Intraday Analysis 6th 2018

The U.S. Dollar was seen trading mixed by Friday’s close. The commodity risk currencies were the biggest gainers of the day including Gold, which advanced 0.52% by Friday’s close. The Euro and the Pound Sterling were seen trading at weaker levels.

The July Payrolls report showed that the U.S. economy added 157,000 jobs during the month. The headline missed estimates of 191k. But the unemployment rate fell to 3.9% from 4.0% previously. Wage growth was also seen advancing at a pace of 0.3% on the month as expected. This pushed the yearly average wages to 2.7%.

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Elsewhere, the UK’s services PMI was weaker than expected, falling to 53.5 in July. This was a weaker print compared to June’s headline of 55.1

Looking ahead, the economic calendar today is very light. The European trading session will be marked by the release of the German Factory Orders report which is expected to show a 0.3% decline. Later, the Eurozone Sentix Investor Confidence report will be coming out with the index forecast to rise to 12.8.

EURUSD Intra-day Analysis

EURUSD (1.1563): The Common Currency was seen extending its declines by Friday’s close. Price action is now seen trading close to the support level at 1.1540. The price action marks nearly a month and a half of sideways range between 1.1730 and 1.1540. In the near-term, the currency pair could be seen rebounding off the support level at 1.1540. If this scenario plays out, we expect to see the ranging price action being maintained. In the event that the currency pair breaks below 1.1540 further declines could be anticipated.

USDJPY Intra-day Analysis

USDJPY (111.32): The USDJPY currency pair was weaker on Friday extending its three-day decline. Price action stalled near the support level at 111.13 – 110.85 region. This could potentially stall the declines in the near-term. However, if there is a break out from this level, the currency pair could be seen posting strong declines. Price action is currently signaling a descending triangle pattern being formed with the baseline support established at the 111.13 – 110.85 handle.

XAUUSD Intra-day Analysis

XAUUSD (1216.03): Gold prices turned bullish on Friday, but the consolidation continues. The daily chart signals a potential bullish divergence on the Stochastics. This could perhaps signal an upside break out in the near-term. Gold will need to break out above 1219.75 level of resistance to confirm this upside. Alternately, on the 4-hour chart, we expect the consolidation to continue within the 1219.75 resistance level and previous lows at 1204.50.