Daily Forex Market Preview, 04/09/2018
The British pound slumped on Monday after renewed concerns on Brexit. The Pound sterling fell as the UK’s manufacturing PMI fell to a 25-month low. Economic data from the U.S. was sparse with the U.S. and Canadian markets closed on account of the Labor Day holiday.
The RBA held its monetary policy meeting earlier today. Interest rates were left changed as widely expected. Later in the morning, the RBA Governor Lowe is expected to speak.
The European trading session is relatively quiet today. The UK will see the inflation report hearings scheduled while Switzerland will be releasing its monthly inflation figures.
The NY trading session will see the ISM manufacturing PMI report coming out. Median estimates forecast a decline in the index to 57.6 from 58.1 in the previous month. The construction spending data is expected to rise 0.5% on the month following a 1.1% decline previously.
EURUSD intraday analysis
EURUSD (1.1600): The EURUSD was slightly bullish on Monday but trading was subdued with the U.S. markets closed. Price action, however, was seen resuming the declines earlier on Tuesday. The euro currency briefly tested the resistance level at 1.1626 before reversing the gains below the 20-period moving average. Following the previous low posted at 1.1583, a close below this low could trigger further declines. The euro currency could be seen posting declines to the 1.1540 level of support in the near term.
GBPUSD intraday analysis
GBPUSD (1.2860): The GBPUSD currency pair gapped lower on Monday and briefly consolidated near the 1.2928 level of support. However, price action broke below this level and the minor trend line in the process as well. The declines are expected to push the cable down to the 1.2808 level of support. A rebound off this level is likely in the short term as price action could potentially reverse the losses. In the event that the GBPUSD closes below 1.2808 support, further losses could be expected.
XAUUSD intraday analysis
XAUUSD (1199.90): Gold prices continue to consolidate above 1197.50 support. Price action is, however, pointing to a potential correction to the downside if the support fails. The descending triangle pattern also validates this view. The downside target is seen around the 1180.25 level following the breakout from the rising price channel. A correction toward the 1180.25 region could spell a retest of the support level with gold prices likely to stay in a range within 1197.50 and 1180.25.