Intraday Technical Analysis 31 December

Subdued trading expected amid sparse economic data

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The U.S. dollar was seen trading a bit weaker on Friday with the markets showing a mixed sentiment overall. The Japanese yen maintained its dominance as the currency continued to appreciate against the U.S. dollar. The sterling was also seen trading stronger on the day.

Economic data was sparse. The day started off with Tokyo core CPI rising at a slower pace of 0.9% but matched expectations. Core CPI was slower compared to the 1.0% increase the month before.

In the Eurozone, Germany’s inflation estimates showed a slower pace of increase of just 0.1% on the month. This was below estimates of a 0.3% increase and marked the same pace of increase as the month before.

Spain’s inflation estimates were also weaker, rising 1.2% on the year, down from 1.7% previously. The NY trading session saw Chicago PMI beating estimates to rise to 65.4. However, the activity was weaker compared to 66.4 previously. Pending home sales were down 0.7% on the month following a 2.6% decline previously.

The economic data for the day is relatively quiet. Earlier today, Australia’s private sector credit showed an increase of 0.3%. China’s manufacturing PMI for December was also released. The data showed that manufacturing activity eased to 49.3 in December while the non-manufacturing PMI was seen rising to 53.8.

EURUSD intraday analysis


EURUSD (1.1426): The EURUSD currency pair has been trading flat with the resistance level of 1.1461 holding strong. Multiple retests to this level have failed to push prices higher. As a result, price action has consolidated into a potential ascending triangle pattern. If the resistance level breaks, the EURUSD could be on track to post gains toward the 1.1575 level which forms the minimum upside objective in price. Alternately, failure to break past the resistance level could lead to a downside breakout of the trend line. This could send the euro currency lower to retest the support at 1.1273 region.

AUDUSD intraday analysis


AUDUSD (0.7060): The Australian dollar was seen extending declines last week. Price action briefly hit the lows near 0.7022 before posting a modest rebound. However, failure to build upon the gains saw the Aussie closing bearish again by Friday’s close. With the Stochastics likely to indicate a bullish divergence, watch the AUDUSD for a potential double bottom pattern being formed near the lows. A bullish divergence with a retest of support near the 0.7000 level could potentially signal a short-term rebound in price action. The upside resistance at 0.7191 comes in at a key level of resistance.

XAUUSD intraday analysis


XAUUSD (1278.56): Gold prices maintained strong gains last week as price action settled near the 1280 handle as previously noted. With resistance being established here, gold prices are likely to remain consolidating around this level. Failure to breakout out above 1280 could keep gold prices biased to the downside. The downside target is seen at 1250 where support is yet to be established. This short-term correction could eventually pave way for gold prices to potentially breakout above 1280 handle. However, we expect that the precious metal could remain caught in the range for the near term.


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