Daily Forex Market Preview, 31/10/2017
The US dollar was seen pausing on its tracks on Monday. Lack of economic data saw the markets looking to the broader themes. President Trump is expected to announce his nomination for the next Federal Reserve Chair as Yellen’s term ends in February next year. Political developments on the day also saw the former campaign manager, Paul Manafort facing charges in the Russia scandal.
On the economic front, the Bank of Japan held its benchmark interest rates steady at today’s meeting. The central bank also retained its QE purchases steady signaling no change. The Japanese yen was seen trading stronger since Monday.
Looking ahead, the economic calendar today will see the Canadian GDP numbers. Economists estimate a 0.1% increase on the month in GDP. Later in the day, the BoC Governor Poloz is also expected to speak which brings some downside risks to the Canadian dollar. Later in the evening, New Zealand’s unemployment figures will be coming out. The unemployment rate is forecast to fall to 4.7% from 4.8% previously.
EURUSD intraday analysis
EURUSD (1.1636): EURUSD managed to close on a bullish note yesterday following two consecutive days of declines. Price action was however muted as the euro approaches the previously breached support level. If resistance is formed here, the EURUSD could be seen reversing the modest gains. Further downside could be expected as the currency pair is likely to follow through to the downside. The initial target level of 1.1552 is likely to be tested followed by further declines towards 1.5500 level of support. This will mark the minimum price objective to the downside, following the descending triangle pattern that was formed.
USDJPY intraday analysis
USDJPY (113.16): The USDJPY is showing sign of weakness as price action is currently seen hovering near the lower trend line of the rising wedge pattern. This pattern formed on the daily chart signals a possible downside price action. Support is seen at 110.70 which could be the likely target. On the 4-hour chart, USDJPY touched down to the support level at 113.00 briefly. We expect to see a modest rebound off this level as USDJPY remains flat within 114.00 and 113.00 price levels. A breakout to the downside below 113.00 will signal a move to the next support at 112.00 ahead of further declines that can be expected towards 110.70.
XAUUSD intraday analysis
XAUUSD (1275.48): Gold prices managed to post a modest rally as price cleared the minor support/resistance level of 1272. Having cleared this level, we could expect to see further gains that could push price towards the 1285 handle. However, in the medium term, the outlook for gold prices remains flat. A close above 1285 will be required in order to push prices higher towards the 1320 – 1324 region. To the downside, if price continues to consolidate near the 1272 level, we could expect to see a short-term decline towards 1262.
