Intraday Technical Analysis 26 October

The U.S. Dollar posted strong gains on Thursday as the dollar index rallied close to the year’s high. Economic data on the day showed that Spain’s unemployment rate fell to 14.6% beating expectations of 14.9%. However, Germany’s Ifo business climate fell to 102.8 which was below estimates of 103.1.

The ECB held its monetary policy meeting, and as widely expected, no changes were made to the interest rates. The ECB announced its plans to end its QE purchased by the end of the year despite some weakness in the Eurozone’s economy.

Data from the U.S. showed that core durable goods orders rose just 0.1%. This was below estimates of a 0.5% increase. However, headline durable goods orders rose 0.8% which beat estimates that forecast a 1.3% decline.

Looking ahead, the markets will be watching the data from the U.S. The third quarter advanced GDP report is due today. Economists polled forecast Q3 GDP in the U.S. to rise 3.3%. This marks a slower pace of growth compared to the 4.2% increase in the previous quarter.

The ECB president Mario Draghi is expected to deliver a speech later in the day.

EURUSD intraday analysis

EURUSD (1.1364): The EURUSD continued to extend declines on Thursday as price action was seen closing below 1.1400 level. The break down below this level could potentially signify further declines in price action. Any short-term rebound is likely to be met with the resistance level formed at 1.1435 region. A close above this region is required for the EURUSD to post any meaningful correction.

GBPUSD intraday analysis

GBPUSD (1.2816): The GBPUSD currency pair reached its downside target of 1.2806 which marks a correction and a retest of this support level. We expect to see some consolidation taking place at this level following which price action could attempt to post a rebound. The recovery to the upside could see the GBPUSD attempting to retest the breached support level area of 1.3054 – 1.3028. However, if the cable breaks down below 1.2806, we expect the bearish trend to continue.

XAUUSD intraday analysis

XAUUSD (1232.30): Gold prices posted modest declines, but price action quickly recovered towards the closing session on Thursday. The consolidation is currently forming into a rising wedge pattern. Gold prices will need to break out from the lower rising trend line in order to validate this pattern. The lower support at 1225.35 will be the immediate target to the downside. A break down below this level could trigger further declines to the 1207.00 region.