Intraday Technical Analysis 14 December

The Swiss National Bank held its monetary policy meeting on Thursday. The Central Bank kept its LIBOR rate unchanged at -0.75% as widely expected. The Central Bank, however, lowered its inflation outlook.

The ECB was the next central bank to hold its monetary policy meeting. The Central Bank announced that it was ending its QE program but gave a cautious outlook on the economy and inflation prospects. The Euro did not react much to the news.

The NY trading session saw the U.S. import prices falling by 1.6% which was more than the forecast of a decline of 1.0%.

The Tankan manufacturing index was at 19, unchanged from the previous quarter. Economists polled expected manufacturing to fall to 18. The non-manufacturing index rose to 24 from 22 during the last quarter, and the data beat the estimates of a decline to 21.

The European trading session will see the release of the flash manufacturing and services PMI for December. The Eurozone’s manufacturing PMI is forecast to rise slightly to 51.9 while services PMI is expected to remain steady at 53.4, unchanged from the previous month.

The NY trading session will see the retail sales numbers out of the U.S. Core retail sales are forecast to rise 0.2% in November. This follows a sharp 0.7% increase the month before. Headline retail sales are expected to grow 0.1% on the month, slower than the 0.8% increase seen the month before.

Later in the evening, the flash services and manufacturing PMI for the U.S. will be released by Markit.

EURUSD intraday analysis

EURUSD (1.1360): The EURUSD currency pair was slightly muted to the outcome of the ECB’s decision. Price action, therefore, remains trading flat and near the falling trend line which has managed to hold the gains. In the near term, the EURUSD is expected to retest the lower support at 1.1315 – 1.1300 once again. Failure to break out above the trend line would keep price action trading flat at the current levels. There is a risk that the common currency could break the support which could open the way for further declines to 1.1220.

GBPUSD intraday analysis

GBPUSD (1.2631): The GBPUSD currency pair attempted to retest the breached support area of 1.2683 briefly before turning flat. We expect the cable to retest this level more firmly. Failure to break out above 1.2683 could potentially keep price action subdued. However, we expect the declines to be limited for the moment as the bias to the upside builds up. To the downside, GBPUSD will need to break past the previously established lows near 1.2470 to post further declines.

XAUUSD intraday analysis

XAUUSD (1242.08): Gold prices have stayed flat near the 1242.25 level of support. This comes as the consolidation near the top has also formed a bullish flag pattern. A successful breakout to the upside could potentially trigger further strong gains. However, watch for price action near the 1242.25 level. A break down below this level could trigger declines in gold pushing price action to test the lower support at 1228.85 – 1228.00 level where support is most likely to be retested once again.