Intraday Technical Analysis 05 February

Data from the Eurozone saw the release of the Sentix investor confidence. Data showed that investor confidence weakened for the sixth consecutive month. The investor confidence for the Euro area fell to -3.7 from -1.5 in January which was the lowest reading since November 2014.

The current conditions index fell to 10.8 from 18 which was the lowest since December 2016. The current conditions index declined for the sixth consecutive month.

Meanwhile, UK’s construction sector slowed. Growth eased in January to reach a ten-month low. Data from IHS Markit showed that the construction PMI fell to 50.6 from 52.8 in December. The U.S. factory orders fell 0.6% on the month coming out worse than expected.

Earlier today, the Reserve Bank of Australia held its monetary policy meeting. As widely expected, the Central Bank left the main interest rates unchanged at 1.75%. Ahead of the RBA meeting, Australia’s retail sales report showed a 0.4% decline on the month, which was worse than expected.

The European trading session today will see the release of Markit’s services PMI for France, Germany, Italy and the Eurozone. The Eurozone service PMI should remain steady at 50.8.

The UK’s services PMI report will also be coming out. Economists forecast that the services sector eased modestly to 51.1 from 51.2 in December.

The NY trading session will see the release of ISM’s non-manufacturing PMI. Activity in the non-manufacturing sector should ease to 57.0 from 57.6 previously.

EURUSD Intraday Analysis

EURUSD (1.1439): The EURUSD currency pair closed bearish with price action seen drifting modestly lower. The support at 1.1400 is likely to be tested to the downside in case of any bullish momentum. Price action remains caught with the resistance from the falling trend line. A breakout from this level is the way forward for further gains. The next main resistance should be at 1.1575.

AUDUSD Intraday Analysis

AUDUSD (0.7204): The Australian Dollar dropped to the lower end of the range at 0.7191. The declines came after AUDUSD failed to post a breakout above 0.7292 level of resistance. The drops are likely to stall at the current level leaving AUDUSD to trade sideways. However, in the event of a decline below 0.7191, we could expect the currency pair to test the lower support at 0.7022

XAUUSD Intraday Analysis

XAUUSD (1313.32): Gold prices extended declines for the second consecutive day, but price action managed to recover some of the losses towards Monday’s close. The modest retracement is likely to push gold prices briefly higher toward the 1318 level before the bearish momentum is likely to resume. If gold prices rally above the 1319 level, we could expect to see a move back to the previous highs near 1321.