By Orbex Blog
Daily Forex Market Preview, 16/05/2018
The markets were trading mixed amid a day that saw weaker economic reports from the Eurozone and a slightly upbeat jobs report from the UK. The U.S. dollar gained strength late in the day as the currency surged on rising yields.
The UK’s monthly jobs report showed that real wages were finally starting to grow. Average earnings excluding bonuses rose at a pace of 2.9% in the first quarter of the month as the UK’s unemployment rate held steady at 4.2%, unchanged from the month before. The employment rate also increased to 75.6%.
Data from the Eurozone was somewhat subdued. Germany’s first quarter GDP growth was seen rising at a pace of just 0.3% compared to the 0.7% increase seen in the previous quarter. The Eurozone’s second revised GDP estimate was unchanged at 0.4%.
Get our Weekly Commitment of Traders Report: - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.
Get Our Free Metatrader 4 Indicators - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter
Looking ahead, the economic calendar for the day will see the release of the final inflation figures from the Eurozone. Economists forecast that the headline CPI increased 1.2% on the year in April while core CPI is forecast to rise at a slower pace of 0.7% on the year. The ECB President Mario Draghi is expected to speak later in the day.
Data from the U.S. will see the release of the monthly building permits data while Canada’s manufacturing sales is expected as well. Later in the evening, the SNB Chairman, Thomas Jordan is expected to speak.
EURUSD intra-day analysis
EURUSD (1.1833): The EURUSD extended losses strongly on the day as price action fell to the previous lows below 1.1832. The retest of this level near could potentially signal a rebound in prices but price action is likely to stall back near the resistance level. A breakout above the resistance level of 1.1960 – 1.1920 could confirm the upside bias. In the near term, if the resistance holds, then EURUSD could be seen pushing lower to test the next support level 1.1730.
GBPUSD intra-day analysis
GBPUSD (1.3502): The British pound eased below the 1.3530 level of support yesterday as the currency fell on the jobs report release. Still, we expect to see the consolidation continuing at this price level. A near term rebound back to 1.3530 could signal a brief retest of this level. If price action turns weaker at this level, we could expect to see the losses falling lower toward the 1.3500 level of support. To the upside, the bias can only shift on a strong close above the 1.3530 level.
XAUUSD intra-day analysis
XAUUSD (1294.57): Gold prices fell strongly on the day as price action breached past the 1300 level of support. The decline below this level could suggest a near term consolidation with further losses likely to push gold prices lower toward the 1250 level of support which remains the next target. To the upside, any corrective rallies could potentially stall near the 1311 – 1307 level of resistance.