Daily Forex Market Preview, 23/10/2017
The weekend snap elections called by Prime Minister Shinzo Abe saw the voters giving Abe a strong mandate. This pushed the Japanese yen lower as the US dollar briefly touched 114.00. Abe called the snap elections in a bid to consolidate power amid threats from North Korea.
In Spain, the government was seen moving ahead with its bid to dissolve the Catalonian parliament. A parliamentary vote is pending on Tuesday. The move saw the Catalonian parliament rejecting the government’s move. The euro was seen opening weaker on the day.
Looking ahead, the economic calendar today will see the flash manufacturing and services PMI from the Eurozone and the US No major events are lined up today ahead of this week’s BoC and the ECB meetings. The US dollar continues to briefly trade higher amid hopes of tax cuts from the Trump administration.
EURUSD intraday analysis
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EURUSD (1.1767): The euro gapped lower this morning following Friday’s bullish close. Any near-term gains are likely to be limited to Friday’s close following which we expect to see the common currency push towards the main support level at 1.1710 region. Price action is seen maintaining the bearish bias on the 4-hour chart with the descending triangle pattern has been developing. A breakdown below the support could signal further declines to come.
USDJPY intraday analysis
USDJPY (113.76): The USDJPY gapped higher on today’s open and price action looks to have cleared the resistance level at 113.00. Any near-term declines could be seen holding near this resistance level which could be tested for support. With price briefly testing the 114.00 level, USDJPY could be seen consolidating above the support level of 113.00. Failure to establish support at 113.00 could signal some weakness in the currency pair that could see price once again turning flat near this level.
XAUUSD intraday analysis
XAUUSD (1276.41): Gold prices touched down the support level at 1275 – 1274 level and this marks the downside correction in price following the rising wedge pattern. We can expect some consolidation near the support level with the potential for a short-term bounce in prices. Still, gold prices could be seen maintaining the sideways range within 1296 and 1274 levels of resistance and support. A breakout from this range will signal further gains or losses in price.
