The U.S. dollar was seen trading on the back foot amid a rather busy day. The economic data from the U.S. showed that the economy advanced by 4.2% during the second quarter. The second revised estimates were higher than the initial estimates which showed a 4.1% increase.
However, other economic data was mixed. The pending home sales index fell 0.7% in July according to data released by the National Association of Realtors (NAR).
In the European trading session, the Pound sterling managed to get a boost after the EU’s Chief negotiator, Michel Barnier said that he was prepared to offer the U.K a trade deal that was never before offered a third country.
The remarks stoked optimism just a few days after it was evident that the Brexit talks would miss the October deadline.
The economic calendar today will see the release of the flash inflation estimates from Germany and Spain. Germany‘s inflation is expected to ease, while consumer prices in Spain are expected to remain steady.
The NY trading session will kick off with the release of Canada’s monthly GDP report. Economists forecast that the GDP advanced 0.1% following a strong 0.5% increase the month before.
The U.S. Core PCE price index will no doubt generate headlines as the Fed’s preferred inflation gauge. Core PCE is expected to rise 0.2% on the month, advancing from 0.1% the month before. Personal income and spending data are also on the cards.
EURUSD intraday analysis
EURUSD (1.1697): The Euro currency continued to post gains with price action attempting to rebound off the 20-period moving average on the 4-hour session. However, the failure to post higher gains indicates a potential correction in the making. This is also validated by the bearish divergence that is currently formed. The first level of support at 1.1626 could be tested with a potential for the currency pair to fall to 1.1540 in a decline below the initial support.
GBPUSD intraday analysis
GBPUSD (1.3031): The British pound posted strong gains after technical set up from the ascending triangle saw price action breaking past 1.2928. In the near term, the GBPUSD is likely to retest the breached resistance level. Establishing support at this level could indicate further gains to the upside. The next main resistance level is seen at 1.3205 which could be tested in the near term. To the downside, a close below 1.2928 could, however, signal a decline back with GBPUSD likely to trade within the range of 1.2928 and 1.2808.
XAUUSD intraday analysis
XAUUSD (1203.90): Gold prices retreated from a three week high with price action currently posting strong consolidation near the 20-period moving average on the 4-hour chart. Gold prices are likely to extend the short correction toward 1197.50 region to establish support. Forming a base around the support level could potentially pave way for gold prices to target 1219.75. To the downside, a close below the support could push prices lower toward 1180.25.