Intraday Technical Analysis 7 January

The U.S. Dollar closed flat on Friday. The day was marked with some mixed economic reports and a speech by Fed Chair Jerome Powell which sent the equity markets briefly higher easing back the risk-averse sentiment in the market.

On the economic front, the Eurozone’s final services PMI was seen to have declined to 51.2. This was below estimates of 51.4 according to the flash estimates. Services PMI was seen to have turned weaker across Germany and France as well.

Inflation estimates from the Eurozone also had some bad news as the headline inflation rose 1.6% which was slower than the expected forecasts of 1.8%. In November, consumer prices were seen at 2.0%. Core inflation data was seen to be stable at 1.0%.

In the NY trading session, Canada’s unemployment data showed that the economy added 9.3k jobs which were higher than the estimates of a 6.8k increase. Canada’s unemployment rate held steady at 5.6%, unchanged from the previous month.

The U.S. payrolls data, on the other hand, showed that the unemployment rate rose to 3.9%, up from 3.7%. Average hourly earnings were seen rising 0.4% on the month which was better than forecasts.

Looking ahead, the data today will cover the factory orders report from Germany. Economists forecast that factory orders will fall 0.2% on the month. Retail sales from Germany follows later which is forecast to rise 0.4% on the month.

The NY trading session is relatively quiet with only the ISM’s non-manufacturing PMI report coming out. Economists expect the non-manufacturing PMI to slip to 59.6, down from 60.7 previously.

EURUSD intraday analysis

EURUSD (1.1423): The Euro currency was seen consolidating near the breakout of the trend line for the most part on Friday. Price action was seen establishing a temporary resistance level near 1.1405 level. As long as this level does not break, the EURUSD could be seen maintaining the pressure to the downside. There is temporary support formed near the previous local low at 1.1335 level. A break down below this level will see the EURUSD testing the next lower support at 1.1273 region

AUDUSD intraday analysis

AUDUSD (0.7134): The Australian Dollar managed to break past the breached support level at 0.7022 which did not offer much resistance. The rebound in price action saw the currency closing with strong gains. In the near term, following a modest dip, the upside momentum is likely to be maintained. The next main target for the AUDUSD comes in at 0.7191 level which has previously held up as resistance. As a result, the AUDUSD could soon settle into the range within 0.7191 and 0.7027. A further breakout from this range could establish the next leg in the direction of the trend. The recent declines coincided with the retest of the longer term trend line. As a result, we can conclude that support is likely to be firm at the 0.6936 level

XAUUSD intraday analysis

XAUUSD (1289.32): Gold failed to maintain the bullish momentum last week as price action reversed course just a few ticks shy of the 1300 round number resistance. As a result, the gold price settled lower at the 1280 level which we are closely watching. For the moment, the strong bullish reversal on Friday has established support at this level. Gold prices will now have to post a higher high to test the 1300 level. Failure to do so could keep price action subdued and expose the risk of the support level at 1280 giving way. This could open the price action to test the lower support at the 1250 handle.