The U.S. dollar was seen easing back from the strong gains made earlier in the week. By Friday’s close, the U.S. dollar index was seen giving up the gains and closed near 95.99.
Economic data on Friday saw the release of the final inflation figures from the Eurozone. Data showed that consumer prices rose 2.1% on the headline inflation while core inflation rate also gained 1.1% as estimated.
Canada‘s monthly inflation report showed a 0.5% surge beating estimates of 0.1%. All other measures of inflation were also seen pushing higher.
The economic calendar today is light. The European trading session starts off with the monthly report from the German Bundesbank followed by a speech from the Bundesbank president, Jens Weidmann.
The NY session is quiet with only the FOMC member Bostic due to speak in the afternoon.
EURUSD intraday analysis
EURUSD (1.1431): The EURUSD currency pair was seen posting gains on Friday, extending the gains from Thursday. Price action posted a strong rebound off the 1.1339 – 1.1400 level. The breakout from the median line indicates a potential retracement to the upside. Following the breakout above 1.1366, the EURUSD is expected to post a modest decline to form a higher low. This could potentially mark the start of the correction to the upside. The next main resistance is seen at 1.1540 which could be tested in the near term.
USDJPY intraday analysis
USDJPY (110.56): The U.S. dollar was seen closing with a bearish candlestick on Friday. However, price action continues to maintain the sideways trend with the declines being only gradual. On the 4-hour chart, price action cleared below the support level of 111.13 – 110.85 level. We expect to see further consolidation taking place at this level. In the event that price fails to breakout above 111.13 – 110.85 region, we expect the declines to push USDJPY lower toward 109.45 level of support.
XAUUSD intraday analysis
XAUUSD (1186.11): Gold prices fell to fresh yearly lows last week. However, price action managed to pull back from the lows, turning slightly bullish by Friday’s close. Although it is still too premature to expect to see a retracement, watching for a higher low could validate this bias. In the near term, Gold prices could be seen retesting the recently breached support/resistance level at 1219.75 – 1211.50 region. Ahead of the gains, the 1200.00 level of resistance could put a lid on the gains. To the downside, a breakdown below the previous lower close could trigger further declines to 1150.00.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.