Intraday Technical Analysis 2 November

U.S. unemployment rate to hold steady at 3.7%

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The U.S. Dollar posted strong declines on the first trading day of November. The declines pushed most of its peers, such as the Euro and the British pound including precious metals higher on the day.

Economic data saw the release of the UK’s manufacturing PMI which was seen at 51.1. This was below estimates of 53.0 and down from September’s reading of 53.6.

The Bank of England held its monetary policy meeting yesterday, and as widely expected, the central bank left interest rates unchanged. The BoE signaled that it was willing to wait for the Brexit negotiations to conclude.

The ISM manufacturing PMI fell unexpectedly to 57.7 missing forecasts of a decline to 59.0. However, data showed that new orders, production, and employment components were rising at a healthy pace.

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Construction spending, on the other hand, remained unchanged during September. Data showed that construction spending was at an annualized rate of $1.329 trillion. Private construction rose 0.3% during the month.

The economic data for the day started with Australia’s retail sales figures. Data showed that retail sales rose at a slower pace of 0.2%. This was followed by the quarterly producer prices index which surged 0.8% beating estimates.

The European trading session will see the release of the monthly final manufacturing PMI. The Eurozone’s final manufacturing PMI is expected to remain steady at 52.1. In the UK, the construction PMI is expected to ease to 52.0.

The NY trading session will see the release of Canada’s unemployment figures. Canadian unemployment rate is expected to hold steady at 5.9% as it hovers near a 40-year low. Meanwhile, the average jobs added during the month of October is expected to show 12.7k jobs.

In the U.S. the monthly payrolls figures are forecast to show that the U.S. economy added 193k jobs marking a modest increase from 134k jobs added the month before. The average hourly earnings are expected to rise at a slower pace of 0.2% on the month while the U.S. unemployment rate is expected to hold steady at 3.7%.

EURUSD intraday analysis

EURUSD (1.1411): The EURUSD currency pair turned bullish on the day as price action posted a strong reversal. The common currency rallied promptly after price action fell to the lower support area of 1.1315 – 1.1300 region. The rebound, however, keeps price action contained below the major resistance level of 1.1435. As long as price action is below this resistance, we expect to see a sideways range being maintained. On the 4-hour chart, the EURUSD is seen posting a hidden bearish divergence which could push the price action lower if the resistance level is not breached.

GBPUSD intraday analysis

GBPUSD (1.2999): The GBPUSD currency pair posted a sharp correction on the day as price action reversed losses just a few pips off the 1.2683 level of support. This reversal saw the currency pair breaking past the resistance level of 1.2808. Further gains could keep the GBPUSD biased to the upside as it approaches the resistance level of 1.3086. A retest of this level to establish resistance would mark a correction and potentially keep the GBPUSD trading flat in the near term.

XAUUSD intraday analysis

XAUUSD (1233.25): Gold prices were seen reversing the losses as price action rallied back to retest the breakout level from the falling wedge pattern. With price action trading just below the previous resistance areal of 1242.25 – 1238.00, we expect to see another test of this resistance level. Failure to break past this resistance level would keep gold prices subdued to the downside. The lower support at 1207.00 remains the likely target to the downside in this scenario.

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