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Busy Day For The USD: FOMC, ADP Payrolls, And ISM Manufacturing

Daily Forex Market Preview, 1/11/2017

The markets were seen trading subdued yesterday. The Bank of Japan held its monetary policy steady, and in the Eurozone, flash inflation estimates showed that consumer prices rose 1.4% on the headline and 0.9% on the core. This was weaker than the estimates. However, flash GDP showed a 0.6% increase for the third quarter, while the second quarter GDP was revised higher to 0.7%. In Canada, the monthly GDP data posted a 0.1% decline which missed estimates of a 0.1% increase.

Looking ahead, the economic data today will see the release of the manufacturing PMI for the UK. Economists are forecasting a modest print of 55.8, slightly down from 55.9 in September. The NY trading session will see the ADP private payrolls data coming out. Estimates point to a 202k print for September. Revision for the previous month is expected as well. This is followed by the ISM manufacturing PMI which is expected to show a decline in the index to 59.5 in October, following 60.8 the month before.

The economic calendar concludes later in the day with the FOMC statement and BoC Governor Poloz's speech.

EURUSD intraday analysis

EURUSD (1.1630): The EURUSD established a short range yesterday as price action closed with a doji type pattern on the daily session. A bearish decline today could signal a continuation to the downside. This could be expected amid a host of economic releases from the U.S. On the 4-hour chart, price action has formed a potential bearish flag pattern. This could be validated on a close below 1.1573 and will see the euro extending the declines towards 1.1411. However, failure to close below 1.1573 could keep the bias neutral with the potential for price action to retrace the gains back to 1.1688.

USDJPY intraday analysis

USDJPY (113.86): The USDJPY recovered the losses from Monday as price action turned bullish on yesterday's close. Still, the consolidation above 113.00 which marks a short term support level could see the currency pair trading sideways. The bounce off this support level will see USDJPY likely to test the previous resistance level near 114.00. The short-term range looks to be formed for the moment, and a breakout from either of these levels is required to post further gains or losses.

XAUUSD intraday analysis

XAUUSD (1269.94): Gold prices were seen trading weaker yesterday as price action fell below the 1272 level of support. This could potentially see a retest back to the lower support level of 1262 where gold prices could be seen testing this region for the third time. The bias remains flat although there is a potential for gold prices to break down below 1262. The possibility of a descending triangle pattern cannot be ruled out. This puts gold prices to the downside, targeting 1238 - 1240 levels in the near term.