USD Edges Lower; Australia GDP Rises Less Than Expected
Summary
- EURUSD continued to post strong gains, marking a fourth consecutive day of gains.
- British pound was seen closing higher on the day as price was seen briefly rising to the 1.3902 level of resistance.
- Gold prices closed with strong gains on Tuesday rising above the 1328 resistance level.
Daily Forex Market Preview, 07/03/2018
The U.S. dollar was seen closing weaker as demand for risk appetite grew. News reports about North Korea being open to talks with the U.S. lifted the markets higher. On the economic front, the Eurozone retail sector PMI was seen rising to 52.8 compared to 50.8 previously. In the U.S. factory orders were unrevised, posting a 1.4% decline on the month. This comes after five consecutive months of solid gains in the sector.
Earlier today, Australian fourth quarter GDP showed a slower than expected pace of increase. The fourth quarter GDP expanded at a slower pace of just 0.4%, down from the third quarter's revised GDP of 0.7%. This brought the annual GDP in 2017 to 2.4%.
Looking ahead, the ADP private payrolls data will be coming out later today. Economists forecast that the economy added 199k jobs in the private sector. FOMC member Dudley will be speaking again today.
The Bank of Canada will be deciding on the interest rates today. No changes are expected as the BoC is likely to keep the interest rate unchanged at 1.25%.
EURUSD intra-day analysis
EURUSD (1.2417): The EURUSD continued to post strong gains, marking a four consecutive day of gains. Price action edged higher on Tuesday as the common currency breached past the resistance level at 1.2363 - 1.2330. The upside breakout above this resistance level could indicate further near term gains as the bearish flag pattern stands invalidated. Price action is close to testing the 1.2443 level of minor resistance to the upside and could settle in the range ahead of Thursday's ECB meeting.
GBPUSD intra-day analysis
GBPUSD (1.3895): The British pound was seen closing higher on the day as price was seen briefly rising to the 1.3902 level of resistance. An upside breakout above this level on the daily basis could potentially shift the bias to the upside. The bearish flag pattern noted previously stands invalidated as price action edged higher. The current retest of 1.3902 comes as the previous breakdown from the triangle pattern put the initial downside target towards 1.3611 - 1.3589 region.
XAUUSD intra-day analysis
XAUUSD (1334.85): Gold prices closed with strong gains on Tuesday rising above the 1328 resistance level. However, price action was seen easing back in early trading today. A close below the resistance level of 1328 could potentially shift the bias to the downside. In the near term, we expect gold prices to retest the level near 1328 where support could now be established. A rebound off this level could indicate further upside gains in the near term. The bias shifts to the downside only on a close below this level.
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