Intraday Technical Analysis 28 November

The U.S. Dollar was seen rallying to previously established highs from just a few weeks ago. The strong rally in the USD sent most of its peers back to their lows. Economic data from the Eurozone was relatively quiet for the most part.

The NY trading session saw the National House Price index falling for the sixth consecutive month. Reports showed that housing prices rose 5.5% on an annualized basis in September. This was weaker than the 5.7% increase registered in August.

The weaker NHPI report echoes similar views as existing home sales; housing starts fell sharply in September. The declines were attributed to the higher costs for borrowing.

The Fed vice chair, Richard Clarida was speaking yesterday. He supported the Fed’s view for gradual rate hikes noting that it was appropriate for interest rates to rise as it moves closer to its optimal setting.

Looking ahead, the markets seem to a somewhat busy day today. In the overnight trading session, the RBNZ Governor Orr was speaking. The RBNZ head said that the Central Bank would ease lending restrictions from January next year while requiring higher capital requirements for banks.

The European session will see the release of the German Gfk consumer climate. Economists forecast the consumer climate to ease to 10.5 from 10.6. Meanwhile, in the NY trading session the, second revised GDP estimates will be coming out. There is an expectation for the third quarter GDP to be revised slightly higher to 3.6% from the initial estimates which showed a 3.5% increase.

The GDP report is later followed by the new home sales report which is expected to rise to 583k on a seasonally adjusted basis. The Richmond Fed manufacturing index is expected to edge higher to 16 from 15 previously.

Wrapping up the day, Fed Chair, Jerome Powell is expected to speak late in the evening.

EURUSD intraday analysis

EURUSD (1.1295): The EURUSD currency pair posted declines with price action seen falling back to the support area of 1.1315 – 1.1300. A brief drop below this level has seen the common currency clearing the support level. This could potentially expose the lows of 1.2200 that was tested in early November. The declines could stall at this level in the near term as the common currency could establish a new range. If the EURUSD manages to break past the current support area, we expect the sideways consolidation to continue.

GBPUSD intraday analysis

GBPUSD (1.2738): The British pound finally gave way near the support level of 1.2808 as prices slipped lower back into the major support area. We expect the declines could push the pound sterling down to the 1.2683 level of lower support. In the near term, however, price action could turn rather flat. Any reversal in price action could be seen retesting the 1.2808 level where resistance could be established.

XAUUSD intraday analysis

XAUUSD (1214.65): Gold prices extended the declines strongly after a few sessions of trading flat. The declines came as price broke past the support level at 1223.50 pushing prices lower. For the moment, the precious metal seems to be bouncing off the temporary support mentioned at 1213.50. A reversal off this level could drive gold prices back to testing the 1223.50 where resistance could be established. Alternately, a break down below 1213.50 could trigger further declines down to the 1204.08 level.