It’s the last trading day of the year
Daily Forex Market Preview, 30/12/2016
The U.S. dollar gapped lower in today's session, giving a short term boost to the euro which rallied above 1.0600 before giving up its gains. In yesterday's session, the weekly unemployment claims showed a modestly better than expected print as claims rose 265k, less than forecasted. On the commodity front, oil prices were seen falling as the weekly crude oil inventories report showed an unexpected increase in stockpiles last week. The OPEC's production cuts come into effect starting January and could keep oil prices supported in the near term. On the economic front, Chicago PMI data is on the tap today but for the most part, trading is likely to be subdued with lack of any fundamentals to go by.
EURUSD Intra-day Analysis
EURUSD (1.0540): EURUSD spiked higher in today's early Asian trading rising to 1.0653, marking an 11-day high. With the initial target of 1.0533 breached, followed by the round number at 1.0600, EURUSD could remain range bound in the near term although the bias remains to the upside. Any declines could be limited to the inverse head and shoulders pattern's neckline resistance which could turn to support. In this case, EURUSD could see further gains that could push the single currency towards 1.0700. To the downside, failure to stall near 1.0472 - 1.0463 could potentially signal further weakness towards 1.0400.
GBPUSD Intra-day Analysis
GBPUSD (1.2273): GBPUSD has formed an inside bar in yesterday's trading session and could signal a near term continuation or a change in the trend. To the downside, price action is likely to be limited towards 1.2250 - 1.2224 support level which has been marked by strong consolidation over the past few days. A bounce off this support could signal near term gains towards 1.2400 while the longer term target remains towards 1.2571. In the event of price falling below 1.2224, the bullish bias could be invalidated for the near term.
XAUUSD Intra-day Analysis
XAUUSD (1160.66): Gold prices have advanced, rising above the 1150 handle and could signal further continuation towards 1200.00. In the near term, watch for a potential dip back to 1150 handle where support could be established. On the 4-hour chart the Stochastics point to a hidden bearish divergence in prices which could potentially keep gold prices subdued in the near term. However, the declines look to be completed for now as long as 1150 forms the new base in the short term. As an alternative, if gold prices fall below 1150, further declines could be seen coming potentially paving way for a test to 1100.