The US Dollar was seen trading flat on Thursday. This came despite data showing that consumer prices in the U.S. surged to a six year high. Headline inflation rate was seen rising 2.9% on an annual basis. Core inflation that excludes the volatile food and energy prices were seen rising at a slower pace of 2.3%.
The ECB released its monetary policy meeting minutes. The minutes showed that officials left the question of QE extension as still an option. Officials were also concerned about the risks in the financial markets and the rising threats from protectionist policies.
The economic calendar for the day is slow as the markets head into the week. Data today includes the release of the Swiss PPI figures. The BoE's MPC member, Cunliffe is expected to speak over the day.
The NY trading session will see the release of the U.S. import prices. Economists polled forecast that import prices increased 0.1% on the month. Later in the afternoon, the University of Michigan will be releasing the consumer sentiment and the inflation expectations report.
EUR/USD intra-day analysis
EUR/USD (1.1665): The EUR/USD currency pair was seen closing with a doji pattern on Thursday. Following this, price action is likely to head either way. To the upside, a bullish close above 1.1730 could trigger a rebound in prices while to the downside; a bearish close could push the EUR/USD down to 1.1540 level of support. On the 4-hour chart, the hidden bearish divergence signals a potential move to the upside. For this, price action will need to close convincingly above the 1.1686 price level to confirm the move toward 1.1846 - 1.1824 level of resistance.
USD/JPY intra-day analysis
USD/JPY (112.62): The USD/JPY currency pair was seen maintaining the strong gains for the most part of the week. However, the momentum looks to have flattened out and we could expect to see a short term correction. To the downside, the recently breached resistance at 112.28 is expected to turn to support. Failure to hold this level could trigger further declines in USD/JPY back toward the 111.13 region.
XAU/USD intra-day analysis
XAU/USD (1246.41): Gold prices attempted to post some gains but price action was seen stalling near the 1247 handle. We expect to see some consolidation taking place at this level. There is however a strong risk that gold price could slip back below the 1242 region. To the upside, price action will need to breakout from the larger descending triangle pattern. This could push gold prices toward the 1258 region. For the momentum, the double bottom and the bullish divergence on the daily chart indicate a possible move to the upside.