Daily Forex Market Preview, 14/09/2017
The British pound’s strong rally saw prices rising to a fresh one-year high, but the gains were capped as the latest jobs data showed that wage growth increased just 2.1% on the year. Compared to the 2.9% increase in inflation, the soft pace of wage growth kept the GBP in check. Investors shrugged off the unemployment rate which fell further to 4.3%.
Elsewhere, the US producer price index data showed a modest increase of 0.2% on the headline and 0.1% on core PPI, which was slightly better than the previous month. The US dollar was seen recovering on the back of the PPI data and easing global tensions.
Looking ahead, the SNB and the BoE meetings are the big-ticket events today. Both central banks are expected to hold monetary policy steady. For the BoE, traders will be looking to the forward guidance from the central bank.
EURUSD intraday analysis
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EURUSD (1.1877): The EURUSD extended declines yesterday as price action fell to the lower support level of 1.1882. The decline invalidates the cup and handle pattern that was being anticipated. Still, price action remains trading flat at the current levels with resistance at 1.1962 likely to be tested in the near term. This sideways range could signal a possible near-term breakout. Above 1.1962, EURUSD could once again aim for the next big level of 1.2058, while to the downside, a break down below 1.18822 could signal a move towards the next main support that comes in at 1.1688.
GBPUSD intraday analysis
GBPUSD (1.3203): The British pound posted declines yesterday as price action rallied to a fresh one-year high at 1.3328. We now expect the declines to continue further although GBPUSD could be seen posting a modest test towards 1.3236 level to establish resistance. The downside bias increases on a potential break down below 1.3160 support level. Below this level, GBPUSD comes at a risk of a strong decline towards the lower support at 1.2980 – 1.2961. Today’s BoE meeting could be the main event that will influence the cable.
XAUUSD intraday analysis
XAUUSD (1321.84): Gold prices formed a bearish engulfing candlestick pattern yesterday near the support level of 1324.72 which also marks the previous gap from September 1st. In the event that gold prices post a reversal, we can expect the near-term gains to push the precious metal to test the 1345.87 highs which are also marked by the unfilled gap from 8th September. To the downside, a continuation could see gold prices falling to levels of 1300.00 support level.