Intraday Technical Analysis 16 November

The U.S. Dollar was trading mixed on Thursday. The UK and the Brexit news dominated most of the headlines. A day after the EU and the UK announced a draft deal, key members of the cabinet from British PM Theresa May resigned.

The sterling plunged over 1.8% on the news amid a new bout of uncertainty. The resignations included some high profile names such as Dominic Raab, the UK’s Brexit secretary. Retail sales were also weaker, plunging 0.5% on the month and was worse than forecast.

Elsewhere, on the economic front, data showed that U.S. retail sales posted a strong rebound in October. Headline retail sales rose 0.8% on the month beating estimates of a 0.5% increase. However, most of the gains came due to increased sales at gasoline stores. Core retail sales jumped 0.7% on the month, but excluding automobile and gasoline sales, retail sales edged just 0.3% higher.

Oil prices were seen rebounding for a second day following the past five consecutive weekly declines.

The economic calendar today will kick off with the ECB President Mario Draghi’s speech. The ECB president is expected to speak at the European Banking conference in Frankfurt.

On the economic front, the Eurozone’s final inflation data for October will be coming out. Headline inflation is expected to rise 2.2% while core CPI is expected to increase 1.1% on the year ending October 2018.

Data from Canada will see the monthly manufacturing sales report. Manufacturing sales are forecast to rise 0.1% after falling 0.4% previously. The U.S. industrial production figures will be coming out later and expected to show a 0.2% increase.

EURUSD intraday analysis

EURUSD (1.1335): The EURUSD is seen gradually extending the gains. Price action is currently testing the falling trend line which is acting as resistance. A clean break above this trend line is required for the EURUSD to confirm the upside. The upside target at 1.1435 – 1.1463 will be tested in the near term. To the downside, failure to clear the trend line could keep the EURUSD poised to the downside.

GBPUSD intraday analysis

GBPUSD (1.2791): The pound sterling posted sharp declines and price action is seen falling back below the 1.2808 level. The sharp fall in the sterling was one of the worst since the Brexit outcome in 2016. The decline back to the level and the support area indicates that price action could remain muted in the near term. We expect the GBPUSD to maintain a sideways range within 1.2808 and 1.2683. However, this time, there is scope for the GBPUSD to fall further and test the 1.2683 level of support.

XAUUSD intraday analysis

XAUUSD (1215.17): Gold prices continue to maintain the gains, but price action is seen stalling near the previously established local highs. With the Stochastics oscillator showing a hidden bearish divergence, there is a risk of a correction to the downside. The breached resistance area of 1204.08 is likely to be tested in the near term for support if the divergence is validated. Alternately, price action could extend the gains to the upside, targeting 1223.50 level.