Daily Forex Market Preview, 05/10/2017

The non-manufacturing PMI released by the Institute of Supply Management (ISM) yesterday showed an increase as the index rose to 59.8 in September. It was the highest level since September and beat estimates. The ADP private payrolls data was also released yesterday which showed that private hiring added 135k jobs in September which was slightly above the estimates of 131k. Previous month’s payrolls were revised down to 228k.

The US dollar was seen trading flat as investors were focused on the upcoming nomination of the Federal Reserve Chair. The US President Trump is expected to announce his nominee in a few weeks time.

Looking ahead, the economic calendar today will see the release of the ECB’s meeting minutes which could be a major catalyst for the euro currency. Fed member speeches today include Jerome Powell and Harker. Powell is widely tipped to be one of the contenders for the next chair of the Federal Reserve.

EURUSD intraday analysis

EURUSD (1.1755): The euro currency was slightly bullish but the currency gave up some of the gains as it retreated from the intraday highs. With the ECB minutes coming up today, the intraday charts shows EURUSD consolidating into a descending wedge pattern. In the short term, we expect the downside in the EURUSD which could see another retest to the support zone of 1.1720 – 1.1688. A retest of this support could result in a breakout to the upside. Resistance at 1.1822 – 1.1843 remains the most likely target. Failure to hold the declines near 1.1720 could signal further declines in the currency pair and could shift the bias to the downside.

GBPUSD intraday analysis

GBPUSD (1.3233): The British pound has retreated from its highs. Data this week showed that the PMI’s signaled sluggish growth as manufacturing was weak and construction PMI showed a contraction in the sector. Only the services PMI managed to rise slightly higher in comparison. GBPUSD is seen testing the support level near 1.3223. We expect to see a reversal at this support level which will keep GBPUSD range bound within 1.3360 resistance and the support level. A breakout from this level will signal further direction in the currency pair. We expect a breakout to the downside, especially is resistance is formed near 1.3360.

XAUUSD intraday analysis

XAUUSD (1274.25): Gold prices continue to remain flat, trading near the support level of 1275 – 1273. This is likely to signal a bottoming in prices. The falling trend line will be the major trigger as a breakout from this trend line could see gold prices attempting to test the initial resistance level at 1290 followed by a continuation towards 1300.00. To the downside, in the event that price action fails to break out higher, we could expect the support level to give up, that could push gold prices lower towards 1262.83 initially.