Intraday Technical Analysis 14 January

The U.S. dollar closed on Friday with some modest gains. Economic data showed that Australian retail sales increased by 0.4%. This beat estimates of a 0.3% increase and advanced from 0.3% in the month before.

Data from the UK covered the monthly GDP report which showed that the UK’s economy grew 0.2% in the three months to November. This was slightly better than estimates, but the pace of growth remained weak.

Manufacturing production fell 0.3% on the month while construction output increased 0.6%. However, industrial production fell 0.3% on the month. The British pound ignored the economic data amid Brexit headlines making news once again ahead of the Parliamentary vote this week.

The NY trading session saw the U.S. inflation falling 0.1% in December. This was the first decline in nine months. Core inflation rate advanced 0.2% as expected.

Looking ahead, the economic calendar today is quiet. Earlier in the day, China’s trade balance figures showed that the trade surplus narrowed 17% to $352 billion. This came amid a fall in both imports and exports in December compared to the year before.

The European trading session is quiet with only the German Wholesale price index data due, followed by the industrial production figures. Over the weekend, news reports showed that EU officials were preparing for the UK to seek a delay to the Brexit deadline officially.

Officials said that they expect a delay of at least until July for Article 50 which is currently set to expire on March 29. The reports come as the UK will be putting the Brexit agreement to a vote in the Parliament tomorrow.

EURUSD intraday analysis

EURUSD (1.1475): The EURUSD currency pair eased back to test the breakout level of 1.1461 level. The reversal came after a failed rally saw price action reversing gains just short of the 1.1575 level of resistance which was the next upside target. A retest of the breakout level potentially indicates establishing support at this previously held resistance level. As long as this new support holds, the EURUSD currency pair is seen to be biased to the upside. However, there is a modest risk that price action to dip back below this level.

AUDUSD intraday analysis

AUDUSD (0.7184): The AUDUSD currency pair managed to close the week with gains above 0.7191 level of resistance. The strong gains have come with little pullback and show the bullish momentum in the currency pair. As long as the price level of 0.7191 holds, the AUDUSD could remain biased to the upside. But given that there hasn’t been any pullback, there is a risk that the Australian dollar could be slipping back below 0.7191 price level. The minor rising trend line will be key. A break below this trend line could push the AUDUSD lower and risk a correction to 0.7022.

XAUUSD intraday analysis

XAUUSD (1290.40): Gold prices eased back after another attempt to reverse the losses. After a lower high formation, the precious metal eased back. A retest of the 1280 level is not in place once again. But as long as the support holds, gold prices are likely to remain flat at the top end of the rally. A clean breach of the support at 1280 is required for gold prices to extend the declines lower. The support at 1250 will be key in the short term in order to establish the upside bias in the price of gold.

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