Intraday Technical Analysis 3 September

The U.S. dollar was seen gaining ground on Friday as the markets closed the month of August. Economic data on the day showed that the flash inflation estimates for the Eurozone rose at a slower pace of 2.0% on the headline and 1.0% on the core inflation rate. This was slower than the median forecasts and compared to the month before.

German retail sales also came out weaker, falling 0.4% on the month which was more than the median forecasts. Previous month’s data was also revised lower.

Meanwhile, in the U.S. the Chicago PMI showed an increase to 63.6 on the index which beat estimates but was still lower than 65.5 from the month before.

The UoM’s consumer sentiment index was seen rising to 96.2 from 95.3 previously.

The day ahead will see the U.S. and the Canadian markets closed due to Labor Day holiday.

The UK will be releasing the manufacturing PMI which is expected to ease to 53.9 from 54.0 previously. The data from the Eurozone will be dominated by the manufacturing PMI’s.

EURUSD intra-day analysis

EURUSD (1.1599): The euro currency posted strong losses on Friday as the flash inflation estimates showed a slower pace of gain in inflation. The euro extended the declines following a brief reversal off 1.1730 resistance level. With price action closing below the first level of support at 1.1626, the common currency is expected to test the lower support at 1.1540. Establishing support here could give some upside to the currency pair. However, in the event that the euro currency slips below 1.1540, then we expect to see further declines in store.

GBPUSD intra-day analysis

GBPUSD (1.2925): The British pound gradually reversed the strong gains made last week. The British pound had jumped on the news about EU and the UK making efforts to reach the Brexit deadline in October. Price action gapped lower to retest the previously established resistance level at 1.2928. Establishing support at this level could potentially pave way for a bullish turnaround. The long-term upside target is 1.3205. However, in the event that the GBPUSD slips below the support level, we could expect to see some consolidation taking place.

XAUUSD intra-day analysis

XAUUSD (1199.16): Gold prices fell to the support level at 1197.50 and price action has been trading rather flat near this level. With the minor trend line being breached, gold prices could be at risk of slipping to 1180.25 support. Forming support at this level could still keep the bias to the upside. Alternately, if gold prices manage to establish support at 1197.50 then we can expect to see the upside target of 1219.75 being tested easily.