Intraday Technical Analysis September 2018

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.

The British pound slumped on Monday after renewed concerns on Brexit. The Pound sterling fell as the UK’s manufacturing PMI fell to a 25-month low. Economic data from the U.S. was sparse with the U.S. and Canadian markets closed on account of the Labor Day holiday.
The RBA held its monetary policy meeting earlier today. Interest rates were left changed as widely expected. Later in the morning, the RBA Governor Lowe is expected to speak.

The European trading session is relatively quiet today. The UK will see the inflation report hearings scheduled while Switzerland will be releasing its monthly inflation figures.
The NY trading session will see the ISM manufacturing PMI report coming out. Median estimates forecast a decline in the index to 57.6 from 58.1 in the previous month. The construction spending data is expected to rise 0.5% on the month following a 1.1% decline previously.


EURUSD intraday analysis

EURUSD (1.1600): The EURUSD was slightly bullish on Monday but trading was subdued with the U.S. markets closed. Price action, however, was seen resuming the declines earlier on Tuesday. The euro currency briefly tested the resistance level at 1.1626 before reversing the gains below the 20-period moving average. Following the previous low posted at 1.1583, a close below this low could trigger further declines. The euro currency could be seen posting declines to the 1.1540 level of support in the near term.


GBPUSD intraday analysis

GBPUSD (1.2860): The GBPUSD currency pair gapped lower on Monday and briefly consolidated near the 1.2928 level of support. However, price action broke below this level and the minor trend line in the process as well. The declines are expected to push the cable down to the 1.2808 level of support. A rebound off this level is likely in the short term as price action could potentially reverse the losses. In the event that the GBPUSD closes below 1.2808 support, further losses could be expected.


XAUUSD intraday analysis

XAUUSD (1199.90): Gold prices continue to consolidate above 1197.50 support. Price action is, however, pointing to a potential correction to the downside if the support fails. The descending triangle pattern also validates this view. The downside target is seen around the 1180.25 level following the breakout from the rising price channel. A correction toward the 1180.25 region could spell a retest of the support level with gold prices likely to stay in a range within 1197.50 and 1180.25.

It was a busy day for the markets on Thursday. The U.S. dollar gave up the gains from the previous day leading to the Euro and the pound sterling posting activity on the day. The British pound was volatile after initial reports from Bloomberg showed that Germany was willing to make concessions for the UK under the Brexit deal.

However, reports later indicated that Germany did not change its stance. However, the sterling managed to maintain the gains. Services PMI from the UK showed a better than expected print as activity measured by the index rose to 54.3 in August.
The Bank of Canada held its monetary policy meeting. As widely expected, the central bank left interest rates unchanged in the backdrop of U.S. and Canada NAFTA negotiations. The BoC, however, reiterated that rate hikes would be required to prevent the economy from overheating.
The economic calendar for the day will see the release of the quarterly GDP report from Switzerland. GDP growth is forecast to rise 0.5% during the second quarter. Data from the Eurozone is quiet today with the focus shifting to the U.S. ADP payrolls report.
The median estimates point to a 195k forecast for private payrolls which is slightly lower than the 219k jobs seen the month before. The ISM’s non-manufacturing PMI report is expected to rise to 56.8 marking a slight increase from 55.7.
Other data includes the factory orders report and Canada’s building permits.


EURUSD intraday analysis

EURUSD (1.1632): The euro currency gained as the U.S. dollar took a breather. Economic data on Wednesday showed that the eurozone composite PMI increased in August. However, businesses were concerned about the economic outlook due to the trade wars. The Euro fell to the session lows of 1.1542 before rebounding off the support level. The currency pair tested 1.1656 region marking a retest of the minor rising trend line’s break out level. A reversal from this level would signal a decline back to 1.1540. This would, in turn, validate the head and shoulders pattern suggesting further declines to 1.1418.


GBPUSD intraday analysis

GBPUSD (1.2908): The cable posted moderately strong gains on Wednesday as price action rallied to spike higher to fill Friday’s close at 1.2959. Price action pulled back. Fundamentals were supportive of the jump with the news about Brexit talks and the services PMI. In the near term, we expect to see a firmer retest around 1.2959 region before the cable is expected to give up the gains. Strong support formed at 1.2808 which could be tested. We continue to watch for the head and shoulders pattern to evolve. A break down below 1.2808 could send the cable down to 1.2685 as the minimum measured downside target.


XAUUSD intraday analysis

XAUUSD (1198.10): Gold prices extended modest gains on Wednesday but gave up the gains rather quickly. Price action was seen reversing around 1197.50 where resistance is seen to have been established. The downside is likely to send gold prices lower to 1180.25 level which marks a retest of the support level which previously served as resistance. Establishing support at this level could potentially prepare gold prices for a longer term corrective move to the upside.

The economic calendar today will see the German industrial production numbers coming out. Forecasts point to a 0.3% increase on the month following last month’s decline of 0.9%.
The UK’s consumer inflation expectations report will also be coming out. The previous survey showed inflation expectations at 2.9%. The revised second-quarter GDP figures will be on the tap as well. No changes are expected to the Eurozone’s quarterly GDP growth rate of 0.4%.
A busy NY session will see the release of Canada and the U.S. unemployment figures. Canada is expected to add 5.1k jobs in August with the unemployment rate forecast to rise to 5.9%.
Meanwhile, the U.S. is forecast to add 193k jobs with the unemployment rate forecast to tick lower to 3.8%. The monthly average earnings are expected to rise at a slower pace of 0.2%.


EURUSD intraday analysis
EURUSD (1.1626): The euro currency closed with a doji on Thursday. Price action has become somewhat flat above the 1.1540 level of support. To the upside, the consolidation is seen just near the resistance area of 1.1656 – 1.1626 region. A breakout above this level is required in order for price action to test the next main resistance at 1.1730. To the downside, we expect the EURUSD to potentially retest the lower support at 1.1540.


GBPUSD intraday analysis
GBPUSD (1.2933): The British pound posted modest gains to test the 1.2950 region. The brief rally back to the unfilled gap from last week is likely to signal a decline back to the support at 1.2808. This will form a potential head and shoulders pattern. If the neckline support at 1.2808 breaks, the declines could be seen pushing the price to 1.2682 level. To the upside, if GBPUSD breaks out higher, we anticipate a test o 1.3031 marking the highs of August 30.


XAUUSD intraday analysis
XAUUSD (1201.21): Gold prices managed to post some gains on Thursday as price action rallied past the 1197.50 handle. With this level likely to turn to support, we expect further gains to push the price of the precious metal to 1219.75. In the near term, gold prices could remain flat within these two levels. A breakout above 1219.75 will likely push prices higher to the next main target of 1242.25. To the downside, we expect the support at 1183.29 to be tested.

The U.S. dollar posted strong gains on Friday fuelled by strong wage growth and overall positive sentiment for the currency. The official payrolls report for the month of August showed that the U.S. economy added 201,000 jobs during the beat.
This beat estimates of a 191k forecast. The unemployment rate held steady at 3.9% while the average hourly earnings doubled to rise 0.4%, beating estimates of a 0.2% increase.

On a year over year basis, average earnings rose 2.9% in August.
Canada’s jobs report was also released on Friday. Data showed that the economy shed 51.6k jobs during August with the unemployment rate rising to 6.0%.
Elsewhere, volatility spiked in the British pound once again on Brexit headlines but the cable soon eased back to give up its gains.
Earlier today, Japan released its final quarterly GDP figures. As expected, there were no revisions with the economy rising 0.7% in the second quarter. The data comes ahead of the BoJ’s meeting due the week after.
China’s inflation figures were also released. Data showed that headline CPI rose 2.3% beating estimates of a 2.1% increase. Producer prices jumped 4.1%, in line with estimates but slower than 4.6% from the month before.
Later in the day, the UK’s monthly GDP report will be released. Economists forecast a 0.2% increase on the month for August. The data is followed by industrial, manufacturing and construction output.
The NY trading session is relatively quiet for the day.



EURUSD intraday analysis

EURUSD (1.1539): The EURUSD extended declines on Friday as price action is seen testing the 1.1540 level of support. With the ECB’s monetary policy meeting due later this week, the currency pair could ease back and settle into a range ahead of Thursday’s big ticket event. The support at 1.1540 will be crucial as a break down below this level could send the common currency down to 1.1418 support. To the upside, the resistance area of 1.16656 – 1.1626 will need to be breached to post further gains.



GBPUSD intraday analysis

GBPUSD (1.2911): The British pound continues to remain volatile with the currency pair reacting to any report on Brexit talks. After rising to session highs of 1.3028, the currency pair fell back towards Friday’s close. We continue to watch the potential head and shoulders pattern that is evolving. A continued decline to 1.2808 neckline support and a break down below this level will trigger further selling. This could push the cable down to 1.2682 as the measured downside target.



XAUUSD intraday analysis

XAUUSD (1192.94): Gold was trading flat on Friday. Despite the previous attempt to break above 1197.50 the precious metal gradually gave up the gains. The 20-period EMA on the 4-hour chart is flat indicating the sideways price action. However, the daily chart is signaling a potential bearish flag pattern. With the recent bounce failing to test new highs, the precious metal could be seen heading lower. Watch for the retest of support at 1183.30 region in the short term.

The UK’s GDP data released yesterday showed that the monthly gross domestic product increased 0.3% on the month. The data beat estimates of a 0.2% increase and up from 0.1% previously. However, manufacturing production fell 0.2%. Construction output surprised, rising 0.5%. The data beat estimates of a 0.4% decline.
The British pound surged strongly on the day after reports of the EU Chief negotiator’s Michel Barnier’s comments about Brexit. The U.S. dollar eased back on the Brexit developments.


The EU trading session will start with the UK’s jobs report. Economists polled expect the UK’s unemployment rate to remain steady at 4.0%, unchanged from the previous month. Average earnings are forecast to rise 2.5% over the three months ending August.
In the Eurozone, the German ZEW economic sentiment is expected to show -13.4. The NY trading session is quiet with only the wholesale inventories report coming out. Canada will be releasing the housing starts data which is expected to rise 218k.
EURUSD intraday analysis

EURUSD (1.1599): The EURUSD currency pair closed bullish on Monday on a softer greenback. The rebound in prices came after the euro currency tested the technical support at 1.1540. The upside bounce could keep price action trading within the range of 1.1730 and 1.1540. A breakout from this range will most likely establish a new change in trend. To the upside, above 1.1730 resistance, the EURUSD could be seen testing the next main resistance at 1.1920. To the downside, the lower support at 1.1400 remains within the target.
GBPUSD intraday analysis

GBPUSD (1.3038): The British pound broke out to the upside clearing the minor falling trend line and the horizontal resistance level at 1.2958. The upside bounce puts GBPUSD to the upside. We expect to see a retest of the breakout level at 1.2958. Establishing support here could trigger further gains toward 1.3205 resistance level. With price action testing the highs from August 30, we expect a correction to 1.2958. This could most likely result in a cup and handle formation. The measured target puts price action in line to test 1.3205 resistance.
XAUUSD intraday analysis

XAUUSD (1193.98): Gold prices remain trading flat with a lot of consolidation taking place around the 1197.50 level. Price action has been trading within the larger triangle pattern. The risks are equally balanced with gold prices likely to move in either direction. To the upside, the target at 1219.75 remains in question while to the downside, the declines could stall at 1183.30 level of support. The overall trend in gold prices remains to the downside for the moment.

The British pound managed to post some modest gains on Tuesday after data showed that average earnings increased 2.9% on the year excluding bonuses in July. The data beat estimates and the unemployment rate held steady at 4.0%.
The pound sterling was giving up the gains from Monday following Barnier’s comments about reaching a Brexit deal in the next four to six weeks. The GBP eased with lack of any follow up on the Brexit developments.

The German ZEW economic sentiment report showed the index improved to -10.6, missing estimates of a -13.5 decline.
The economic data for the day will start off with the industrial production numbers for the Eurozone. Economists polled expect industrial production to fall 0.5% on the month. This extends the previous month’s decline of 0.7%.
The NY trading session will see the U.S. producer prices index coming out. PPI is forecast to rise 0.2% on the month after a flat print previously. Core PPI is expected to also rise 0.2%.
FOMC member, Brainard will be speaking later in the day. Her comments come ahead of the FOMC meeting later this month.


EURUSD intraday analysis

EURUSD (1.1586): The EURUSD currency pair test the resistance area of 1.1656 – 1.1626 region. Price action failed to break past this level moving back lower. We expect to see the downside continue as the common currency is expected to retest the lower support at 1.1540. The larger triangle pattern could signal a downside breakout to 1.1418 if the support at 1.1540 gives way. To the upside, the EURUSD needs to clear the resistance area convincingly in order to post further gains.


GBPUSD intraday analysis

GBPUSD (1.3006): The British pound failed to break the previous highs around 1.3034 and as a result established a double top pattern. We anticipate a modest pullback to the price action. The lower support at 1.2959 remains the most likely target to the downside. Establishing support here could potentially trigger a short-term uptrend upon a successful breakout of the double top pattern. This will establish the upside target to 1.3205. In the event that the support at 1.2959 fails to hold the declines, GBPUSD could be seen pushing lower and being exposed to the lower support at 1.2808.


XAUUSD intraday analysis

XAUUSD (1193.87): Gold prices are moving back into a consolidation phase. The 4-hour chart signals the consolidation with the triangle pattern. Price action has been hovering around the 1197.50 level for the past few weeks. The downside support is seen at 1183.30 while to the upside, the resistance level at 1219.75 remains open. However, with the strong consolidation, gold prices are expected to maintain the range. A clear breakout above 1197.50 is required for the upside target of 1219.75 to be reached while the downside support at 1183.30 could hold the declines in the near term.

The U.S. dollar eased back strongly on Wednesday. The United States was seen making attempts to hold trade talks with China. On the economic front, data from the Labor Department showed that producer prices fell 0.1% in August unexpectedly. This was the first monthly decline since February 2017. Economists polled expected to see PPI rise 0.2% on the month.
Oil prices surged on a report from OPEC about rising demand and tighter supplies. Weekly inventory report from the EIA showed U.S. crude oil stockpiles fell 5.3 million barrels last week.

Australia’s employment data released earlier today showed that the unemployment rate was steady at 5.3%. The economy added 44k jobs during August, beating estimates of a 16.5k increase.
The day ahead is expected to be busy with the BoE and the ECB meetings lined up. The Bank of England is expected to keep interest rates unchanged. The recent uptick in wage growth and monthly GDP could bring some cheer to policy-makers.
Later in the day, the European Central Bank will be holding its monetary policy meeting. No changes are expected and investors remain clued into the central bank’s forward guidance on interest rates.
The U.S. consumer price index data will be coming out later today. Headline CPI is expected to rise 0.3% accelerating from 0.2% increase previously. Core CPI is expected to rise at a steady pace of 0.2%.


EURUSD intraday analysis

EURUSD (1.1636): The euro currency managed to post modest gains for the third consecutive day. However, price action was seen trading rather subdued. Price action on the 4-hour chart shows the EURUSD still trading with the adjusted descending triangle pattern. With strong support established at 1.1540, we expect to see a potential upside breakout. As the common currency trades in the resistance area of 1.1656 – 1.1626, we expect a potential upside breakout above this level. However, to the downside, the EURUSD will need to break below the strong support to push lower to 1.1418.


GBPUSD intraday analysis

GBPUSD (1.3048): The British pound was seen struggling near the double top resistance level of 1.3034. Price action managed to slightly lift off above this level. With the BoE meeting due later today, we could expect to see some volatility. The upside is likely to see GBPUSD rally toward 1.3205 level of resistance. For this, a successful retest of the current resistance level of 1.3034 will be required. Establishing support could confirm the upside bias. To the downside, there is a risk for GBPUSD to retest the support near 1.2959.


XAUUSD intraday analysis

XAUUSD (1205.67): Gold prices lifted higher on Wednesday as price action is seen posting an upside breakout. Having cleared the 1200.00 round number resistance, we could expect further gains. In the near term, gold prices could retest the breakout level before targeting the resistance level of 1219.75. To the downside, support is seen at 1197.50 which could be tested once again.