Intraday Technical Analysis 16 October

Investors turn to UK jobs report

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Daily Forex Market Preview, 16/10/2018

Data from the Eurozone was quiet during the day. The NY session saw the release of the retail sales report. Headline retail sales rose just 0.1% on the month. This was below the estimates of 0.7% and marked the same pace of increase in August.

Core retail sales, on the other hand, fell 0.1% and missed estimates of 0.4%. Core retail sales for August was also revised lower to 0.2%. The NY Fed’s Empire State manufacturing index increased to 21.1 and was higher than the estimates of 20.4.

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In the overnight trading session, New Zealand’s third-quarter inflation showed a 0.9% increase. This beat expectations of a 0.7% increase and consumer prices advanced from 0.4% in the second quarter. On a year over year basis, New Zealand’s inflation rate stands at 1.9%.

The day ahead will see China’s inflation figures will kick off the economic calendar today. Headline inflation is forecast to rise 2.5%, gaining momentum from the 2.3% registered in August. Producer prices are expected to rise at a slower pace of 3.7%.

The European trading session starts with the German import prices coming out. Economists forecast that import prices rose 0.1% on the month, partly reversing some of the declines posted from the month before.

In the UK, the labor market data is scheduled. The unemployment rate is expected to remain unchanged at 4.0%. Wage growth is tipped to rise modestly. The data comes ahead of tomorrow’s inflation report.

The ZEW institute will be releasing the economic sentiment indicators for Germany and the Eurozone.

The NY trading session will be marked with the release of the industrial production figures. Economists estimate a 0.2% increase which is slower than the month before. The industrial capacity utilization rate is expected to rise slightly to 78.2%.

EURUSD intraday analysis

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EURUSD (1.1574): The Euro currency posted gains on Monday as price action managed to rebound off the support. However, price action managed to post a lower high, resulting in a near double top pattern. The common currency could be seen testing the lower support at 1.1547. A break down below this support could signal further declines and in turn, validate the double top pattern. The minimum downside we expect to see is for the EURUSD to touch 1.1500 level. Alternately, to the upside, a close above 1.1604 could trigger further gains.

GBPUSD intraday analysis

gbpusd

GBPUSD (1.3144): The GBPUSD currency pair managed to recover off the opening lows on Monday. Price action rebound to fill the gap rather quickly before consolidating. We expect that the cable could move lower if the temporary support at 1.3132 fails to hold the current declines. The downside momentum could push the GBPUSD lower toward the familiar support of 1.3054 – 1.3028 region. As long as the support here holds, we maintain the upside bias. A close below the support could send the GBPUSD down to 1.2808

XAUUSD intraday analysis

xauusd

XAUUSD (1226.09): Gold prices rallied to fresh highs on Mondays before quickly giving up the gains. The retracement could, however, push the price of the precious metal lower. The initial support at 1212.05 – 1207.00 could be tested in the near term if gold prices pullback further. However, the upside bias remains for the moment following the breakout from the ascending triangle pattern. If gold prices fail to post a rebound, we anticipate a flat range to be maintained once again.

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