Intraday Technical Analysis 25 January
German Ifo on the tap following Draghi's dovish comments
The Euro currency came under pressure yesterday amid a mix of weak economic reports and the dovish ECB meeting. Ahead of the ECB meeting, the flash PMI’s covering the manufacturing and services sector showed that activity declined in both for the Eurozone.
The ECB held the main rates unchanged at its meeting but at the press conference, the ECB president, Mario Draghi said that the risks for the Eurozone’s growth had moved to the downside.
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Data from the U.S. released only Markit’s manufacturing and services PMI signaling that activity in both the sectors maintained the momentum.
Following a busy Thursday, the markets look relatively quiet today.
The German Ifo business climate data is due out during the European trading session. Economists polled expect the business climate to ease slightly to 100.7 from 101.0 previously.
The remainder of the session does not include many events scheduled during the U.S. trading session.
EURUSD Intraday Analysis
EURUSD (1.1323): The EURUSD currency pair broke past the 1.1334 level of support. The current reversal can be an attempt to retest this level. It is likely that 1.1334 will be acting as resistance in the near term. As long as the gains keep close to the resistance, we expect the EURUSD currency pair to eventually push lower. The lower support at 1.1273 is likely to retest in the near term. This would mark a firm retest of this level after prices briefly tested the level before bouncing off higher.
AUDUSD Intraday Analysis
AUDUSD (0.7097): The AUDUSD currency pair continues to extend the declines gradually. Price action is likely to touch down to the 0.7022 level of support in the near term. As long as the support holds, the currency pair could drift sideways within the range of 0.7191 and 0.7022. The bias remains to the upside, however, as AUDUSD could potentially retest the resistance level once again. If AUDUSD slips below 0.7022, we could expect a test of the lower support near 0.6936.
XAUUSD Intraday Analysis
XAUUSD (1282.15): Gold prices are seen testing the support level at 1280 and price action has been repeatedly bouncing off this level. In the near term, this sideways range could be maintained with the resistance at 1290 within reach. A breakout from this range is required for gold prices to establish direction. We look for a downside breakout below 1280 in order to confirm the corrective move toward the 1250 handle. To the upside, the resistance at 1290 is likely to keep gold prices in check.
