Intraday Technical Analysis 7 November

RBNZ to keep rates unchanged

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The markets were seen trading subdued ahead of the NY trading session as polling for the mid-term elections was underway.

Reports indicate that the Democrats are back in control of the House while the Republicans have maintained control in the Senate. With the Democrats taking the majority in the house, President Trump’s policies are expected to be in check.

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From the Eurozone, the factory orders report from Germany showed a 0.3% increase which beat estimates of a 0.4% decline. The previous month’s data was also revised higher to show a 2.5% increase in factory orders.

The Eurozone’s final services PMI also rose to 53.7 beating estimates of 53.3 and up from September’s print of 53.3. Producer prices came in steady as it increased 0.5% on the month advancing from 0.4% previously.

New Zealand’s unemployment data for the third quarter surprised with better than expected results. The quarterly employment change rose 1.1% for the period ending September 2018. This beat estimates of a 0.5% increase.

The unemployment rate fell to 3.9% which also surpassed estimates. Earlier today, the quarterly inflation expectations data from New Zealand showed a reading of 2.0%, which was unchanged from the previous survey.

The European trading session today will see the release of the industrial production report from Germany. Economists forecast industrial production activity to decline 0.1% on the month. This is later followed by the retail sales for the Eurozone which is expected to climb 0.1% on the month.

The NY trading session will see the Ivey PMI data from Canada. The index is expected to rise to 50.9 from 50.4 previously. The overnight trading session will see the RBNZ holding its monetary policy meeting. No changes are expected as the interest rates are expected to remain unchanged at 1.75%.

EURUSD intraday analysis

EURUSD (1.1464): The EURUSD currency pair was seen bouncing off the 20-period EMA from the 4-hour chart. Price action is seen currently lifting off the resistance level of 1.1435. A close above this level could push the EURUSD back to testing the previously established resistance area of 1.1547 – 1.1525. However, price action could still maintain a sideways range within these levels. A breakout above 1.1547 – 1.1525 is needed in order for the common currency to establish an uptrend.

GBPUSD intraday analysis

GBPUSD (1.3132): The GBPUSD currency pair extended strong gains to the upside but price action is currently seen testing the previously held resistance level of 1.3086. A close above this level could potentially signal further upside gains. The next main resistance level is seen at 1.3235. However, if the currency pair fails to breakout from the resistance area, we could expect a correction to the downside. The 20-period EMA is likely to act as dynamic support, but a break down below this could accelerate the declines even further.

XAUUSD intraday analysis

XAUUSD (1229.76): Gold prices were seen posting declines, but price action is currently attempting to retrace the minor losses. Overall, gold prices have moved into a consolidatory mode. The resistance level at 1238 is likely to be tested in the near term. To the downside, the lower support at 1207 remains open for a retest. However, for this to occur, gold prices will need to post a strong decline falling below the current pivot low of 1225.75.

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