Markets open to a busy week of central bank decisions

The U.S. dollar was seen trading mixed on Friday. Investors are looking to a busy trading week that will see the Fed’s meeting and the ECB and the BoJ central bank decisions.

On Friday, Japan’s GDP showed that the quarterly expansion declined to a revised 0.2%. This was more than the forecasts which suggested that the GDP would be revised to show a decline of 0.1% instead.

Data from the Eurozone continued to remain weak with German industrial production falling 1.0% on a month over month basis. The data comes ahead of the ECB’s meeting this week where policy makers are likely to debate on the QE exit plans.

Canada’s jobs report showed that wage growth advanced strongly as the unemployment rate held steady at 5.8%. However, the economy posted net decline in jobs. The monthly employment change fell 7.5k on the month extending from 1.1k declines just the month before.

Looking ahead, the economic calendar today will see the release of the UK’s manufacturing and industrial production figures. Estimates show that manufacturing production increased 0.3% on the month while industrial production advanced 0.1% on the month.

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EURUSD intra-day analysis

eurusd intra-day analysis

EURUSD (1.1792): The EURUSD currency pair managed to hold steady above the 1.1730 support level with Friday’s price action seen briefly testing this level. A firm retest of this support could potentially signal a near term correction to the upside as the currency pair targets the resistance level at 1.1960 – 1.1920 region. On the 4-hour chart with price action making a hidden bullish divergence at the mentioned support, we expect to see the upside being confirmed. However, the EURUSD could remain range bound within the levels of 1.1846 – 1.1730 in the near term, with a breakout off this level confirming the next direction in the trend.

USDJPY intra-day analysis

usdjpy intra-day analysis

USDJPY (109.72): The USDJPY currency pair was seen trading at the support level of 109.57 – 109.43 level. With the support level holding up, we expect to see the currency pair pushing higher in the near term. However, failure to break out above the previous highs could signal weakness in the currency pair. To the upside, the resistance level at 110.62 remains the target, while to the downside, the support level at 108.90 is likely to be tested in the short term.

XAUUSD intra-day analysis

xauusd intra-day analysis

XAUUSD (1299.43): The consolidation in gold prices continues as price action remains subdued below the 1300 level. Still, there is scope for gold prices to extend the declines down to 1282 level in the short term. To the upside, gold prices will need to convincingly breakout above the support level at 1300 in order to confirm the upside toward 1325 level of resistance that is pending a retest. The consolidation could break closer to the FOMC and the ECB meetings that are due this week.

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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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