potentially signal a near term pull back in prices. Support at 112.28 remains the key level of interest in the short term. A breakout below this level could signal further declines to the next main support level seen at 111.13.

XAUUSD intra-day analysis

Gold 4H Chart
Gold 4H Chart

XAUUSD (1224.43): Gold prices were seen extending the losses on the day as price action fell just short of the 1219.74 level of support. Despite pulling back to close the day flat, early trading today suggests a renewed decline in price action. The Stochastics on the 4-hour chart indicates a higher low which could signal a near term rally to the upside. Gold prices are expected to pull back toward 1242.25 level where resistance is likely to keep a lid on the gains.

This article was written by Orbex

Pound Falls on Brexit Concerns, UK Inflation Rate Hike in Doubt after Inflation Data

The U.S. dollar was seen posting strong gains on Tuesday. The rebound came amid the U.S. industrial production rising 0.6% on the month. The Fed Chair Powell started his two-day testimony to the U.S. Congress. In his testimony, the Fed Chair maintained the hawkish rhetoric that the central bank should continue tightening monetary policy.

Elsewhere, the UK’s monthly jobs data showed that the unemployment rate remained at 4.2% while the average earnings increased 2.5% matching estimates but slower than a revised 2.6% from the previous three months.

The British Pound continues its fall on Wednesday morning, trading at 1.3087, down 0.18%. The pound falls on reports that Theresa May could face a defeat on the latest Brexit Vote.

The UK’s Office for National Statistics released the inflation report today. The data showed an increase of 2.4, below economists expectation of 2.6 which put August rate hike in doubt.

Core inflation rate is expected to rise 2.1%, the same pace as the month before. Data from the Eurozone will see the final inflation figures. Headline consumer prices are expected to rise 2.0% while core inflation rate is tipped to rise at a pace of 1.0%.

The Fed Chair Jerome Powell is expected to continue with his second day of testimony to Congress.

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EURUSD intra-day analysis

EUR/USD 4H Chart
EUR/USD 4H Chart

EURUSD (1.1654): The EURUSD currency pair was seen stalling near the resistance level of 1.1730 and turned lower on the day on Tuesday. Price action was seen giving up the gains made from Monday and the daily chart’s bearish engulfing pattern is likely to suggest some downside. On the 4-hour chart, the declines could push the EURUSD currency pair lower toward 1.1600 level where support could be formed. However, with the Stochastics on the 4-hour chart turning to the oversold level, we could expect to see a reversal in the currency pair.

USDJPY intra-day analysis

USD/JPY 4H Chart
USD/JPY 4H Chart

USDJPY (112.93): The USDJPY currency pair was seen rebounding off the support level at 112.28 and rallied to fresh highs on Wednesday. Price action, however, remains doubtful near the current top with the Stochastics on the 4-hour chart posting a lower high. Another leg in the decline is expected. The sharp gains in the currency pair could see a minor correction back to 112.28. In the event that this level fails to hold the declines, we could expect to see the steeper correction toward 111.13.

XAUUSD intra-day analysis

Gold 4H Chart
Gold 4H Chart

XAUUSD (1228.01): Gold prices were seen falling to a fresh 12-month low on Tuesday. Price action is currently consolidating after slipping to lows of 1226.14. Further declines could push the price of the precious metal down to 1219 level which is another major support level that could be tested. To the upside, any gains are likely to be limited to the 1242 handle.

This article was written by Orbex

Global Stocks Mixed, Us Dollar Slips Ahead of Fed Chair Powell Testimony

The U.S. dollar was seen trading mixed on Monday and edges lower on Tuesday morning. Economic data was supportive of the greenback. The U.S. retail sales report showed that headline retail sales increased 0.5% on the month while core retail sales rose 0.4%.

The U.S. Empire State Manufacturing index was seen rising to 22.6 on the index, up from 20.3 which was forecast but lower than 25.0 from the previous report.

In the overnight trading session, the quarterly inflation report from New Zealand showed that consumer prices advanced at a pace of 1.5% annually. On a quarterly basis, consumer prices rose 0.4% missing estimates of a 0.5% increase.

Looking ahead, the BoE Governor Mark Carney is scheduled to speak today. His speech comes ahead of the monthly labor market report. The UK’s unemployment rate is expected to remain steady at 4.2% while wage growth is forecast to rise at a steady pace of 2.5%.

The NY trading session will see the Fed Chair Powell’s testimony to Congress. Investors will be looking to see if the Fed Chair maintains his hawkish views on the economy. The U.S. industrial production and capacity utilization rate is also expected to be released.

EURUSD intra-day analysis

EUR/USD 4H Chart
EUR/USD 4H Chart

EURUSD (1.1719): The euro was seen extending the gains on Monday against the U.S. dollar. Despite a strong patch of economic releases, the euro managed to rise to intraday highs of 1.1725. Price action has now cleared the support/resistance level of 1.1686. This is expected to keep the bias to the upside. Any dips are likely to stall back near the 1.1686 level. The currency pair is now likely to attempt to rally toward the next main resistance level at 1.1960 – 1.1920 level.

USDJPY intra-day analysis

USD/JPY 4H Chart
USD/JPY 4H Chart

USDJPY (112.35): The USDJPY currency pair was seen testing the price level near 112.28. The 4-hour Stochastics is pointing to a hidden bullish divergence. However, failure to break past the previous highs established at 112.71 could, however, signal a potential move to the downside. The break down below 112.28 could trigger further declines to 111.13 level.

XAUUSD intra-day analysis

Gold 4H Chart
Gold 4H Chart

XAUUSD (1241.67): Gold prices continue to consolidate below 1242.25 level of support. With the currency pair failing to make fresh lows, price action is likely poised for an upside breakout. The price level of 1247 – 1242.25 could potentially offer some short-term resistance. However, a breakout above this region could trigger further gains that could push gold prices to test the 1258.21 level in the next leg to the upside.

This article was written by Orbex

New Zealand Dollar Slightly Higher as Inflation Expected to Remain Steady

The U.S. dollar was seen posting gains on Friday as price action remained strong toward the close of the week. The economic data was quiet for the most part. Switzerland’s PPI figures released earlier in the day showed a 0.2% increase on the month as expected.

The U.S. import prices fell 0.4% missing estimates of a 0.1% increase instead. Previous month’s data was revised higher to 0.9%.

Earlier in the day, China’s GDP report showed that the economy advanced 6.7% matching estimates. Industrial production was, however, weaker, rising just 6.0% and falling short of the 6.5% forecast.

The economic data for the day includes the U.S. retail sales figures. Economists forecast that headline retail sales increased 0.4% on the month. This marks a slower pace of increased compared to the 0.8% gain seen the month before. Core retail sales are also forecast to rise 0.4%.

New Zealand will be releasing its quarterly CPI later tonight. Forecasts point to a 0.5% increase in inflation during the second quarter. The New Zealand Dollar gained 0.07% on Monday morning, trading at 0.6772.

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EURUSD intra-day analysis

EUR/USD 4H Chart
EUR/USD 4H Chart

EURUSD (1.1683): The EURUSD was seen falling to a fresh 10-day low on Friday as price action touched 1.1608 on the day. However, the intraday declines recovered as the currency pair managed to close slightly bullish. Price action was seen closing near 1.1695 on Friday’s close which marks the previously breached support level. A rebound off this level is required in order to confirm the upside in prices. If the EURUSD posts a reversal near this price level we expect to see further declines that could send the common currency falling toward 1.1600 regions.

USDJPY intra-day analysis

USD/JPY 4H Chart
USD/JPY 4H Chart

USDJPY (112.48): The USDJPY currency pair rallied to a six month high on Friday before giving up the gains. Price action quickly reversed back to 112.28 level. As long as this minor support holds, the currency pair could be seen consolidating at the currency levels. In the event of a break down below this level, then USDJPY could extend the losses toward the next lower support at 111.13. However, the major falling trend line is expected to act as dynamic support in the short term.

XAUUSD intra-day analysis

Gold 4H Chart
Gold 4H Chart

XAUUSD (1243.21): Gold prices were seen posting declines on the day as price touched fresh intraday lows of 1240.81. The recovery in the declines saw gold prices trading back near the price level of 1242. A breakout above this level is required to confirm the upside momentum that could be building up. Failure to close above 1247 could, however, trigger further gains that could push the price of spot gold toward the 1258 handle. To the downside, we expect to see price action consolidating at the current levels.

This article was written by Orbex

Euro Steady Ahead of ECB Meeting Minutes Release

The markets were seen trading in a modest risk-off mode on Wednesday. This came after the U.S. administration threatened China with a fresh set of tariffs. The ongoing NATO summit in Brussels was also another cause for concern with President Trump accusing German of being complicit with Russia over the gas pipeline proposal.

On the economic front, the data from the U.S. showed that producer prices index rose to a fresh six-year high. On a month over month basis, headline PPI increased 0.3% while core PPI which excludes food and energy prices gained 0.2%.

Driving PPI higher was another month of strong gains from the energy prices.

The Bank of Canada held its monetary policy meeting where it raised rates by 25 basis points to bring Canada’s interest rates to 1.50%. The BoC also signaled that there was room for further rate hikes.

The European trading session today will kick off with the release of the German and French final inflation figures. According to the preliminary inflation reports headline CPI is expected to rise 0.1% respectively.

Later in the day, the ECB will be releasing its monetary policy meeting minutes. The minutes cover the June ECB meeting where policymakers announced a taper to the QE program and an exit from QE by December 2018.

The U.S. trading session will see the release of the monthly consumer price index data. Economists forecast that headline CPI is expected to rise 0.2% on the month while core CPI is expected to rise 0.2% on the month as well.

EURUSD intra-day analysis

EUR/USD 4H Chart
EUR/USD 4H Chart

EURUSD (1.1674): The EURUSD currency pair was seen posting declines yesterday. Price action fell to a four day low following a reversal of the resistance level. On the 4-hour chart, the close below the previously established support level indicates further declines might be in store. However, the Stochastics oscillator is currently in the oversold level and indicating a hidden bearish divergence. A reversal near the current levels could push the EURUSD back toward testing the next resistance level at 1.1846 – 1.1824.

USDJPY intra-day analysis

USD/JPY 4H Chart
USD/JPY 4H Chart

USDJPY (112.28): The USDJPY currency pair was seen maintaining the bullish trend as price action is currently testing the highs near 112.00. The breakout comes as the USDJPY managed to close above a multi-year falling trend line. Price action at the current levels coincides with a minor resistance level that is being tested. A reversal of this level could keep USDJPY within the range of the trend line and the horizontal resistance level.

XAUUSD intra-day analysis

Gold 4H Chart
Gold 4H Chart

XAUUSD (1242.25): Gold prices posted strong declines on the day on Wednesday. Price action was seen falling to the lows of 1242 level of support. However, the rebound of this level is expected as price action touches the previously established lows. The decline to the support level also coincides with a retest of the falling trend line as well. A daily close above 1247 could potentially trigger an upside rally in prices. The longer-term resistance level is seen at 1282 which could be tested in the medium term.

This article was written by Orbex

Canadian Dollar Steady as BoC Expected to Hike Interest Rates

The UK’s first monthly GDP release by the ONS showed that the economy had advanced 0.3% on the month in June. However, the positive GDP growth report was offset by manufacturing production which rose 0.4% missing estimates of a 1.0% increase. Construction output, however, beat estimates, rising strongly by 2.9% on the month. Industrial production, on the other hand, weakened, falling 0.4%.

Data from Germany showed that the ZEW economic sentiment index fell to -24.7 while the Eurozone economic sentiment index fell to -18.7.

The economic calendar today will see investors shifting focus to the BoC’s monetary policy meeting. Chances of a rate hike remain high as the economists polled expect to see the BoC raising rates by 25 basis points at today’s meeting.

The BoC meeting will be concluded by the press conference. Later in the day, the Bank of England Governor, Mark Carney is also expected to speak. From the Federal Reserve, the FOMC member, Williams is due to speak as well.

On the economic front, the U.S. producer prices index data is expected to show a modest slowdown to 0.2% increase in both core and headline PPI for June.

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EURUSD intra-day analysis

EUR/USD 4H Chart
EUR/USD 4H Chart

EURUSD (1.1729): The EURUSD currency pair was seen posting modest declines on the day as price action remains consolidating around the 1.1730 level. The daily chart signals a hidden bearish divergence to the Stochastics which suggests a near-term decline. The initial support at 1.1686 remains the first level of support that could be tested. In the event of a break down below this level, then the EURUSD could be seen testing 1.1600 level to the downside.

USDJPY intra-day analysis

USD/JPY 4H Chart
USD/JPY 4H Chart

USDJPY (111.07): The USDJPY currency pair was seen giving up the gains as the currency pair slipped below the 111.13 level. However, price action has seen currently making up for the declines. However, a retest of 111.13 is likely to occur. Failure to break out above 111.13 could signal a move to the downside. The USDJPY currency pair could be seen settling into a range between 111.13 and 110.62 level. A breakout from this level could trigger a short-term trend in the direction of the breakout.

XAUUSD intra-day analysis

Gold 4H Chart
Gold 4H Chart

XAUUSD (1250.82): Gold prices continued to decline following the brief retest of the 1263 resistance. The decline back to the 1247 handle invalidated the bullish flag pattern as price action returns to the familiar support level. As long as 1247 support holds, gold prices could be seen holding on. However, in the event of a break down below, the next support level is seen in 1242. A reversal of this level is required for gold prices to maintain the range within the levels.

This article was written by Orbex

UK Monthly GDP Rises to 0.3%, Pound Remains Weak

The British pound was seen losing 0.47% on the day on Brexit related developments. First, the UK’s Chief Brexit negotiator, David Davis resigned which was later followed by the UK’s foreign minister, Boris Johnson resigning as well.

The exit of the two key figures was however seen by many as the UK’s ability to opt for a soft Brexit with the EU.

The release of the UK’s monthly GDP numbers came out slightly above expectation. The UK economy grew by 0.3% in May compared to 0.2% in April.

On the economic front, data was limited on the day. German trade balance was seen at 20.3 billion euro, matching estimates and posting a slight increase from 19 billion euro registered the month before.

Data from the Eurozone is relatively quiet for the most part.

The NY trading session is light with the release of Canada’s housing starts and building permits report.

EURUSD intra-day analysis

EUR/USD 4H Chart
EUR/USD 4H Chart

EURUSD (1.1745): The EURUSD currency pair was seen giving up some of the gains made on Monday. After rallying to intraday highs of 1.1790, the common currency gave up part of the gains. In the near term, we expect the EURUSD to extend the declines toward 1.1688 where support is likely to be established. With price action trading steadily within the rising price channel, we expect to see a short-term correction. A rebound off the 1.1688 support level could trigger renewed upside in price.

USDJPY intra-day analysis

USD/JPY 4H Chart
USD/JPY 4H Chart

USDJPY (111.11): The USDJPY currency pair was seen posting a strong reversal as price action moved back above the resistance level of 110.62. The current gains are expected to hit the previous highs near 111.13. There is scope for price action to post a reversal here as USDJPY could settle in a range within the levels mentioned. A breakout from these levels could trigger the next direction in the currency pair.

XAUUSD intra-day analysis

Gold 4H Chart
Gold 4H Chart

XAUUSD (1259.01): Gold prices extended the gains to hit the 1263 level of resistance. The bullish flag pattern seems to be validated but we expect a near-term pullback. Gold prices are likely to retest the breakout level around 1256. A reversal of this level could signal further upside in price. However, gold prices will need to break out above 1263 resistance level in order to target the 1273.47 region which marks the measured move of the bullish flag pattern.

This article was written by Orbex

Markets Open to a Quiet Trading Day

The U.S. dollar was seen trading weaker on Friday despite a broadly positive jobs report. The U.S. economy was seen adding 213k jobs during the month of May with revisions to the previous two months of data showing a net gain of 37,000.

The Greenback weakened after the unemployment rate ticked higher to 4.0% on a modestly higher participation rate. This suggested that more people were looking for jobs. Wage growth was seen subdued, rising just 0.2% on the month missing estimates of a 0.3% increase. The US Dollar continues to trade lower on Monday morning as Friday’s data showed a weak wage growth.

Elsewhere, Canada’s jobs report showed that the economy added 31.8k jobs but the unemployment rate had ticked higher from 5.8% to 6.0%

Following a busy Friday, the markets open this week on a quiet note. The German trade balance numbers are coming up during the European trading session. Among central bank speeches, the MPC member, Broadbent is expected to speak.

The Eurozone Sentix investor confidence report will be coming out later in the day.

Economic data from the NY trading session is quiet with only the U.S. consumer credit report scheduled.

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EURUSD intra-day analysis

EUR/USD 4H Chart
EUR/USD 4H Chart

EURUSD (1.1764): The EURUSD currency pair was seen extending gains on Friday. Price action rallied briefly to highs of 1.1767 before easing back. With price action trading near the resistance level of 1.1730, we expect to see a near-term pullback. The EURUSD currency pair is expected to maintain its range within the levels of 1.1730 – 1.1540. A breakout from this level is only expected to establish the next leg of direction in the currency pair. To the upside, the main resistance level at 1.1960 – 1.1920 is expected to stall the gains with the possibility that the breached resistance at 1.1730 will turn to support.

USDJPY intra-day analysis

USD/JPY 4H Chart
USD/JPY 4H Chart

USDJPY (110.42): The USDJPY currency pair was seen attempting to break out from the resistance level of 110.62 but failed to do so. This is expected to trigger some downside momentum. The support at 109.57 – 109.43 is most likely to be retested in the near term. Alternately, in the event that the USDJPY reverses the losses and breaks out above 110.62, further gains are likely with USDJPY expected to test a major multi-year falling trend line around the 112.00 regions.

XAUUSD intra-day analysis

Gold 4H Chart
Gold 4H Chart

XAUUSD (1254.20): Gold prices continued to trade flat despite the bullish flag pattern, raising concerns on a potential invalidation. The failure to retest the resistance area of 1263 – 1260 is expected to keep prices flat with the possibility of a breakdown. The lower support is seen at 1247 handle. Gold prices could very well trade sideways within the said levels unless there is a strong catalyst to help the precious metal to breakout from this range.

This article was written by Orbex

ADP Payrolls Set to Rise. Fed Minutes in Focus

Economic data was light on the day especially with the U.S. markets closed yesterday. Australia’s retail sales report showed a 0.4% increase on the month beating estimates of a 0.3% increase with the previous month’s data being revised higher to 0.5%.

In the UK, the services PMI showed that activity in the sector increased strongly, rising to 55.1, beating estimates of 54.0 and rising from May’s level of 54.0.

The markets will be looking to a busy day especially where the U.S. dollar is concerned. The ADP private payrolls report is expected to show that the U.S. economy added 190k jobs in the private sector. This marks a higher pace of job growth compared to May’s increase of 178k.

The ISM non-manufacturing PMI is forecast to slip to 58.3 in June compared to 58.6 in May. However, there is a scope that the actual data could surprise to the upside.

Later in the evening, the FOMC meeting minutes will be released. The minutes cover the June FOMC meeting where interest rates were hiked and the Federal Reserve had announced a fourth rate hike for the year.

EURUSD intra-day analysis

EUR/USD 4H Chart
EUR/USD 4H Chart

EURUSD (1.1662): The EURUSD currency pair was seen posting a Doji pattern on the daily chart. Price action continues to remain trading subdued within the range established from last Friday. The strong consolidation is likely to result in a breakout from the range. To the upside, the resistance at 1.1730 is likely to keep a lid on the price action while to the downside, a break down below 1.1610 could trigger a dip back to the previous lows at 1.1540.

USDJPY intra-day analysis

USD/JPY 4H Chart
USD/JPY 4H Chart

USDJPY (110.33): The USDJPY currency pair managed to post a modest retracement back to 110.62 before easing back. The currency pair is likely to extend the declines with the support at 109.57 – 109.43 likely to be tested. Alternately, in the event of a reversal before reaching the support, the USDJPY currency pair could be seen rising back to the 110.62 level with the possibility to breakout higher. This could ensure further gains in store in the currency pair.

XAUUSD intra-day analysis

Gold 4H Chart
Gold 4H Chart

XAUUSD (1256.13): Gold prices continued to inch higher as price action is seen approaching the resistance level at 1263 level. A reversal of this level could trigger a possible rebound in price action. This could keep gold prices maintaining the sideways range within 1263 resistance and 1247 support. A breakout from either of these levels could establish the new short-term direction in prices.

This article was written by Orbex

Sterling Steady as UK’s services PMI Beats Expectations

Sentiment in the markets was somewhat mixed with the safe haven, Japanese yen and gold prices rising on the day. The U.S. dollar was however seen stronger across most of the currencies.

Yesterday, the UK’s construction PMI came out stronger than expected as the index rose to 53.1. This beat forecasts of an increase to 52.6. The U.S. factory orders were seen rising 0.4% which also beat estimates of a 0.1% increase. The previous month’s data was seen revised to show a 0.4% decline.

Looking ahead, the economic data for the day will cover the services PMI from the Eurozone, including numbers from Germany and France. The final services PMI are forecast to remain unchanged at 55.0 as signaled from the preliminary estimates.

The UK’s services PMI came at above expectations at 55.1 compared to 54.0. The U.S. markets are closed today due to the Independence Day bank holiday. The markets are expected to remain trading light toward the U.S. trading session.

EURUSD intra-day analysis

EUR/USD 4H Chart
EUR/USD 4H Chart

EURUSD (1.1664): The EURUSD currency pair was trading subdued as it extended modest losses on the day. Price action was contained within the price range established from last Friday. While there was a rebound on the intraday charts off the support level near 1.1610 the gains were limited. Price action will need to clear the highs from Friday in order to extend toward the resistance level of 1.1730. To the downside, we expect the currency pair to remain supported above 1.1610.

USDJPY intra-day analysis

USD/JPY 4H Chart
USD/JPY 4H Chart

USDJPY (110.43): The USDJPY currency pair posted declines on the day following the breakout from the steeply rising wedge pattern. The close below 110.62 level suggests that in the near term, a minor retracement to the losses could see price retesting this level. As long as the price level of 110.62 holds, we can expect to see the downside prevail. USDJPY is likely to decline toward the lower support region of 109.57 – 109.43 level where support is pending a retest.

XAUUSD intra-day analysis

Gold 4H Chart
Gold 4H Chart

XAUUSD (1257.03): Gold prices managed to maintain the bullish momentum as price action rose close to the resistance level near 1263. In the near term, the retracement indicates that price could pull back toward the 1250 handle. As long as price action is supported above 1247 we expect gold prices to remain biased to the upside. A breakout above 1263 resistance is needed for prices to extend the gains toward the 1282.50 handle.

This article was written by Orbex

ISM manufacturing PMI Rises Strongly in June

The U.S. dollar was seen posting strong gains on the first trading day of the third quarter as the greenback rose 0.4% on the day. The gains coincided with the ISM’s manufacturing PMI rising to 60.2 in June beating estimates which forecast a decline to 58.5. Construction spending was also higher at 0.4% during the month of May.

In the UK, the manufacturing PMI from Markit showed that activity in the sector rose to 54.4, beating estimates of 54.1 and rising from 54.3 in the previous month.

Data for the day will be dominated by the UK’s construction PMI which, according to the median estimates is expected to rise modestly to 52.6. In May, construction activity was seen at 52.5.

The Eurozone retail sales data is due later with forecasts showing a 0.1% increase on the month. Canada’s manufacturing PMI is also due this afternoon.

Data from the U.S. will see the release of the factory orders report which is expected to show a 0.1% increase after factory orders posted a decline 0.8% the month before.

EURUSD intra-day analysis

EUR/USD 4H Chart
EUR/USD 4H Chart

EURUSD (1.1631): The EURUSD currency pair was seen giving up some of the gains made from Friday. However, price action looks to be subdued as the EURUSD was seen briefly testing the support level at 1.1610. As long as this price level holds, the EURUSD can be seen attempting to make another go to the upside. The resistance at 1.1730 remains a key level of interest and a breakout above this level could trigger further gains toward 1.1846 – 1.1824. To the downside, if the EURUSD falls below 1.1610, then we can expect the declines to stall near 1.1577.

USDJPY intra-day analysis

USD/JPY 4H Chart
USD/JPY 4H Chart

USDJPY (110.84): The USDJPY currency pair broke past the resistance level of 110.62 quite comfortably. In the near term, any declines are likely to hold out at 110.62 which could now serve as support. The sharp parabolic gains, however, come at a risk of a downside breakout. A close below 110.62 could signal a move lower toward the support at 109.57 – 109.43 regions.

XAUUSD intra-day analysis

Gold 4H Chart
Gold 4H Chart

XAUUSD (1239.59): Gold prices continued to ease lower as price action was seen falling below the 1242.25 handle. The close below this level could trigger further declines with a potential eventual test toward the 1200 mark. To the upside, gold prices will need to post a strong recovery above 1247 in order to confirm any signs of a recovery in the near term. The Stochastics oscillator continues to remain moving in the oversold level which could potentially trigger a short squeeze at the current levels. Resistance at 1263 remains the upside target in the near term.

This article was written by Orbex

Daily Forex Review – Markets Open a New Trading Month

The euro is trading sharply lower on Monday as the German crisis might affect the European politics and economy.

The common currency is falling after good economic data was released on Friday. Economic data showed that headline consumer prices increased 2.0% on the year ending June 2018. This was broadly in line with the median estimates. Core CPI which strips the volatile food and energy prices were seen rising at a slightly slower pace of 1.0% on the year ending June. The month before, core CPI increased 1.1%.

Elsewhere, the UK’s GDP data showed a slightly higher revision. Data from the ONS showed that the GDP advanced 0.2% in the three months ending March 2018. This was a higher revision compared to the 0.1% increase that was reported in the previous two initial estimates.

Looking ahead, the economic calendar for the day will see the release of the manufacturing PMI reports from Spain, France, and Italy. In the UK, the monthly manufacturing PMI data came out at 54.4 down, slightly above analysts expectations.

The U.S. trading session will see the release of the ISM’s manufacturing PMI data. Median estimates forecast that manufacturing activity eased to 58.2, down from 58.7 from the month before.

EURUSD intra-day analysis

EUR/USD 4H Chart
EUR/USD 4H Chart

EURUSD (1.1656): The EURUSD currency pair was seen posting strong gains on the day on Friday. With the strong momentum led breakout, price action is expected to eventually reach the resistance level of 1.1730. A retest of this level which failed to hold as support could keep the gains in check. However, a breakout above 1.1730 could potentially push the euro currency towards testing the minor resistance level of 1.1846 – 1.1824 region. This could potentially establish the 1.1730 level as support forming a new higher corridor for the currency pair in the short term.

USDJPY intra-day analysis

USD/JPY 4H Chart
USD/JPY 4H Chart

USDJPY (110.91): The USDJPY currency pair managed to seek out some gains as price action briefly broke past the resistance level of 110.62. Still, the fact that the breakout above level was not triggered by strong price action leaves the risk of a correction in prices. The 4-hour Stochastics remains in the overbought level which also validates this view. In the event of a correction, the USDJPY currency pair could be seen holding the declines onto the rising trend line once again.

XAUUSD intra-day analysis

Gold 4H Chart
Gold 4H Chart

XAUUSD (1251.26): Gold prices were seen posting a rebound after price action was seen consolidating near the lower trend line of the falling price channel. Still, the overall momentum remains weak and biased to the downside. The immediate resistance level near 1263 region is unlikely to be tested in the near term but remains a possibility. For the short term, a temporary bottom has been formed near the 1247 region. As long as prices hold above this level we expect to see gold prices moving in a sideways range.

This article was written by Orbex

UK Final GDP Revision to Stay Unchanged

The U.S. dollar was seen holding its ground across some of the currency pairs despite the U.S. first-quarter GDP report showing a downside revision. Data from the Commerce Department showed that the first quarter GDP in the U.S. increased at a pace of 2.0% compared to the previous estimates that suggested the economy increased at a pace of 2.2%.

The greenback shed some losses but quickly recovered on the day.

The economic calendar is somewhat busy today with the data from the Eurozone covering the French consumer spending and the preliminary inflation reports. This is later followed by the preliminary inflation figures for the Eurozone.

In the UK, the current account figures are expected followed by the final revised GDP for the first quarter of the year.

Economists polled expect to see no change which could confirm that the UK’s economy grew at one of the slowest paces of just 0.1%.

In the U.S. trading session, the core PCE price index is expected to show a 0.2% increase on the month while personal spending and income are expected to rise 0.4% each.

EURUSD intra-day analysis

EUR/USD 4H Chart
EUR/USD 4H Chart

EURUSD (1.1629): The EURUSD currency pair was seen trading subdued on Thursday but price action quickly gained momentum into the early Asian trading session today. The rebound off the 1.1540 support is expected to see some upside prevailing in the currency pair. In the near term, the EURUSD currency pair is expected to struggle near the resistance level of 1.1730. A breakout above this resistance is required for price action to test the next main resistance level at 1.1846 – 1.1824. To the downside, as long as the current support holds, we expect the currency pair to either trade sideways or biased to the upside.

USDJPY intra-day analysis

USD/JPY 4H Chart
USD/JPY 4H Chart

USDJPY (110.68): The USDJPY currency pair was seen slowing inching higher as price action was seen testing the resistance level of 110.62 once again. A convincing breakout above this level could trigger further gains to the upside. However, we expect to see price action mostly consolidating near the resistance level. While there is scope for the USDJPY to pull back, this could potentially lead to an evolving inverse head and shoulders pattern that could turn bullish for the currency pair. The support at 109.57 – 109.43 remains a key level of interest in the near term.

XAUUSD intra-day analysis

Gold 4H Chart
Gold 4H Chart

XAUUSD (1249.38): Gold prices continued to post the declines as price action was seen briefly falling below the 1250 handle in the near term. This also coincides with price action testing the lower trend line of the falling price channel. In the event of a rebound, gold prices could be seen extending the gains back to the 1263 level where resistance is most likely to be formed. The Stochastics on the 4-hour chart remains a bit overstretched into the oversold levels currently.

This article was written by Orbex

U.S. Final Revised GDP for Q1 to Show No Revisions

The RBNZ’s monetary policy meeting held in the overnight session showed that the central bank left the overnight cash rate unchanged at its meeting as widely expected.

The New Zealand dollar was seen falling sharply on the RBNZ’s decision as a result.

The day ahead is relatively quiet with the U.S. trading session marked by the release of the final GDP figures from the U.S. Economists forecast no changes to the GDP as the final first-quarter GDP is expected to be confirmed growing at a pace of 2.2%.

Among central bank speeches, the BoE’s Andy Haldane will be speaking followed by the FOMC member Bostic.

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EURUSD intra-day analysis

EUR/USD 4H Chart
EUR/USD 4H Chart

EURUSD (1.1568): The EURUSD currency pair was seen extending the declines on Wednesday following the bearish engulfing candlestick pattern formed the day before. Price action was seen falling sharply on the day to test the support level at 1.1540. On the 4-hour chart, the Stochastics oscillator has been posting a hidden bullish divergence with a lower low while price action as formed a higher low. This potentially indicates a move to the upside. Price action will need to clear the support area of 1.1610 – 1.1540 region in order to confirm the upside.

USDJPY intra-day analysis

USD/JPY 4H Chart
USD/JPY 4H Chart

USDJPY (110.19): The USDJPY currency pair rebounded with some momentum but price action was seen failing to break past the rising trend line. A reversal at this level is expected to see price action posting declines back to the support level of 109.57 – 109.43 region. As long as the support holds, the USDJPY currency pair is expected to maintain a sideways range. However, we expect the support level to break which could potentially set the stage for USDJPY to push lower toward the 108.90 level of support in the medium term.

XAUUSD intra-day analysis

Gold 4H Chart
Gold 4H Chart

XAUUSD (1253.09): Gold prices continued to extend the declines with the bearish momentum slowly gaining pace. The price of the precious metal extended to a 6-month low. However, we anticipate a modest rebound in the near term. Price action is expected to retrace the declines back to the 1263 level which previously served as support. Establishing resistance at this level could signal a possible reversal yet again with gold prices likely to fall further in the near term.