Daily Forex Market Preview, 12/09/2016
Fed member, Lael Brainard's speech will be the centerpiece for the markets today amid a quiet trading day with not much of economic releases on the agenda. The US dollar closed last week, recovering some of the losses from earlier in the week. A minor retracement is, however, expected in the US dollar, which could see a pullback across most of the dollar crosses. Gold prices are forming an inverse head and shoulders pattern, but the appearance of this pattern near the top end of the rally requires some caution.
EURUSD Daily Analysis
EURUSD (1.1244): EURUSD could remain range bound within 1.1300 - 1.1200, for the most part, this week, with the further direction being established on a breakout from either of those two levels. On the 4-hour chart following the bounce off the lower median line, we can expect EURUSD to retrace higher, perhaps to form a lower high below 1.1300 region. This could potentially keep EURUSD biased to the downside, for a more firm test towards 1.1200. Below 1.1200 support, the next main support is at 1.1155. Watch for the Stochastics to form a lower high indicating a bearish divergence to confirm this view.
USDJPY Daily Analysis
USDJPY (102.47): USDJPY bounced off 102.00 support last week with Thursday's bullish engulfing pattern. Although the upside could gain momentum on a breakout above 104.00, there is scope for USDJPY to decline back to 101.00 - 100.80 price level to establish support. The bias remains to the upside as long as the psychological 100.00 level is not breached.
GBPUSD Daily Analysis
GBPUSD (1.3266): GBPUSD closed below the inside bar that was formed last week hinting at further downside in store. On the 4-hour time frame, following the breakout from the lower median line, GBPUSD could be seen retracing its declines, but the correction is limited towards 1.3400. Watch for a lower high to be formed below 1.3400, ahead of a test towards the 1.3200 - 1.3170 support.
Gold Daily Analysis
XAUUSD (1328.76): Gold prices closed near 1330 support last week after three straight days of declines from the 1350 handle. Price action is showing signs of an inverse head and shoulders pattern which comes near the top end of the rally, indicating a continuation to the upside if the neckline resistance near 1350 - 1360 is breached. Alternately, a break below 1327.50 - 1330.00 support could signal further weakness with gold likely to fall towards 1314 - 1312 lower support.Publication source