The EUR/USD pair fell down to 1.0699 this Wednesday, bouncing modestly afterwards, but maintaining the soft tone in the London morning. Stocks continue consolidating as the Trump euphoria receded, with European index trading modestly lower, but not far from their opening levels. The USD 10Year yield is above 2.20%, after a brief decline, underpinning the greenback.
There are no macroeconomic news in the EU scheduled for this Wednesday, but the US will release its October PPI figures, and its latest industrial production data, generally expected to have improved from the previous month.Read more
Capprofx – Gold prices stayed positive in Asia on Friday after stronger than expected gains in China consumer and producer prices data.
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The price above 200 MA, indicating a growing trend.
The MACD histogram is above the zero line.
The oscillator Force Index is above the zero line.
If the level of resistance is broken, you should follow recommendations below:
• Timeframe: H4
• Recommendation: Long Position
• Entry Level: Long Position 1376
• Take Profit Level: 1389 (2300 pips)
If the price rebound from resistance level, you should follow recommendations below:
• Timeframe: H4
• Recommendation: Short Position
• Entry Level: Short Position 1363
• Take Profit Level: 1355 (800 pips)
Here are the key factors to keep in mind today for Gold trades:
- Australian Trade Balance: The Australian Trade Balance for April was reported at -A$1,579M. Economists predicted -A$2,100M. Forex traders can compare this to the Australian Trade Balance for March which was reported at -A$1,971M.
- Australian Retail Sales: Australian Retail Sales for April increased by 0.2% monthly. Economists predicted an increase of 0.3% monthly. Forex traders can compare this to Australian Retail Sales for March which increased by 0.4% monthly.
- British Markit/CIPS Construction PMI: The British Markit/CIPS Construction PMI for May is predicted at 52.0. Forex traders can compare this to the British Markit/CIPS Construction PMI for April which was reported at 52.0.
- Eurozone PPI: The Eurozone PPI for April is predicted to increase by 0.1% monthly and to decrease by 4.1% annualized. Forex traders can compare this to the Eurozone PPI for March which increased by 0.3% monthly and decreased by 4.3% annualized.
- ECB Rate Decision: The ECB is predicted to to announce its Interest Rate at 0.00%, its Deposit Facility Rate at -0.40% and its Marginal Lending Facility Rate at 0.25%; this would equal no change in the ECB rate policy from the previous meeting. The Asset Purchase Target is predicted at €80B, also unchanged from the previous meeting.
- US ADP Employment Change: The US ADP Employment Change for May is expected at 175K. Forex traders can compare this to the US ADP Employment Change for April which was reported at 156K.
- US Initial Jobless Claims and Continuing Claims: US Initial Jobless Claims for the week of May 28th are expected at 270K and US Continuing Claims for the week of May 21st are expected at 2,152K. Forex traders can compare this to US Initial Jobless Claims for the week of May 21st which were reported at 268K and US Continuing Claims for the week of May 14th which were reported at 2,163K.
Should price action for Gold remain inside the or breakout above the 1,205.80 to 1,220.20 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1,215.00
- Take Profit Zone: 1,289.00 – 1,301.00
- Stop Loss Level: 1,197.00
Should price action for Gold breakdown below 1,205.80 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1,203.00
- Take Profit Zone: 1,190.00 – 1,197.00
- Stop Loss Level: 1,210.00
USDCAD – Remains bullish above the 1.4000 zone following a break and hold above that level during Wednesday trading session. This is coming on the back of its Tuesday downside price rejection to close higher. On the upside, resistance resides at the 1.4150 level where a break will target the 1.4200 level. Further out, resistance comes in at the 1.4250 level where price hesitation may occur. But if further recovery is seen, the pair could strengthen more towards the 1.4300 level. Its daily RSI is bullish and pointing higher supporting this view. On the downside, support lies at the 1.4000 level followed by the 1.3950 level. Further down, support stands at the 1.3900 level and then the 1.3850 level. All in all, USDCAD remains bullish above the 1.4000 zone after breaking and holding above that level on Wednesday.
The USD/JPY pair halted its FOMC-backed bullish momentum at 122.65 levels and eased a bit heading towards the late-Asian session, on the back of minor profit-taking after the relentless rise overnight.
USD/JPY forms a small doji on daily charts
Currently, the USD/JPY pair trades 0.20% higher at 122.45, easing-off fresh six-day highs reached at 122.64 in early trades. The major remains underpinned and now consolidates the upside above 20-DMA at 122.40, after witnessing three consecutive sessions of heavy gains.
Moreover, with the Asian equities paring some gains, risk sentiment appears to cool-off as dust settles over the Fed hike aftermath, and therefore keeps a lid on the prices. The Nikkei now trades 1.77% higher versus 2.50% previous while Australia’s S&P/ASX rises 1.62% versus 2% previous.
However, the retreat in USD/JPY is likely to remain short-lived as the greenback is expected to remain strongly on the bids, with markets favouring the US currency after the Fed rate hike by a quarter percent and signalled 100 bps rise next year.
On data-front, the US calendar holds a few US economic news, including the Philly Fed manufacturing gauge, weekly jobless claims and current account data.
USD/JPY Technical levels to watch
In terms of technicals, the immediate resistance is located at 122.85 (daily R1). A break above the last, the major could test 123/123.06 (round number/ Dec 9 High). While to the downside, the immediate support is located at 122.18 (50-DMA) below which 122.01 (1h 200-SMA) would be tested.