The UK’s labor market data showed that average earnings index rose 3.4% for the three months ending November. The unemployment rate fell to 4.0% amid forecasts of an unchanged print at 4.1%. The employment level rose 141,000 to a record high of 32.54 million in the three months ending December.
The GBP posted gains on the day, following the strong employment figures.
Existing home sales report, released by the National Association of Realtors showed a sharper than expected decline. Existing home sales fell 6.4% on an annual basis in December 2018. The decrease was more substantial than forecast and follows November’s revised figures of a 2.1% increase.
Compare to the same period from the previous year, existing home sales are down 10.3%.
Canada’s factory sales decreased by 1.4% in November compared to the month before. This was bigger than the forecasts of a 1.0% decline. However, on a year over year basis, factory sales were up 2.7%.
The markets look a busy Asian session. The of Japan held its monetary policy meeting earlier today. No changes occurred to the interest rates as they currently stand at -0.10%. The BoJ governor, Kuroda will be holding a press conference shortly.
The Bank of Japan lowered its inflation forecasts at today’s meeting as it noted that it expects the core consumer prices to rise to 0.9% in the year ending March 2020.
The European session is quiet with not much going on.
Data from Canada will see the release of the monthly retail sales report. Next is the housing price index data from the U.S. which should show a 0.2% increase. This marks a slower pace of expansion in home prices compared to a 0.3% increase previously.
The Eurozone’s consumer confidence report is due later in the evening. The report should show that consumer confidence remained flat at -6, unchanged from the previous period.
EURUSD intraday analysis
EURUSD (1.1365): The EURUSD currency pair was seen extending declines earlier on Tuesday with the intraday lows reversing just a few pips off the 1.1334 level of support. In the near term, we expect this support to be tested a bit more firmly, but the bias remains to the upside for the moment. With the ECB meeting due tomorrow, the common currency is expected to trade flat in the near term. The upside could be capped near the highs of 1.1397.
AUDUSD intraday analysis
AUDUSD (0.7137): The Australian dollar continues to post a modest decline to the downside although the pace of declines is not constant. Due to the failure to break out above 0.7191 resistance, the AUDUSD should push lower targeting 0.7022 where support is most likely to happen. In the event that price action posts a reversal, we expect the resistance level to hold the gains in the near term.
XAUUSD intraday analysis
XAUUSD (1283.81): Gold prices tested the 1280 handle which looks to act as support. As long as this support holds, gold could extend the gains back to the 1290.77 level which marked the downside breakout from the triangle pattern. This could potentially result with the 1280 support being tested once again. A break down below 1280 would test the 1250 support that is pending retest. If the support holds, gold prices could maintain the sideways range as it did over the past few weeks.
