Daily Forex Market Preview, 22/10/2018
The U.S. dollar was seen easing back on Friday. Economic data on the day was relatively quiet. Canada's inflation fell more than expected declining 0.4% on the month. This was more than the forecasts of a 0.1% increase and marked a second consecutive month of declines.
On a year over year basis, Canada's inflation rose 2.2% which was the lowest in four months.
The retail sales report was also released which showed a 0.4% decline in core retail sales. Headline retail sales fell 0.1% missing estimates of a 0.3% increase.
The Canadian dollar fell sharply on the news.
The markets look to a quiet day of trading. Economic data is sparse across all the markets. In the Eurozone, the German Bundesbank will be releasing its monthly report. The NY trading session will see the Canadian wholesale sales report for the month.
EUR/USD intraday analysis
EUR/USD (1.1517): The EUR/USD currency pair extended the declines and promptly posted a rebound off the support area of 1.1435 - 1.1466. This double bottom pattern signals a possible move to the upside. Price action will need to clear the resistance area of 1.1547 - 1.1525 in order to confirm the upside. A breakout above this area could trigger further gains that could push the EUR/USD to test 1.1718 - 1.1745 level of resistance. This area also coincides with the minimum price objective of the double bottom pattern.
GBP/USD intraday analysis
GBP/USD (1.3074): The GBP/USD currency pair managed to turn flat at the support area of 1.3054 - 1.3028. If the currency pair maintains the rebound off this support level, we expect to see some upside in store. The resistance level near 1.3125 will, of course, need to be cleared in order for GBP/USD to resume the short-term uptrend. To the downside, if the support fails, then the currency pair could be seen extending the declines down to 1.2808.
XAU/USD intraday analysis
XAU/USD (1228.21): Gold prices continued to maintain a flat range following the strong rally last week. Price action is currently perched near 1225.35 level and price action has been rather choppy. This potentially increases the risk of a correction. If gold prices break down below the support level, we expect a move toward the 1207.00 region. Establishing support here could potentially keep the upside bias in place leaving gold prices to target the 1225 level once again.