Daily Forex Market Preview, 29/08/2018
Consumer confidence in the United States hit a new high. The index rose from 127.9 in July to 133.4 marking the highest level since October 2000 beating the median forecasts as well.
The consumer confidence report comes ahead of today’s second revised GDP estimates for the second quarter. Economists forecast that the U.S. GDP advanced 4.0% in the three months ending June, slightly slower from 4.1% reported in the preliminary GDP release.
The Richmond Fed manufacturing index also showed a strong level of activity as the index rose to 24.
The U.S. Senate also voted to confirm Richard Clarida as the vice-chairman of the Federal Reserve.
The British pound was seen extending losses as news broke that the British Prime Minister Theresa May did not have any intentions to resign after Brexit. Furthermore, both EU and the UK announced that they were dropping the October deadline to reach for a Brexit deal.
The European session today will see the release of the preliminary GDP report from France for the second quarter. Economists forecast no change to the GDP growth which was previously reported at 0.2%.
EURUSD intraday analysis
EURUSD (1.1692): The euro rose to a fresh one month high on Tuesday at 1.1733 before partly giving up the gains. Price action briefly tested the resistance level at 1.1730 on the daily session. The rally to the monthly high coincided with the doji pattern on the 4-hour chart with a bearish follow through. A decline could potentially see the euro easing back to 1.1626 where support is likely to be tested in the near term. While price action could maintain its sideways range within the mentioned levels, a break down below 1.1626 could trigger further declines down to 1.1540 level of support. To the upside, a breakout above 1.1730 could push the euro to further gains.
GBPUSD intraday analysis
GBPUSD (1.2866): The British pound attempted to test the previous highs but failed to do so. The currency pair turned bearish as it attempts to break out from the falling price channel. As long as price action remains supported above 1.2808, the GBPUSD is expected to maintain the bullish outlook. A close above the previous high could suggest further gains in the GBPUSD targeting 1.3205. To the downside, below 1.2808 support, GBPUSD could extend the declines to 1.2740.
XAUUSD intraday analysis
XAUUSD (1204.17): Gold prices fell sharply on Tuesday as price action closed with a bearish engulfing candlestick. The declines are likely to extend price toward the 1197.50 support in the near term. The reversal comes amid the hidden bearish divergence. As long as price action is supported above 1197.50 gold prices could maintain the bullish outlook. However, a close below this support could send the precious metal’s price lower toward 1180.25.