Busy start to the GBP with Carney's speech
Daily Forex Market Preview, 16/01/2017
U.S. markets are closed today on account of Martin Luther King Day. Economic data is quiet ahead of another busy week. The Bank of England Governor, Mark Carney will be speaking later this afternoon and his comments come a day before the British PM Theresa May will be holding her press conference on Brexit. It is a busy week for the British pound which besides the BoE governor and PM Theresa May's speech will also see economic reports on inflation, jobs, and retail sales. The volatility in the British pound can be seen with GBPUSD gapping lower on the open near 1.20.
EURUSD intra-daily analysis
EURUSD (1.0626): EURUSD is likely to maintain the gains from last week with the potential rally stalling near the previously established resistance at 1.0765 - 1.0800. A reversal at this resistance level could see EURUSD remain range bound within 1.0800 and 1.0500 where support has been established near 1.055 - 1.0500. The daily Stochastics is currently pointing to a hidden bearish divergence which could keep EURUSD biased to the downside. In the near term watch for EURUSD to post a reversal near 1.0700 ahead of a decline back to 1.0550.
XAUUSD intra-day analysis
XAUUSD (1206.89): Gold is seen making another attempt to test the resistance level at 1200.00 this morning with price currently trading near 1207. The 4-hour Stochastics is showing a bearish divergence near this resistance level, and a break below 1200.00 will confirm a potential correction towards 1181.50 followed by a test of support near 1161.00. A pullback to the price level near 1150 - 1160 could mark a possible correction to the recent uptrend followed by further gains likely to come. In the event that gold prices close above 1200.00 on a bullish note, further gains can be expected.
USDJPY intra-day analysis
USDJPY (113.78): USDJPY is seen extending the declines for the fifth consecutive day with the price action currently struggling near the support level at 114.00. A break down below this support could trigger steeper declines. However, the Stochastics remains oversold and could potentially post a short-term pullback. On the 4-hour chart, USDJPY is currently seen trading below 114.00 after this support previously managed to hold prices. In the short term, USDJPY could see another retest towards 115.25 which served as support previously. Forming resistance near 115.25 could potentially send USDJPY lower, towards 109.75 - 109.50.