11 May, 2016
Gold prices moved to $1270 early today as noted in yesterday's daily report. Price action in gold is likely to form a near-term top which could see a much-needed correction start. Meanwhile, GBPUSD forms an inside bar at support which could see a short term momentum led breakout to the upside.
EURUSD Daily Analysis
EURUSD (1.13): EURUSD posted declines for 6 consecutive days with price closing at 1.1371 yesterday. However, the range (open/close) of the candlesticks has declined to indicate a lack of momentum. This could potentially signal a near-term correction to the upside. Resistance is seen near 1.1470 while a close below yesterday's low at 1.1358 could signal further downside to 1.130. On the 4-hour chart, price action continues to consolidate near the support zone of 1.14 and 1.1380 and has formed a falling wedge pattern with a doji formed and the current 4-hour candlestick staying bullish. A bullish close here and preferably above the doji's high of 1.1381 could signal an upside breakout. While 1.1470 remains a key level to watch, EURUSD could rally to as high as 1.14975 to form a lower high.
USDJPY Daily Analysis
USDJPY (108.8): USDJPY is currently bearish but price briefly opened higher. A bearish close today could signal a move to 107.955 - 107.70 support. Watch for a lower high in USDJPY which could signal a move to 111.0 in the near term. On th 4-hour chart, the hidden divergence is currently seeing prices falling lower after a brief test near 109.35 - 109.73 resistance. The downside is likely to be limited near 108 - 107.360, which could confirm the bottom being in place and could start a rally to the resistance of 109.73 - 109.35 and eventually to 111.0.
GBPUSD Daily Analysis
GBPUSD (1.44): GBPUSD formed an inside bar yesterday with prices closing bullish but within the Monday's high and low range. The inside bar comes near the 1.4425 support, which marks the previous resistance level which snapped, sending GBPUSD towards April 28th higher close at 1.4673. An upside breakout here could see another rally, but it is very likely that GBPUSD will form a lower high indicative of a move to the downside unless the resistance zone of 1.4743 - 1.4635 is broken. On the 4-hour chart, a descending wedge pattern confirms this view with price moving higher above 1.4425. Initial resistance is seen at 1.4535, which could be the likely target. In the medium term, a higher low near 1.4535 - 1.4585 could see GBPUSD correct lower to 1.43 support.
Gold Daily Analysis
XAUUSD (1270): Gold prices formed a doji yesterday after Monday's bearish declines. Price action is showing signs of fading momentum which could see a near term top being confirmed. As long as gold doesn't break above $1300, we suspect that a correction to 1200 will be likely, provided gold can manage to break 1230 support. On the 4-hour chart, the falling median line is showing a correction to retest the broken support at 1273 - 1271. Establishing resistance here could confirm a move lower, but there is a risk of a break higher. In this case, gold could consolidate between 1291 - 1289 resistance and 1273 - 1271 support.
The common currency which had fallen sharply over the past few weeks and was eventually seen hovering above the support level of 1.1540 level was seen...
The U.S. dollar fell sharply across the board yesterday after the U.S. President Trump in an interview...
The U.S. dollar lost ground yesterday amid a slow trading day with lack of any clear catalysts for the markets. The speech by Janet Yellen did not offer anything new for the markets...
Mexico's inflation is likely to be boosted higher as the government announced that it would be hiking fuel prices by nearly one-fifth from January. The government said that fuel price ceilings will be capped between 14.2% - 20% above December's prices...
The Institute of Supply Management's Purchase Managers Index data is one of the most widely watched indicators. It is considered to be a leading indicator which gauges the strength in the U.S. manufacturing sector...
A fairly quiet Monday saw USDJPY retreating from its recent highs ahead of the big events this week. USDJPY has retraced its gains and now trades just above the support level of 104. The markets look to another slow day today with no major events on the tap, leaving the bulk of trading on the technical aspects...
A quiet economic calendar today ahead of the FOMC and BoJ meetings this week could keep prices fairly flat. The US dollar looks well supported moving into the FOMC meeting first which could keep the euro subdued...
The Bank of England's decision to hold monetary policy steady saw the GBP surge against the US dollar, clearing 1.32 with 1.36 now coming into focus...
Political developments in Japan and the UK saw the respective currencies react in the positive. While the GBP managed to close bullish on news that Theresa May is likely to be the new PM...