Intraday Technical Analysis 25 February

NZ retail sales rises 1.7% on the quarter in Q4 2018

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The U.S. dollar attempted to hold the gains but closely slightly bullish. Economic data showed that inflation from the Eurozone confirmed at 1.4% on the year in January. The final core inflation rate met 1.1% as per the preliminary flash estimates.

On Friday, officials in Washington said that they were extending the trade negotiations with China. The news raised speculation that the two countries might be close to nearing a trade agreement. President Trump said that a deal with China was more likely than not.

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The U.S. set a 90-day deadline for trade talks with China. In case it fails it would automatically raise the tariffs on Chinese goods. The number we talk about are tariffs from 10% to 25% spanning across $200 bn worth of products. Over the weekend, President Trump announced that he was extending the deadline citing that the talks with China were progressing.

Mixed data from all over the world

The NY trading session showed Canada’s retail sales falling 0.1% on the month which was worse than the forecasts of a flat reading. Core retail sales fell 0.5%, matching estimates. The declines came on account of lower gas prices. On a year over year basis, Canada’s retail sales rose by 1.7% in 2018, compared to 2.7% in the year before.

Some Fed members will speak later during the day, including the ECB president Mario Draghi.

New Zealand’s retail sales report showed better than expected figures. Headline retail sales increased by 1.7% in the quarter, beating estimates of a 0.5% increase while the third quarter retail sales were revised higher to show a 0.3% increase.

Core retail sales gained 2.0%, beating estimates of 0.8% and up from a third quarter’s revised 0.7% print.

Bank of England’s Mark Carney will speak during the European trading session. The economic data for the day is quiet with the final wholesale inventories due during the U.S. tradings session. Final wholesale inventories should increase by 0.3% on the month marking the same pace of change as the month before.

The FOMC member, Richard Clarida is due to speak later in the evening.

EURUSD Intraday Analysis

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EURUSD (1.1339): The EURUSD currency pair closed with a doji candlestick pattern for the past three days. Price action remains firmly above the support at 1.1327 level, but with no new highs on the sight, we could expect the consolidation to continue in the near term. While the support level holds, the EURUSD remains bullish with the prospects of a test to 1.1435 level of resistance in the near term. However, in the unlikely event that the common currency slips below the support, price action could test the previously established lows of 1.1256.

USDJPY Intraday Analysis

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USDJPY (110.66): The USDJPY currency pair continues trade rather flat with price action trading sideways within 111.21 resistance and 109.74 level of support. Following the brief decline off the highs near 111.15 level, the USDJPY currency pair has been trading in a tighter range. The bias is balanced as bullish momentum could see the USDJPY rising higher and potentially reach the upside target of 111.21 level. This would mark the measured move of the ascending triangle pattern the was formed on the daily chart. To the downside, a decline to 109.74 would see a retest of the breached resistance level where support is yet to be established.

XAUUSD Intraday Analysis

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XAUUSD (1330.58): Gold prices attempted to rebound after the sharp declines from Thursday. Price action closed with some bullish gains on Friday, briefly rising to intraday highs of 1333.01 before easing back. On the 4-hour chart, the rebound off the support level saw prices posting a lower high. As long as this high stays clear, gold prices should maintain the downside momentum. The support at 1321.47 could test in the near term. A break down below this level could open the way for a bearish decline.

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