Intraday Technical Analysis 12 December

U.S. consumer prices to stay flat in November

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Economic data on the day saw the UK’s average earnings increased  by 3.3% in the three months ending October. The data beat estimates of a 3.0% increase. Previous data was revised higher to show a 3.1% reading. The UK’s unemployment rate was unchanged at 4.1%.

Germany’s ZEW economic sentiment was seen at -17.5, which was better than the expected -25.0 while the Eurozone’s ZEW economic sentiment was better at -21.0 compared to forecasts of -23.2.

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The U.S. producer price index data was seen rising 0.1% on the month compared to a low estimate. The pace of increase was slower than the 0.6% that was registered the month before. Core PPI was seen rising by 0.3% compared to 0.1% forecast.

Japan’s producer prices data which was released earlier in the day showed a 2.3% increase on the year. Economists polled expected a 2.4% increase on the PPI. The European session will see the industrial production numbers coming out. Industrial production is forecast to rise 0.2% on the month. This follows a 0.3% decline previously.

The NY trading session will see the monthly inflation data coming out. Headline CPI is forecast to remain flat for the period after a 0.3% increase previously. The core inflation rate is expected to rise at the same pace as the previous month at 0.2%.

EURUSD intraday analysis

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EURUSD (1.1325): The EURUSD currency is seen maintaining a bearish mode as price action briefly retested the falling trend line only to test the lower support. The consolidation near the lower support area of 1.1315 – 1.1300 signals a potential break down below this level. This could potentially extend the declines in the EURUSD to the lower support at 1.1220 region. The common currency continues to maintain a sideways range in the medium term. This is expected to continue into tomorrow’s ECB meeting.

GBPUSD intraday analysis

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GBPUSD (1.2508): The GBPUSD currency pair, having cleared the support area of 1.2683 is seen extending the declines further. The rebound off the initial local low formed at 1.2556 saw prices breaking past this low to reach the declines further. The next main support in GBPUSD is seen at 1.2356. We expect the cable to continue posting declines eventually testing the next support level. To the upside, any gains are likely to be capped near 1.2556 followed by the breached support level of 1.2683 which could now turn to resistance.

XAUUSD intraday analysis

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XAUUSD (1244.33): Gold prices retested the previous highs as price action rallied back to the 1248 region. However, the lower high in price sent gold lower to test the support at 1242.25. While gold is currently seen posting a rebound off this level, we expect the support to give way eventually. This could potentially extend the declines in gold amid a correction to the downside. The untested support at 1227 remains a key level of interest. However, failure to post the decline down to 1227 could result in gold prices attempting to retest the 1248 resistance once again.

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