Daily Forex Market Preview, 24/10/2018
The U.S. dollar maintained its dominance on Tuesday, but price action was seen easing slightly following the gains. On the economic front, data was relatively quiet. The rising global tensions saw the markets having a lower risk appetite. Gold prices managed to rise along with investors seeking the safe haven of the yen.
The euro currency fell to an intraday low before recovering. Data showed that the Eurozone’s consumer confidence improved slightly to -2.7 from -2.9 previously. The European Commission was also seen rejecting Italy’s budget but the Italian Prime Minister, Giuseppe Conte remarked that there was no Plan B for its budget.
The British pound was seen trading volatile on the day after news reports suggested that the EU could offer the UK a customs union.
The economic data picks up steam with today’s European session marking the release of the flash manufacturing and services PMI data. The Eurozone’s flash manufacturing PMI is expected to ease slightly to 53.1 from 53.2 in September while services PMI is forecast to fall back to 54.5 from 54.7 previously.
The NY trading session will see the release of the Bank of Canada’s monetary policy statement and interest rate decision. The BoC is widely expected to hike rates by 25 basis points at today’s meeting. This would bring the interest rates to 1.75%.
Later in the day, the U.S. new home sales data will be coming out. Economists polled expect new home sales to rise slightly to 630k from 629k the month before. Fed members, Bostic and Mester, are due to speak later in the evening.
EURUSD intraday analysis
EURUSD (1.1472): The EURUSD currency pair turned flat on the day closing with a doji. Price action continues to consolidate around the support area of 1.1435 – 1.1460. The sideways range for the common currency could remain in place until tomorrow’s ECB meeting. The EURUSD will need to break out from the range that it has maintained for the most part this week. Given that the support level has held the declines firmly so far, price action could be seen attempting to break out to the upside.
GBPUSD intraday analysis
GBPUSD (1.2988): The GBPUSD currency pair was seen recovering off Monday’s lows yesterday. However, price action briefly touched the previously breached support area of 1.3054 – 1.3028 before easing back on the day. As long as the resistance level is not breached, the GBPUSD currency pair could maintain the downside bias. The currency pair remains at risk of a decline to 1.2808. But for the most part, the price action could be dictated by Brexit related news.
XAUUSD intraday analysis
XAUUSD (1232.45): Gold prices advanced strongly on the day to test the resistance level of 1238.00 before promptly easing back. The upside gains came as the precious metal managed to break past the consolidation area around 1225.35. Currently, following the modest pullback, gold prices could once again attempt to break out from this level. Failure to do so could put Gold prices back in the range of 1238 and 1225.35. There is a risk that gold prices could ease back to 1207 if it fails to find support at 1225.35.
