US Dollar holds steady as elections kick off
Daily Forex Market Preview, 08/11/2016
The US dollar closed Monday at a 4-day high, as the ICE futures, US dollar index closed at 97.77. With the FBI announcing that there was no new evidence against Ms. Clinton, the US equity markets also posted strong gains with the leading indexes closing the day with over 2% of gains. The S&P500 futures finally snapped out of a four day consecutive losing streak. With the US elections underway, the markets are preparing for a Clinton victory, but nothing is set in stone until the final votes are counted.
EURUSD Daily Analysis
EURUSD (1.1043): EURUSD closed at a 4-day low yesterday after gapping lower on the open. Price action is seen currently taking support off the outer median line on the daily chart which could act as dynamic support. On the 4-hour chart, the price has cleared the 1.1070 - 1.1060 minor support but a retest back to this level cannot be ruled out. As long as this level now holds out as resistance, EURUSD could see further declines to 1.1000 - 1.1097 lower support. The 4-hour Stochastics remains oversold currently which supports the short-term retracement towards 1.1070 - 1.1060. Above this resistance, level EURUSD could be seen retesting the 1.1100 resistance level, but further gains could be capped.
USDJPY Daily Analysis
USDJPY (104.36): USDJPY closed on a bullish note yesterday above 104.00, but the upside gains are starting to look difficult to maintain. Over the past six 4-hour sessions, USDJPY has repeatedly failed to breach 104.45 - 104.60 resistance level which could signal a near term pull back to this rally. There is an unfilled gap at 103.09 which could be targeted to the downside. Short term support is seen at 104.00 but with price stalling at the resistance level and the 4-hour Stochastics pointing to a hidden bearish divergence, a pullback to 103.25 cannot be ruled out. USDJPY remains bullish as long as prices remain supported above 103.25 - 103.00.
XAUUSD Daily Analysis
XAUUSD (1283.16): Gold prices posted a 4-day low yesterday closing at 1281.85 as the downside target of the bearish divergence at 1275 remains in sight. Short term resistance at 1295 - 1292 could be tested if price rebounds to the upside without seeking support off the 1275 handle. The gains are likely to remain limited at this resistance level for the time being. To the downside, gold prices could see a possible reversal around the 1275 handle with another leg in the retest likely to send gold prices back towards the 1300 handle.