Euro looks to inflation data and Draghi speech
Daily Forex Market Preview, 17/10/2016
EURUSD continues to hover near the 1.1000 price level from Friday with final inflation figures due later today. Median forecasts point to a headline gain of 0.40% and 0.80% increase in the core CPI which comes ahead of Mario Draghi's speech later this afternoon. The ECB meeting will also be weighing on the euro which is due on Thursday. Meanwhile, the US dollar index sits comfortable near the 98.00 resistance level and could see some downside pressure if price fails to breach this resistance.
EURUSD Daily Analysis
EURUSD (1.0983): After closing below 1.1000 on Friday, EURUSD is currently attempting to retrace the losses from last week. The 4-hour chart shows the current H4 candle on a bullish note following the down gap on the opening session. A bullish close on the current session could signal some near term upside. Price could be seen challenging 1.1000 handle which could act as support. Therefore, the further upside can be expected only on a close above the 1.1000 handle with EURUSD seen likely to retest 1.1100 level for resistance. To the downside, if 1.1000 turns as resistance and caps the price gain, the next level to watch for is at 1.0950.
XAUUSD Daily Analysis
XAUUSD (1253.95): Gold prices have been consolidating near the 1250 handle, and with multiple tests to this support level, we could expect to see some near term risk to the upside. Immediate resistance is seen at 1265.50 - 1261.50 level which is essential to be cleared to expect any further gains in price. Above this resistance, further gains can be seen coming with the price likely to challenge 1278.00 resistance level followed by a retest back to 1300. To the downside, a breakdown below 1250 could keep prices remain biased to the downside, with 1200 psychological support being the next support of interest.
USDJPY Daily Analysis
USDJPY (104.24): USDJPY has been consolidating near 104.00 resistance level for the past three days. Price action has formed an inside bar on Friday and near the 104.00 resistance level could indicate a breakout that could keep the momentum going. On the 4-hour chart, the inclined head and shoulders is currently forming with the minor resistance seen at 104.34 - 104.20. A reversal here could mark the completion of the right shoulder and could signal near term declines towards 103.00 followed by a retest towards the next lower support near 102.00. Alternately, a close above 104.34 - 104.20 could invalidate the evolving head and shoulders pattern, signaling further upside.