The U.S. dollar managed to maintain its dominance closing the week with gains. However, performance was rather mixed with the Kiwi dollar posting the strongest gains.
The UK's quarterly GDP report showed that the economy advanced 0.6% on the quarter. This brought the annualized GDP to 2.5% for the year, marking the fastest pace of expansion in two years. Most of the GDP growth came from consumer spending, while business investment remained weak.
The ONS which released the data cautioned that growth could slow in the coming quarters.
Elsewhere, the U.S. producer prices index surged by 0.6% beating estimates of a 0.2% increase. The increase in the prices at the factory gate suggests that inflationary pressures were strongly entrenched.
The economic calendar for the day looks quiet across all trading sessions. The European trading session will see Italy's industrial production numbers coming out.
Economists forecast that industrial production in Italy declined 0.5% on the month. This comes after industrial production rose 1.7% the month before.
The NY trading session will see the FOMC member, Daly, speaking. The speech comes after the Fed left interest rates unchanged last week.
EUR/USD intraday analysis
EUR/USD (1.1322):
The EUR/USD was seen closing bearish on Friday marking another week of losses. The common currency is seen trading near the previous lows of the 15th of August. This is an established support level. Therefore, a retest of this support level could potentially offer some upside bounce. If the EUR/USD fails to post a reversal at this level, we expect to see further losses pushing the common currency to new yearly lows. To the upside, the EUR/USD will need to break past the falling trend line and preferably breakout from the horizontal resistance level near 1.1435 - 1.1462.
GBP/USD intraday analysis
GBP/USD (1.2929):
The GBP/USD continued to post declines after the reversal from the resistance area of 1.3132 - 1.3086. The declines are expected to push the GBP/USD back towards the support at 1.2808. Establishing support here could potentially keep price action biased to the upside in the event that the support does not give in. Failure to hold the declines here could mark further decreases back to the previously formed lower support area around 1.2683.
XAU/USD intraday analysis
XAU/USD (1210.29):
Gold prices have extended the declines sharply on Friday as price action in the precious metal touched down to 1207.00. A rebound off this level could mean some near-term upside in price. The short-term price action could see gold prices rebounding off the 1207 region to retest the resistance area of 1223.50. A retest of this level could keep gold prices trading within a range. However, we expect that the upside bias will push gold prices higher to retest the previously held resistance area of 1238.