Daily Forex Market Preview – 07/08/2018
The market opened to a quiet trading day on Monday. The U.S. Dollar was trading stronger, while the U.S. Dollar Index posted intraday gains to fresh highs. The gains came despite the market’s opening, with the headline about China threatening to impose fresh trade tariffs against the U.S.
Australia’s inflation gauge report showed that inflation expectations increased 0.1% on the month. The factory orders report from Germany showed a 4.0% decline on the month. This briefly pulled the Euro currency lower on the day.
The Reserve Bank of Australia held its monetary policy meeting earlier today. As widely expected, the central bank left its cash rate unchanged at 1.50%. The statement was broadly unchanged from the previous monetary policy meeting.
Later in the day, the German Industrial Production and Trade Balance figures will be coming out. The U.S. trading session will see the release of Canada’s Ivey PMI. The index is forecast to rise modestly from 63.1 in June to 64.2 in July.
EURUSD Intraday Analysis
EURUSD (1.1558): The EURUSD currency pair touched the main support level of 1.1540 on Monday, only to rebound slightly. Price action remains subdued at this level with consolidation likely to take place near the support level. The daily Stochastics are currently oversold but further downside momentum could extend on a close below 1.1540. On the 4-hour chart, the strong decline off the 1.1740 level could see a modest correction.
USDJPY Intraday Analysis
USDJPY (111.33): The USDJPY currency pair was seen consolidating above the support region of 111.13 – 110.85. The rebound off this support was limited in range, with price action posting a lower high. However, a break down from the support handle could signal a potential correction to the downside. The next main support is seen at 107.78. To the upside, the resistance 112.28 remains a key level of interest. A breakout above this level is required for the USDJPY to post further gains.
XAUUSD Intraday Analysis
XAUUSD (1210.02): Gold prices remain firm near lows below the 1211.50 region. Price action formed an inside bar on Monday’s session, which could signal a potential breakout. With the downside momentum strongly established, we expect to see a possible breakdown which could push Gold prices even lower. To the upside, the minor double bottom pattern on the 4-hour chart could signal an imminent upside breakout. The resistance at 1219.75 will need to be cleared to confirm the correction toward 1242.25.