Daily Forex Market Preview, 13/09/2016
Fed member, Lael Brainard's speech was dovish yesterday briefly sending the US dollar weaker as she urged patience in hiking rates. It was one of the most dovish views from the FOMC members so far but highlights the fact that a majority of Fed members are in favor of a rate hike. Looking ahead, it is another slow day for the US dollar, but the focus is on ECB President, Draghi's speech which could weigh on the euro and UK's inflation data that could be the main risk for the GBP.
EURUSD Daily Analysis
EURUSD (1.1232): EURUSD closed in a doji with an inside bar yesterday with prices turning flat on the day. EURUSD could remain directionless as noted in yesterday's commentary but ECB President Draghi's speech today could help see the euro build some momentum. On the 4-hour chart, prices are seen bouncing off the lower median line, and we suspect further upside that could send EURUSD back to testing the resistance at 1.1280 - 1.1270 more firmly. Establishing resistance here could signal further downside, with 1.1200 acting as the initial support with declines likely to accelerate on a break below this support level. Alternately, a daily close above 1.1280 could signal further upside with 1.1341 coming in as the next main resistance level.
USDJPY Daily Analysis
USDJPY (101.76): USDJPY is seen consolidating near the 102.00 support level for the past few daily sessions, and the rather flat price action could continue into next week's BoJ meeting. On the 4-hour chart, prices are seen testing the 102.00 price level while support at 101.00 - 100.80 remains yet to be tested. Establishing support at 101.00 - 100.80 could confirm near-term strength in the USDJPY, however, a breakout above 102.00 could see USDJPY move into a sideways pattern within 103.00 resistance level.
GBPUSD Daily Analysis
GBPUSD (1.3335): GBPUSD formed an outside bar with a bullish close yesterday, but the price action could stay limited near 1.3400 resistance level. On the 4-hour chart, we see prices retracing the declines. Establishing resistance at 1.3400 could see a lower high being formed confirming the decline towards 1.3200 - 1.3170 support. UK's inflation data could be the main event risk for GBPUSD today. Further upside can be expected only on a close above 1.3400, in which case, GBPUSD could resume its uptrend.
Gold Daily Analysis
XAUUSD (1330.66): Gold prices formed a doji close yesterday coming after three straight days of declines. Prices are still struggling near the 1330 support level, but a close above this level could signal further upside in prices. The decline, seen yesterday was held near the 1331 - 1327.50 support level which marks the right shoulder. A continuation to the upside from this support could see gold prices retest 1350 - 1356 level and could potentially keep gold biased to the upside. A break below 1330 - 1327.50 support could, however, signal near-term weakness with 1314 - 1312 acting as the next support.