The U.S. dollar was seen easing back on Monday with a slight risk on sentiment following the upcoming China – U.S. trade talks. However, there was some negative news as well with media outlets reporting Trump criticizing the Fed for raising interest rates and also calling out Europe and China for manipulating the currencies.
The comments came as the German Bundesbank released its monthly report. The German central bank said that the economy would be maintaining a strong trade surplus until next year.
The economic calendar for the day will see the release of the UK’s public sector net borrowing. Economists point to a decline of 2.1 billion. The NY trading session is quiet and later during the overnight trading session, the quarterly retail sales figures from New Zealand will be released.
Economists forecast that quarterly retail sales increased 0.4%, advancing from a 0.1% increase from the previous quarter. Core retail sales are expected to rise 0.8% up from 0.6% previously.
EURUSD intraday analysis
EURUSD (1.1523): The EURUSD currency pair was seen posting gains for the third consecutive day after the price fell to fresh yearly lows below 1.1400. Price action is currently testing the previously breached support level at 1.1540. A reversal near this resistance level is likely with the 4-hour Stochastics currently showing a hidden bearish divergence. A near-term pullback could give the needed correction. In the near term, price action could remain within 1.1540 and 1.1366 levels of resistance and support.
USDJPY intraday analysis
USDJPY (110.09): The USDJPY currency pair extended declines yesterday as price action was seen easing to a fresh two months low earlier today. The decline of the support level area between 111.13 – 110.85 signals the move lower. The USDJPY is likely to maintain its range below the resistance level with the retest of 109.45 likely. Establishing support here could signal a short-term rebound. Further declines can be expected only on a close below the support level at 109.45.
XAUUSD intraday analysis
XAUUSD (1194.03): Gold prices posted gains for two consecutive days after the previous decline to lows of 1160.32. The current rebound is expected to push the price of the precious metal toward the previous support level at 1211.50 to established resistance. Currently, the pace of gains is signaling a near-term correction to the downside. However, following the higher low, gold prices are likely to inch higher toward 1211.50. A break down below the previous lows could, however, signal further weakness in the currency pair.