The Federal Reserve released the meeting minutes yesterday from its latest policy meeting. The dollar pared losses after the minutes did not show any further dovish message from the central bank. Economic data was sparse.
The British pound posted gains as the meeting between the EU and the UK happened in an attempt to renegotiate the Brexit terms.
The markets got off a busy start today with the release of Australia’s employment report. Data showed that unemployment kept steady at 5.0% while the monthly employment change saw a change of 39.1k jobs. Economists forecast that the unemployment rate would hold steady at 5.0% while the employment change for the month would see 15.2k jobs being added.
The European trading session will see the final inflation figures from Germany and France coming out. Germany’s CPI should decrease by 0.8% on the month, unchanged from the flash estimates, while French inflation might fall by 0.5%.
Flash manufacturing and services PMI for the Eurozone should see manufacturing activity ease to 50.3 while services activity should recover to 51.5 from 51.2 previously.
The ECB will release its meeting minutes later in the day.
The NY trading session will see the U.S. durable goods orders report which should rise 0.8% on the month. Core durable goods orders should increase by 0.2%.
The Philly Fed manufacturing index should ease to 15.6 from 17.0 in January. Later in the day, the existing home sales report will be coming out. Data might show 5.01M compared to 4.99M from the previous month.
The BoC governor Poloz will speak later in the evening.
EUR/USD Intraday Analysis
EUR/USD (1.1350): The EUR/USD currency pair reversed some of the gains. However, price action steadily held to the minor support created at 1.1335. The day’s price action resulted in prices retreating from the intraday highs. Still, with prices steady above the main support level of 1.1327 - 1.1309, we expect to see further gains in the EURUSD. If the intraday high of 1.1365 clears, then the common currency could be seen heading higher targeting 1.1435. To the downside, the support level remains essential as a breakdown below this level could signal declines and invalidate the bullish outlook.
USD/JPY Intraday Analysis
USD/JPY (110.79): The USD/JPY managed to close on a bullish note on Wednesday. Price action, however, trades flat within 111.21 and 109.74 levels of resistance and support. A breakout from this range will dictate further direction to the trend. For the moment, the ranging price action indicates a period of consolidation in prices.
XAU/USD Intraday Analysis
XAU/USD (1340.42): Gold prices were seen retracing the gains following the rally over the previous days. However, with prices easing back, we expect to see another attempt to push to the upside. Establishing firm resistance at 1347 level could signal a potential reversal to the gains. However, if gold prices breakout higher, we expect 1360 to be the next target to the upside. To the downside, the current lows formed at 1337 are important. A break down below this level could signal a move to the downside with the lower support at 1321.27 coming into the picture.