The U.S. dollar was seen trading volatile a day after the Fed hiked rates. On the economic front, the Bank of Japan’s meeting held yesterday did not see any major changes. The central bank left interest rates unchanged as widely expected.
Data from the UK showed that retail sales increased 1.4% on the month. This beat estimates of a 0.3% increase while the previous month’s data was revised to show a 0.4% decline. The Bank of England held its monetary policy meeting and left interest rates unchanged as widely expected. The BoE Governor, however, cautioned that there were increased risks for Brexit as the deadline for March 2019 nears.
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The NY trading session was quiet with only the Philly Fed manufacturing index data coming out. Manufacturing activity eased to 9.4 on the regional index, missing estimates of an increase to 15.1.
Following a busy two days, the markets look to the last trading day of the week. The economic calendar is somewhat busy.
The UK’s current account report will be coming out followed by the final revised GDP estimates for the third quarter. No changes are expected as the UK’s economy is set to have increased by 0.6% in the three months ending September.
Canada’s retail sales and GDP numbers are due later during the NY trading session. Retail sales are forecast to rebound, rising 0.6% on the month following a 0.2% increase previously. Core retail sales are also expected to rise 0.3% during the same period.
The monthly GDP report is due which is expected to show a 0.2% increase in the economy. Data from the U.S. will see the final revised GDP estimates for the third quarter. No changes are expected as the third quarter GDP is set to have increased 3.5%.
The core PCE price index, the Fed’s preferred gauge of inflation is also due. Economists polled expect the core PCE price index data to rise 0.2%. Personal spending is expected to rise 0.3%, a somewhat slower pace compared to the 0.6% increase previously. Personal income data is also expected to slow, rising just 0.3% compared to a 0.5% increase the month before.
EURUSD intraday analysis
EURUSD (1.1445): The EURUSD is seen attempting to breakout past the resistance area of 1.1450 – 1.1435 region. The rebound comes after prices tested the breakout level from the falling trend line. The common currency remains volatile, and with the current test of resistance, price action could move in either direction. A clear breakout above the resistance level could potentially put the EURUSD on track to test the next main level at 1.1700. To the downside, the trend line and the horizontal support will be able to contain the declines.
GBPUSD intraday analysis
GBPUSD (1.2650): The GBPUSD remains trading subdued with price action seen firmly retesting the resistance level near 1.2683. As long as this resistance holds, we expect the currency pair to trade flat within the said range. With price action posting a consecutive higher high, watch for the potential ascending triangle pattern being formed. A breakout above 1.2683 could trigger further gains to the upside. The minimum upside target is at 1.2811.
XAUUSD intraday analysis
XAUUSD (1259.09): Gold prices posted a strong rally on the day on Thursday. Price briefly tested the support at 1242.25 before pushing higher. This could potentially keep gold prices biased to the upside. The next main target could be seen at the 1280 handle. In the event that gold prices fall below 1242.25, we expect the correction to push the price lower to the 1227.10 handle where support is pending a retest.