Intraday Technical Analysis 4 January

The U.S. Dollar eased back following the gains from Wednesday. On the economic front, the UK’s construction PMI eased to 52.8 which was below estimates and down from November’s reading of 53.4.

Data from the U.S. showed that the ADP/Moody’s private payroll numbers surged 271k. The data beat the conservative estimates of 179k increase. However, payrolls for November were revised down to show a reading of 157k.

The ISM manufacturing PMI declined more than expected, falling to a two year low. Data showed that manufacturing activity dropped to 54.1 on the index missing estimates of a decline to 57.7. This was lower in comparison to November’s reading of 59.3.

The first busy day of the week will see investors turning attention to the data from the U.S. But ahead of this, the economic calendar today will cover the services activity for the Eurozone.

The Eurozone’s services PMI is forecast to remain steady at 51.4. Meanwhile, the UK’s services activity is expected to pick up slightly from 50.4 in November to 50.8.

Flash inflation estimates for the Eurozone are also due today. Headline consumer prices are expected to fall from 2.0% to 1.8% in January. Core inflation is however expected to remain unchanged at 1.0%. ECB officials had previously forecast about a short-term weakness in consumer prices. Producer prices data for December in the Eurozone is expected to ease 0.1% on the month.

The NY trading session kicks off with Canada and the U.S. labor market data. The U.S. unemployment rate is expected to remain steady at 3.7%. Wage growth is expected to rise 0.3% on the month while the U.S. economy is forecast to add 181k jobs in December.

Following the payrolls data, Fed Chair Jerome Powell is expected to speak later in the day which could keep investors busy.

EURUSD intraday analysis

EURUSD (1.1393): The euro currency was seen retracing the losses on Thursday. Price action managed to recover only from stalling near the minor trend line which was tested as reistance. A continuation of the bearish momentum could potentially push the EURUSD lower again. Price action will need to break past the previously established lows at 1.1334 level to push lower to 1.1273 level of support. To the upside, the common currency will need to break past the current local highs formed to recover the losses completely. Overall, the EURUSD remains range bound within 1.1451 – 1.1273 levels of resistance and support respectively.

AUDUSD intraday analysis

AUDUSD (0.7022): The AUDUSD currency pair managed to recover from the sharp declines on Wednesday. Price action is seen retesting the breached support at 0.7022 at the moment. Failure to break past this resistance level could keep the Aussie Dollar subdued. However, the declines are likely to stall in the near term, unless price breaks past the lows of 0.6933. In the near term, we expect the AUDUSD to maintain a sideways range within the said levels. A breakout from 0.7022 or 0.6933 will most likely set the direction in the near term.

XAUUSD intraday analysis

XAUUSD (1294.45): Gold prices advanced higher on the day as the price was seen testing the highs of 1294, marking a new seven month high. This comes following the brief retest of support at the 1280 handle. The bullish momentum looks firm for the moment, but there is the scope that gold will retest the 1280 handle in the near term. The lower pending retest of support at 1250 remains open, which exposes the downside risk in gold. Watch for price action to consolidate near the 1280 level in this regard. Failure to establish strong support at this level could risk pushing gold prices lower. To the upside, the next main target comes in at the round number of 1300.00.