By Orbex Blog
Daily Forex Market Preview, 11/05/2018
The British pound felt the heat yesterday as the BoE left interest rates unchanged. However, the losses were limited with the currency pair seen consolidating near the same level. Data from the U.S. showed that consumer prices rose less than expected. Headline CPI increased 0.2% while core CPI rose 0.1% on the month.
The U.S. dollar was seen weakening slightly on the day.
Looking ahead the economic data for the day will see the release of the employment numbers from Canada. The median estimates point to an increase of 17.8k jobs on the month which is slightly lower than the 32.3k jobs added previously. The Canadian unemployment rate is expected to remain steady at 5.8%.
The ECB president, Mario Draghi is expected to speak later in the afternoon. The ECB president will be speaking at a conference in Italy. The week wraps up with the University of Michigan’s consumer sentiment and inflation expectations data.
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EURUSD intra-day analysis
EURUSD (1.1916): The EURUSD was seen closing with strong gains yesterday as price action rallied back to the breached support level of 1.1920. However, the 4-hour Stochastics is showing a hidden bearish divergence which could signal that price action could soon resume the declines again. If the EURUSD posts a higher low, we could expect to see a bottom being formed. Price action will need to clear the support turned resistance level of 1.1960 – 1.1920 in order to post a correction. The long term upside resistance can be seen at 1.2200 in this case. To the downside, failure to clear the resistance could keep the EURUSD maintaining the range within the resistance level and the lower support at 1.1730.
GBPUSD intra-day analysis
GBPUSD (1.3529): The GBPUSD slipped below the 1.3530 level of support briefly but price action managed to close back at this level. The consolidation seen at this level continues and we expect to see a potential breakout in the near term. To the upside, GBPUSD could be seen targeting the main resistance level of 1.3902 while to the downside, a breakdown off the current level could push the GBPUSD lower to 1.3500 round number support.
XAUUSD intra-day analysis
XAUUSD (1319.66): Gold prices managed to breakout from the consolidation phase after multiple retests near the support level of 1311 – 1307 region. The upside momentum could see gold prices rising to test the next main resistance level at 1325 level. In the near term, gold prices could maintain the range within the current levels with further breakout likely to determine the next leg in the direction in prices.
