Intraday Technical Analysis 08 February

The U.S. dollar was seen maintaining the bullish gains for the sixth consecutive day. The markets were seen trading mixed on the day.

The Bank of England held its monetary policy meeting yesterday. The central bank left interest rates unchanged as widely expected. Growth forecasts were cut, and the central bank said that inflation would remain above 2.0% at least until 2020.

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The BoE, however, noted that rate hikes were warranted in the event of a Brexit deal.

There were new developments on the Brexit narrative. The EU and the UK agreed to hold a fresh round of talks on Brexit. However, the EU made it clear that the Irish backstop arrangement was not up for negotiation.

British PM May is expected to bring a new Brexit plan up for vote next week.

The German industrial production figures showed a 0.4% decline marking a drop for the fourth consecutive month. The declines were, however, not as bad as a revised 1.3% drop the month before. Overall, the data showed that the industrial activity fell into recession in the fourth quarter of 2018.

Earlier today, Japan’s cash earnings report showed a 1.8% increase on the year, which beat estimates of a 1.7% increase. Household spending increased just 0.1% on the year falling well below the estimated 0.8% increase.

The European trading session will see the release of the German trade balance figures followed by the French industrial production data.

The NY trading session will see the release of Canada’s employment details. Unemployment rate is expected to tick higher to 5.7% while the monthly employment change is forecast to show a headline print of 6.5k.

EURUSD Intraday Analysis

EURUSD (1.1338): The euro currency continued to post declines, dragged lower by weaker economic data from Germany. After clearing the support at 1.1390, the euro currency extended strong declines. This puts the common currency on track to potentially test the lows of 1.1300. Establishing support at this level could lead to some bullish bias in the currency pair. To the upside, the recently breached support at 1.1390 could serve as resistance.

AUDUSD Intraday Analysis

AUDUSD (0.7064): The Australian dollar continued to post strong declines after price action fell below the support at 0.7191. The declines come after the minor rising trend line was broken. In the near term, we could expect a retracement to this trend line break-out level. To the downside, the support at 0.7022 remains a key level that could be tested in the near term.

XAUUSD Intraday Analysis

XAUUSD (1309.89): Gold prices were bullish yesterday as price tried to reverse some of the losses from the day before. However, the recent gains are likely to be shortlived as long as the current minor resistance at 1310.75 is not breached. To the downside, gold prices will need to push lower and break past the recent lows at 1304 in order to post further declines. The next main support is seen coming in at 1280 which was previously established. To the upside, if gold prices breakout above 1310.75, then we could expect to see gold prices advancing to test the next main resistance at 1316.