The US dollar was seen trading flat by Friday's close despite the initial losses after data showed that consumer prices rose less than expected. Data from the Labor department showed on Friday that headline consumer prices rose 0.5% on the month in September, accelerating from 0.4% previously. But the data was below forecasts of 0.6%. Core consumer prices also rose 0.2% maintaining the same pace of gains as the previous month. Retail sales, on the other hand, rose 1.6% in September slightly below the forecasts of 1.7%.
The euro was seen trading weaker after comments from Draghi showed that substantial degree of monetary policy was still needed. His comments come ahead of next Thursday's ECB meeting where the central bank is expected to announce another round of tapering.
Earlier today, China's CPI data was seen rising 1.6% on the month as expected while producer prices rose 6.9%, beating expectations of a 6.3% increase. Later in the day, the US Empire state manufacturing index is to be released followed by the quarterly inflation data from New Zealand.
EUR/USD Intraday Analysis
EUR/USD (1.1803):The EUR/USD was seen giving up the gains by Friday's close as price closed with a doji pattern on the daily session. The euro was seen opening weaker this morning as price gapped to the downside below the support level of 1.1822. Further declines could be expected which will see the EUR/USD retest the breakout level from the falling wedge pattern that initially sent prices higher. A retest to this breakout level, close to the support established at 1.1720 could see another minor bounce to the upside. A break down below 1.1688 is essential for EUR/USD to establish the downside bias. However, for the near term, we expect the range between 1.1822 and 1.1720 to be maintained into next week's ECB meeting.
USD/JPY Intraday Analysis
USD/JPY (111.94):The USD/JPY was seen falling to the support level at 111.74 on Friday. However, price action posted a strong bullish candle on the 4-hour session off this support. This suggests that the range between 113.00 and 111.74 could be maintained in the near term. USD/JPY has been trading within this range for the past three weeks, and further gains or losses are expected only on a breakout from this range. To the upside, USD/JPY will need to rally breaching the resistance level of 113.00 region. This could shift the bias to the upside for a test towards 115.00 region. To the downside, below 111.74 the next main support is seen at 111.00 region.
XAU/USD Intraday Analysis
XAU/USD (1302.55):Gold prices rallied to the psychological level of $1300.00 an ounce on Friday. Price action remains trading within the steep rising wedge pattern which could suggest a downside break down in prices. However, with price trading above the minor support level of 1296, we could expect the near-term declines to stall at this level. A breakdown below 1296 is needed in order for gold prices to post a correction towards the 1275 - 1274 level of support.