Intraday Technical Analysis 3 December

The U.S. Dollar managed to erase some of the losses from Thursday. Price action managed to post a reversal sending most of the currencies to close weaker or subdued by Friday.

Data from the Eurozone showed that import prices in Germany rose 1.0% on the month. This beat estimates of a 0.4% increase and showed an acceleration from 0.4% previously.

Retail sales were, however, lower, falling 0.3% missing estimates of a 0.4% increase. The flash inflation estimates for the Eurozone registered a dip as inflation rose just 2.0% in November against estimates of a 2.1% increase. Core inflation was also weaker at 1.0%.

The NY trading session showed that Canada’s GDP contracted 0.1% in September on a monthly basis. This brought the third quarter GDP to rise just 2.0% in the three months ending September.

The G20 summit concluded over the weekend. The big news out of the event was that the United States and China agreed to a 90-day truce. This comes as both nations agreed to work out the trade differences. This meant that the planned hike on tariffs on over $200 billion worth of goods from China which is due to take effect from Jan 1 would now be postponed.

Meanwhile, China agreed to increase its purchase of U.S. goods including agriculture, energy and industrial products to reduce the trade deficit.

Looking ahead, the first trading day for December will see the Manufacturing PMI reports from the Eurozone. The final Eurozone manufacturing PMI is forecast to remain steady at 51.5, marking an unchanged print from the month before.

In the U.S. the ISM’s manufacturing PMI is expected to ease to 57.5 from 57.7 in October. Construction spending data is forecast to rise 0.4% on the month.

EURUSD intraday analysis

EURUSD (1.1351): The EURUSD currency pair was bearish on Friday as price action was seen giving up the gains made from the previous days. The euro fell back to the support area of 1.1315 – 1.1300 level. With price back at the familiar support level, the common currency could be seen attempting to post another reversal off this level. With the resistance level at 1.1435 not being tested recently, we could expect this to be the upside target. If the EURUSD slips below the support level, then the common currency can extend declines down to 1.1220 level.

GBPUSD intraday analysis

GBPUSD (1.2771): The British pound continues to consolidate around the support area of 1.2747 region. However, price action is starting to squeeze out from the falling trend line which also forms a descending triangle pattern. A break down below this support level could indicate further declines in the GBPUSD. To the upside, a clear break of the falling trend line to the upside is needed for the GBPUSD to post any gains. The upside target of 1.3086 remains the prime target.

XAUUSD intraday analysis

XAUUSD (1225.14): Gold prices gave up the gains logged from the previous day on Friday. However, price action posted a reversal just above the last support level of 1213.50. If price closes above 1223.50, the reversal would be confirmed. Gold prices will then most likely attempt to test the upper resistance level at 1242.25. Failure to clear the temporary resistance/support area of 1223.50 could, however, increase the risk of the downside. The lower support at 1204.00 will be the support level of interest.