Daily Forex Market Preview, 16/11/2017

The euro currency maintained the bullish momentum from the previous day as price action briefly rallied above 1.1800 handle marking a 4-week high. However, the common currency gave up the gains by the day’s close. Data from the US showed that consumer prices increased in October on both the headline and the core CPI. Based on the inflation data, the Fed is expected to confidently hike rates in December.

In the UK, the labor market data showed that the employment levels fell for the first time since the Brexit vote stoking fears of a slowdown in the labor markets. The unemployment rate was steady at 4.3% while wages managed to post a modest increase but still lags inflation.

Earlier today, the Australia jobs report showed that the unemployment rate fell to 5.4% while the monthly employment change showed 3.7k jobs being added, which was lower than forecast.

Looking ahead, the UK retail sales report will be coming out followed by the weekly unemployment claims from the US. The BoE Governor Carney will be speaking today including a number of Fed members.

EURUSD intraday analysis

EURUSD (1.1778): The EURUSD rallied to a 4-week high yesterday as price tested the resistance level area of 1.1841 – 1.1822. However, price closed on a bearish note near this resistance level indicating a short-term move to the downside. Support is seen near 1.1710 – 1.1688 which could be tested in the near term. The bias in EURUSD is now shifted to the upside, and we expect the currency pair to maintain its sideways range within these levels in the near term. Further gains can be anticipated only on a breakout above the resistance level. To the downside, the confluence of the trend line and the support level is expected to keep prices supported in the near term.

USDJPY intraday analysis

USDJPY (113.03): The USDJPY extended the declines yesterday as price action fell to the 113.00 support level. We expect the consolidation to continue near this support as USDJPY could potentially be seen posting further declines if there is a failure to rally above 113.00. The next main support is seen at 112.04 level which could be tested if the price level of 113.00 turns to resistance. The decline to the 112.04 followed by a move lower towards 111.74 could signal the correction to the downside. However, in order for USDJPY to post a new leg in the rally, price action will need to be supported firmly near 112.04 or near 111.74.

XAUUSD intraday analysis

XAUUSD (1278.13): Gold prices remain range-bound as price action continues to consolidate within the resistance level of 1285 and support near 1274.70. This sideways range could see a short-term breakout in either direction which could set the next leg in the short-term trend. Below 1274.70, gold prices are at risk of declining back to 1262.83 where the previous support level exists. While to the upside, a convincing close above 1285 is required in order for price to set the stage for a rally towards the 1320 region. We currently notice a potential ascending triangle pattern that is taking shape which puts the bias to the upside.