The US dollar posted a recovery across the board, with the euro and the British pound declining against the greenback. US economic data is due later today with retail sales and PPI numbers, which could be the main risk ahead of the FOMC meeting tomorrow. EUR/USD has continued to decline following the test to 1.12 last week, with 1.10 – 1.09 coming in as the next support level of interest.
EUR/USD Daily Analysis
EUR/USD (1.11): EUR/USD has declined for the second day following the brief test to 1.12, which saw prices being rejected strongly with a decline back to 1.10 being very likely. The Stochastics on the 4-hour chart is currently moving close to the oversold levels, pointing to a short-term correction. If prices continue to hover near the 11105 - 1.113 levels of resistance, another possible leg to the upside could see prices attempt to test the previous highs. Below 1.10 handle, EUR/USD could see a decline to as low as 1.095 - 1.093 support.
USD/JPY Daily Analysis
USD/JPY (113.3): USD/JPY is currently declining, but the overall price action remains flat above the 112 support. Resistance near 114.7 - 114.35 is likely to see a test while prices continue consolidating above the 112.5 support. A breakout above 114.7 could open up a test to 117, while to the downside, below 112.50 the lower support at 111.31 will be in focus.
GBP/USD Daily Analysis
GBP/USD (1.42): GBP/USD has been declining following the test to 1.443. Support at 1.4025 - 1.40 will be in focus in the near-term if the declines continue. GBP/USD has also broken the trend line, and a possible test back to the resistance levels near 1.435 - 1.43 could see resistance being established firmly at this level for a test down to 1.4025 - 1.40. Above 1.435 - 1.43 GBP/USD could see bullish momentum push the cable towards 1.46, where the next main resistance comes in.
Gold Daily Analysis
XAU/USD (1230): Gold prices have cleared the 1250 support, and the declines will continue pushing gold lower to the 1200 handle. On the 4-hour chart, prices have dipped to 1230 - 1225 support. If this support level holds, another test back to 1250 to establish resistance on this broken support level could confirm the declines towards 1200.