The U.S. dollar continued to extend the declines on Tuesday although price action was mostly subdued. The declines came following the U.S. President Trump’s interview with Reuters. During the interview, Trump criticized the Federal Reserve for hiking interest rates. He also called out China and Germany for manipulating their respective currencies.
The comments come in the backdrop of looming trade talks with China. Economic data was sparse on Tuesday. New Zealand’s quarterly retail sales report released later in the evening showed a 1.1% jump on the quarter. This beat estimates of a 0.4% increase. Core retail sales increased 1.4% beating estimates of 0.8%.
The economic calendar remains quiet for the most part during the European trading session. The NY trading session starts off with the release of the retail sales report from Canada.
This is later followed up by the U.S. existing home sales. Later in the afternoon, investors will be tuned to the FOMC meeting minutes. The minutes cover the Fed meeting where interest rates were kept unchanged.
EURUSD intraday analysis
EURUSD (1.1571): The three consecutive days of gains in the EURUSD was met with price action briefly rising above the 1.1540 level of resistance. The strong rally over the past four days could see some near-term retracement with the Fed minutes due later today. Any retracement could be limited to the 1.1540 level which could now act as resistance. A break down below this level could keep the EURUSD subdued and trading flat within 1.1540 and 1.1366 levels. To the upside, the next main resistance is seen at 1.1626.
USDJPY intraday analysis
USDJPY (110.43): The USDJPY managed to close with some gains on Wednesday following the previous days of decline. The temporary reversal could potentially expose the currency pair to retesting the breached support area of 111.13 – 110.85. Establishing resistance here could pave way for the USDJPY currency pair to extend the declines back, potentially testing the support at 109.45. In the unlikely event that price action breaks past 111.13, we could expect further gains targeting 112.18.
XAUUSD intraday analysis
XAUUSD (1194.91): Gold prices extended gains for three consecutive days so far as price action closed at 1195.93. Further gains could be capped by the lower trend line of the falling price channel from which it broke out. A reversal here could see a possible retracement back to 1180.24. Establishing support here could signal a higher low being formed. This could potentially post a reversal in price action that could see bullish momentum building up. A break down below 1180.24 could, however, send the price of the precious metal back to previous lows.