Intraday Technical Analysis 1 November

The U.S. Dollar maintained strong gains on the last trading day of October. The U.S. Dollar index was seen rising to a two year high briefly on Wednesday.

The Bank of Japan left interest rates and its QE program unchanged at its meeting yesterday. In the press conference, BoJ Governor Kuroda signaled that the central bank was ready to do more if the economic risks due to the trade disputes between the U.S. and China intensified.

The central bank also slightly lowered its forecasts for GDP and inflation for the fiscal year of 2018 and 2019.

Data from the Eurozone covered the German retail sales which rose just 0.1% on the month and missed estimates of a 0.5% increase. The previous month’s data was also revised lower to show a 0.3% decline.

Flash GDP estimates from Spain showed a 0.6% increase on the quarter matching estimates.

There was some good news on the inflation front as headline CPI was seen rising 2.2% on the year in October. This was in line with estimates and inflation slightly accelerated from 2.1% increase previously. Core CPI was however lagging, rising 1.1% as expected.

Canada’s GDP for August showed a 0.1% increase which beat estimates of a flat print. This marked a seventh consecutive month of GDP gains for Canada.

The European trading session will open to the manufacturing PMI figures from the UK. The Bank of England will be holding its monetary policy meeting later in the day. No changes are expected to the interest rates at today’s meeting.

The NY trading session will see the release of the ISM manufacturing PMI. Economists forecast that manufacturing activity as measured by ISM will ease to 59.0 in October from 59.8 the month before. Construction spending data is also due and is expected to show a 0.2% increase on the month.

EURUSD intraday analysis

EURUSD (1.1345): The EURUSD touched down to the support area of 1.1315 – 1.1300 and is seen currently posting a rebound. The gains are likely to be limited as the EURUSD is likely to see the rebound being capped near the resistance area of 1.1435. To the downside, the gains are also expected to be limited. A breakout above 1.1435 will trigger further gains, but for the moment, we expect the common currency to maintain a sideways range.

GBPUSD intraday analysis

GBPUSD (1.2849): The GBPUSD currency pair posted a strong rebound just a few pips shy of the lower support level at 1.2683. The rebound in price action is currently seen with a hidden bearish divergence on the Stochastics. However, with price action clearing the short term resistance level of 1.2808, we expect the declines to retest this level. A successful test of this level as support could potentially put GBPUSD on track to post a correction toward 1.3086 region.

XAUUSD intraday analysis

XAUUSD (1218.03): Gold prices broke down from the support level at 1225.35 and fell to a three week low. While the downside target remains at 1207.00, the current retracement could potentially push prices back to the 1225.35 level. A retest of resistance here could keep the precious metal biased to the downside. However, if gold prices break past 1225.35 then we expect to see a short-term uptrend being resumed.