Intraday analysis 31th July 2018

On the economic front, the preliminary inflation report for Germany showed that consumer prices rose 0.3% on the month. This was slightly below the median estimates of a 0.4% but inflation accelerated from 0.1% previously. On an annualized basis, German inflation rate was seen at 2.1%.

Spain’s preliminary inflation report also released on the day showed a 2.2% increase annually, slightly missing estimates of 2.3% increase.

Data from the U.S. showed that pending home sales snapped a two month decline to rise 0.9% on the month. However, on an annualized basis, pending home sales is still down 2.5%.

Earlier today, the Bank of Japan held its monetary policy meeting. The central bank kept monetary policy unchanged. It said that inflation would increase gradually to 2% but would take more time than expected.

Later in the day, the preliminary inflation report from France will be released followed by the inflation estimates for the Eurozone. Canada will be reporting on the monthly GDP figures and later in the evening, New Zealand will be releasing the quarterly employment figures.

EURUSD intra-day analysis

EURUSD H4 31-07

EURUSD (1.1708): The EURUSD currency pair posted strong gains on Monday. Price action managed to recover the losses from last Thursday’s ECB meeting. However, the common currency remains trading below the resistance level of 1.1730. This is expected to keep the currency pair’s gains in check. To the upside, a close above the short term resistance level at 1.1742 is required in order to confirm the upside toward 1.1824 – 1.1846. Alternately, in the event that the EURUSD fails to break past to this level, we can expect the ranging price action to continue.

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USDJPY intra-day analysis

USDJPY H4 31-07

USDJPY (111.31): The USDJPY currency pair has been consolidating near the support level of 111.13 – 110.85 level. The BoJ meeting saw the dollar posting strong gains but price action is currently seen struggling to break past the long term trend line. Failure to post gains above the trend line could trigger potential declines to the downside. The immediate target to the downside comes from the support level at 109.45 region. Establishing support here could potentially signal the end of the correction to the uptrend.

XAUUSD intra-day analysis

 XAUUSD H4 31-07

XAUUSD (1220.43): Gold prices were seen drifting back lower as price action was testing the support level at 1219.74. The retest back to this support level could signal a potential turn around in price. Gold prices continue to consolidate with the ascending triangle pattern likely taking shape. A breakout above the resistance level at 1235.25 is required to post further gains in the near term. Alternately, with the double top pattern being formed, a breakout below 1219.74 support could see gold prices extending the declines lower.

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About the Author
“John Benjamin Resident Analyst at Orbex. John has over 8 years of experience specializing in the currency markets, tracking the macroeconomic and geopolitical developments shaping the financial markets. John applies a mix of fundamental and technical analysis and has a special interest in inter-market analysis and global politics.”
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