Daily Technical Analysis. Thursday, November 16
The single currency of the European Union (EU) region rebounded during Thursday’s Asian Session, after yesterday’s profit cut. We followed France’s release of the final reading of the Consumer Price Index, which showed a stable growth of 0.1% with little change, before we saw the release of the balance of trade, which showed a surplus to 25.0 billion Euros.
Technical reading shows that prices are trying to catch a breath after the recent strong rally. With no signs of a general upward trend change. Only breaking support levels at 1.1770 would allow prices to fall further and may test 1.1750 levels.
At the same time, a breach of near resistance levels at 1.1800 would invite buyers and possibly test the price at 1.1830 levels.
The royal currency fluctuated in a narrow, sloping range against the US Dollar on Thursday after the US Dollar tried to recover.
The UK’s Labor Market Data showed that the three-month Unemployment Rate in September was at its lowest level since 1975, unchanged from the previous reading at 4.3% in line with expectations, while the median Income Index showed slower growth to 2.1% versus 2.3% previous, exceeding expectations of 2.1%.
Technical reading shows the lack of clarity which clearly affects the pair’s trading, and in the absence of any strong signals, of a possible price break in any direction.
A break above the top of the closing price at 1.3210 or a break of the near-term price at 1.3130 would give more clarity to the expected movement which would be in the same direction as the break.
The US Dollar was able to reduce its losses against the Japanese Yen following yesterday’s US Inflation Data, which kept the US Interest Rate Hike in December unchanged, especially as Core Consumer Prices rose. Retail Sales showed resilient domestic demand with further positive reading anticipated as the holiday shopping season approaches.
Asian Stocks rose for the first time in five sessions, with Banks and Financial Firms recovering. Technology Stocks were up and Retail Stocks are recovering.
Technical reading indicates that a rebound in selling pressures will reinforce the previous downtrend. A break below the near support levels at 113.00 will consolidate the safe haven pair and possibly test 112.70 levels. The return of the price above the resistance level at 113.20 will ease the selling pressure temporarily.
Gold prices fell slightly during the Asian Trading Session on Thursday to continue the losing streak for the second day in a row, with the correction and profit-taking at the highest level in four weeks.
The lack of clarity still clearly affects the trading of the yellow metal, with no strong signs of a potential price break in either direction. A breach above the top of the close price at 1288 or a break of the near-price bottom at 1270 would give more clarity to the expected movement which would be in the same direction as the break.