The U.S. dollar was the weakest currency yesterday as surprisingly, the Mexican peso rallied, rising 1.22% over the day against the greenback. This was followed by gains of 0.96% recorded in gold and among the major currencies; the British pound logged 0.84%. Lack of any clear economic data saw the dollar waver, which failed to capitalize despite the Treasury Secretary calling for a stronger U.S. dollar. The markets will be focusing on next week's Trump speech.
Looking ahead, the economic calendar is quiet during the European trading session. In the U.S. session, Canada's inflation figures will be coming out with the various measures of CPI. Canada's core CPI is expected to have declined 0.1%. Data from the U.S. will see the new home sales data, which is expected to increases 575k.
EUR/USD intra-day analysis
EUR/USD has so far managed to bounce of the support level at 1.0500 and having cleared 1.0555, the single currency will most likely target 1.0600 resistance level which also marks the previous support level that held prior to the break down following the bearish flag pattern. Only a close above 1.0600 will signal further continuation, but EUR/USD could remain range bound within 1.0600 and 1.0500 in the near term. On the daily chart, EUR/USD is showing strong signs of posting a recovery after hitting 1.0500 and could see further gains coming next week.
GBP/USD intra-dayanalysis
The British pound has managed to breakout from the consolidating triangle that price was stuck t for nearly three weeks. A breakout above 1.2566 marking the triangle pattern's high is required to sustain further gains to the upside as GBP/USD will target 1.2700 resistance level, the highs from February 1. The downside in GBP/USD is looking limited for the moment, although this could change in the event of price breaking below 1.2500, in which case GBP/USD could continue its sideways price action.
XAU/USD intra-day analysis
Gold prices broke above 1250 handle earlier today, but the daily chart continues to show the hidden bearish divergence, which could signal a near-term correction to the downside. The breakout to 1250 occurred after nearly a week of flat price action in gold. With prices breaking to 1250, further gains can be seen only if support is seen firming near 1240 - 1235 region. Failure to find support here could signal near-term weakness as 1200 support remains the downside target.