Daily Forex Market Preview, 8/11/2017
The markets were seen trading subdued yesterday as the US dollar briefly maintained the gains. The euro was seen weakening as economic data showed that German industrial output fell 1.6% on the month in September. This was stronger than the 0.8% decline that was forecast. As a result, the EURUSD fell to mid-July lows briefly at 1.1585 and extended strong losses against the British pound as well.
Oil prices were seen stabilizing following the recent rally. Crude oil futures closed 0.3% lower on the day. As a result, the Canadian dollar was also trading soft. The BoC Governor Poloz said yesterday that inflation was seen within the normal tolerance level for the central bank.
Looking ahead, the RBNZ’s monetary policy meeting is expected to be announced today. The RBNZ’s Overnight cash rate is widely expected to remain unchanged at 1.75%.
EURUSD intraday analysis
EURUSD (1.1596): The EURUSD fell to the previously established low near 1.1573 on Tuesday, but price action was seen rebounding off this level. We expect the near-term upside to continue but following which we could see another attempt to break past the lows of 1.1573. To the upside, the gains will be likely limited to the short-term resistance level formed at 1.1610 with a breakout above this level pushing EURUSD towards the main resistance area of 1.1710 – 1.1688. Failure to break past the 1.1573 low could potentially invalidate the bearish flag pattern.
USDJPY intraday analysis
USDJPY (113.76): The USDJPY recovered the losses from Monday, but price action remains muted near the 114.07 – 114.31 resistance level. Failure to break past this resistance level continues to increase the downside risks in price. Currently, the sideways range is expected to continue although, on the 4-hour chart, the break of the rising trendline could suggest some downside momentum. Support is seen at 113.00 which could be tested and would mark a correction to the downside. The inverse head and shoulders continuation pattern looks to be weakening in this scenario, and we expect that USDJPY could be posting further correction to the downside.
XAUUSD intraday analysis
XAUUSD (1277.89): Gold prices have remained range bound with price action seen trading sideways within the 1285 resistance level and 1262 support level. The newly plotted falling trend line is also seen being breached with price action briefly testing the trend line on a dip. This suggests some upside momentum. Resistance is seen at 1285 level, and a breakout above this level is essential for gold prices to post further gains. Above 1285 resistance, we can expect gold prices to eventually post a correction towards 1320 – 1324 resistance level.
