Daily Forex Market Preview, 23/08/2018
The U.S. dollar was trading flat on Wednesday. Economic data was most limited. The Fed released its monthly meeting minutes. The minutes showed that officials were concerned about the impact of trade tariffs on the U.S. economy. However, officials maintained that the U.S. economy was strong.
Ahead of the Fed minutes, the U.S. existing home sales report showed a decline for the fourth consecutive month. Official data showed that existing home sales fell 0.7% in July on a month over month basis. This brought the existing home sales to decline by 1.5% on the year.
Looking ahead, the economic calendar today is somewhat busy. The European trading session will see the release of the flash manufacturing and services PMI data for August. The median forecasts estimate a modest pick-up in activity from the previous quarter.
Later in the day, the ECB will be releasing its monetary policy meeting minutes.
The NY trading session will see the flash manufacturing and services PMI data from IHS Markit. This is followed by the U.S. consumer confidence report and the new home sales data.
EURUSD intraday analysis
EURUSD (1.1554): The EURUSD currency pair was seen retreating from Wednesday’s highs earlier this morning. The declines come following price action rallying above the 1.1540 level of resistance. Price action briefly tested the upper resistance at 1.1626 before easing back. As long as 1.1540 now holds out as support, we expect the currency pair to maintain its range within these levels. In the event that the currency pair breaks below 1.1540 support, then we anticipate further losses to push the currency pair lower. The next main support is seen at 1.1366.
USDJPY intraday analysis
USDJPY (110.81): The USDJPY currency pair posted gains for the second day and is seen currently extending these gains. This came following the reversal of the previously established lows around 109.85. The rally sent the U.S. dollar to retest the resistance level area around 111.13 – 110.85 level. As long as this resistance level holds, the USDJPY currency pair could maintain a sideways range. To the downside, a retest of the support at 109.45 is required.
XAUUSD intraday analysis
XAUUSD (1191.78): Gold prices closed with a doji candlestick pattern on Wednesday. The current bearish price action could potentially mark a retracement of the gains. The support at 1180.25 once again comes into focus. The reversal comes following a brief retest of the lower trend line of the falling price channel. A decline toward 1180.25 could mark a retest of the support level. This could potentially make way for gold prices to renew its correction to the upside. In the event of a close below 1180.25, gold prices could extend back to previous lows.