Intraday Technical Analysis 10 January

China's data release shows further easing of headline inflation

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The U.S. dollar eased as some Fed members commented that the central bank should be patient in hiking interest rates. Similar views echoed from the release of the FOMC meeting minutes on Wednesday. A weaker USD currency sent most of its peers to rally on the day.

Germany’s trade deficit widened in November due to a fall in imports and exports as well. Non-adjustThe non-adjusted plus rose 20.5 billion in November as data from the Federal Statistical Office showed on Wednesday.

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Inflation data from Switzerland indicated that consumer prices slowed to the lowest level in 10-months. Consumer price index increased 0.7% on the year, slowing from 0.9% in November and missed forecasts of a 0.8% increase.

From Canada, the housing starts report showed a slowdown in December but beat the market expectations. Housing starts for December scored at a seasonally adjusted annualized rate of 312,419 units, or down 4.8% from November.

The Bank of Canada held its monetary policy meeting and kept interest rates unchanged at 1.75%. The central bank reiterated that monetary policy path was dependent on incoming data and cited the weak oil prices. Growth forecasts for 2019 were lowered.

China’s inflation data released earlier today showed that headline inflation eased further, rising just 1.9% on an annualized basis in December. This was below estimates and data showed that consumer price index slowed from 2.2% in November. Producer price index data scored weaker, rising just 0.9% on the year compared to 2.7% in November.

The European trading session is relatively quiet for the most part today, save for the ECB’s monetary policy meeting minutes. The ECB minutes come from the December meeting where the ECB announced an end to its QE program.

The NY trading session will see the Fed Chair, Jerome Powell speaking alongside other Fed members including James Bullard and Evans.

EURUSD intraday analysis

EURUSD (1.1556): The EURUSD currency pair finally broke out to the upside from the resistance level of 1.1461. Price action attempts to test the next upper level at 1.1575 where resistance could establish. In the near term, there is scope for the euro to erase the gains and retest the breakout level at 1.1461 to establish support. This could potentially pave the way for further gains to the upside. Alternately, a breakout above 1.1575 could keep the bullish momentum going in the euro currency.

AUDUSD intraday analysis

AUDUSD (0.7182): The Australian dollar tested the resistance target level of 0.7191. With the currency maintaining strong gains near the resistance and showing no pullback to the downside, we expect that the bullish could exhaust at the current levels. Unless AUDUSD breaks past the 0.7191 resistance, the currency pair could pull back in the near term. The lower support at 0.7027 remains a key level of support to the downside.

XAUUSD intraday analysis

XAUUSD (1295.99): Gold prices posted a rebound after testing the 1280 handle once again. The retest of the support level has sent gold prices rising to test the previously established highs close to the 1295 region. It is likely that the precious metal will once again attempt to test the 1300 round number resistance. We expect the rally to show exhaustion around the current levels and could keep gold trading within the 1300 and 1280 range for the moment.

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