EUR awaits inflation data, USDJPY makes a doji at 112
The markets remain volatile with both the dollar stronger against the Euro and weaker against the Yen. However, USDJPY has made a doji pattern near the 112 support which will be key for further direction. Meanwhile, Eurozone inflation data is due to be released in the European session today. The British Pound has seen another sell-off yesterday and the GBP awaits the second estimate revision to the Q4 GDP numbers.
EURUSD Daily Analysis
EURUSD (1.10): EURUSD has closed in a doji pattern yesterday and a close to the upside above the highs of 1.1046 could signal a potential pullback to the recent declines. EURUSD will be at risk to the Eurozone CPI data due later today. However on the H1 chart, there is an inverse head and shoulders pattern which points to a minimum correction to 1.11. Following prices closing above 1.10 handle, we expect an eventual test to 1.113 - 1.1105 broken support to establish resistance for a decline back to 1.095 - 1.093. On the 4-hour chart, however, the Stochastics is posting a hidden bearish divergence and, therefore, the upside moves are likely to be limited.
USDJPY Daily Analysis
USDJPY (112.2): USDJPY tested the lows below 112 but managed to close in a doji candlestick pattern above 112 support. The daily Stochastics has printed a higher low indicating a possible move to the upside. Watch for a sustained move to the upside for a test of 116.21 resistance initially. From the 4-hour chart, there is scope for a dip back to 111.31 region. As long as prices remain supported above 111.31, a break above 113 could trigger a test to 117.
GBPUSD Daily Analysis
GBPUSD (1.392): GBPUSD continued with another day of strong declines breaking below 1.40 handle yesterday to test the lows near 1.39 before pulling back. Following the break below the lower trendline, a test to 1.40 could potentially see renewed declines start in GBPUSD. However, if prices manage to close above 1.40, there could be a possible correction. The Stochastics remain in oversold levels at the moment and a bearish signal below 20 could see further selling pressure evolve.
Gold Daily Analysis
XAUUSD (1236): Gold prices made an attempt to rally yesterday but prices were strongly rejected to the upside. Currently, Gold is attempting another go to test the previous highs following testing the support near 1230 - 1225. Prices are likely to remain range-bound below 1250 resistance and only a break above 1250 will shift the view for further upside in Gold.