Intraday Analysis 30th May 2018

The euro currency continued to weaken amid the political uncertainty from Italy. The common currency fell to fresh yearly lows at 1.1510 on Tuesday. Economic data was sparse leaving investors to focus on Italy which soured the general market sentiment.

The U.S. consumer confidence index from the conference board showed a decline to 128.0 on the index with previous month’s data also revised down to 125.6. The U.S. dollar however maintained its stronghold across the board.

The economic calendar picks up pace today starting with the import price and retail sales data from Germany. Revised GDP numbers from France for the first quarter will be coming out which is expected to confirm a 0.3% increase. Germany will also be reporting on the preliminary inflation figures which are expected to show a rebound of 0.3% in consumer prices on a monthly basis.

The ADP/Moody’s private payroll numbers will be coming out ahead of this Friday’s official payroll figures. Economists forecast that the private sector added 186k jobs during the month of May. This marks a somewhat slower pace of job gains compared to 204k that was registered previously. The private payrolls data will be followed by the final revised GDP estimates from the U.S. which is expected to remain unchanged at 2.3%.

The Bank of Canada will be holding its monetary policy decision later. Interest rates are expected to remain unchanged at 1.25% at today’s meeting.

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EURUSD intra-day analysis

EURUSD (1.1534): The EURUSD currency pair continues to post losses with price action touching down to lows of 1.1533. The declines are likely to persist with the next downside target seen coming in at 1.1500. This would mark a fresh yearly low to this level. However, there is scope for the EURUSD to potentially post a bounce to the upside. With the resistance level at 1.1730 being tested any retracement in price action could be limited to the recent local highs of 1.1638.

USDJPY intra-day analysis

USDJPY (108.70): The falling market sentiment was reflected in the USDJPY currency pair which was seen clearing the lower support level of 108.90. The current retracement at this level is expected to see 108.90 level being retested for resistance. To the downside, we can expect to see continued decline. The next main support level comes in at 107.64 which marks an unfilled gap from April 20, 2018. The downside bias will shift unless USDJPY posts a rebound above 108.90 and clearing the next resistance at 109.43 – 109.57.

XAUUSD intra-day analysis

XAUUSD (1298.89): Gold prices have been hovering near the resistance level of 1304 – 1301 for nearly five consecutive days. Price action could possibly breakout above this level. Clearing the resistance level could signal an upside momentum in prices. If support is established on a retest, then we expect USDJPY to potentially post gains toward 1325 level. To the downside, a retest of 1282 support is still pending which could be tested more firmly.