Daily Technical Analysis. Wednesday , January 03
There is not much Economic Data and Events scheduled for today, therefore the risk of volatility is low.
Spain: Unemployment Change Report in November will be released at 8:00 GMT.
Switzerland: Retail Sales will be released at 8:15 GMT, followed by PMI PM at 8:30 GMT.
Germany: Unemployment Report for December will be released at 9:00 GMT.
UK: The PMI Report for the Construction Sector in Markit will be released at 9:30 GMT.
Portugal: Consumer Confidence and Business Sentiment will be released at 9:30 GMT.
United States: The Mortgage Demand Report will be released at 12:00 GMT, followed by the New York ISM Report at 14:45 GMT and the ISM Manufacturing Index at 15:00 GMT. The FOMC will issue the minutes of the meeting at 19:00 GMT.
Australia: EAG’s Service Performance Report will be released at 22:30 GMT.
The Euro fell against the Dollar during the Asian Session on Wednesday, after the positive performance of the European currency consolidated for the first time since the beginning of the week, recording the Euro’s highest level in three weeks.
Market Watchers are waiting for the Federal Reserve to release the minutes of its last meeting, which saw the Interest Rates Hike for the third time in 2017. The Euro Zone Industrial Data came in with positive numbers reflecting stable demand and global growth.
Technically, in the near term we are still waiting for a definite breach with a pivotal resistance of 1.2080 to confirm a return to the main upside direction and then a likely hit on positive targets starting at 1.2110. Nevertheless a break of the support level at 1.2040 will push the price back to the downside correction track and possibly support the 1.2000 levels.
The Pound rose for a seventh straight session against the US Dollar, its highest level since September 20, during the Asian Session on Wednesday, following Economic Developments and Data that followed yesterday’s economic outlook for Britain and the US Economy.
We have followed the RSI to reveal the Industrial PMI which showed a contraction of 56.3 versus 58.2 last November, when we saw the best performance of the index in 51 months. The current reading is therefore, worse than the analysts’ estimates indicating a shrinking to 58.0.
Technically, a rebound in the GBPUSD pair could reinforce the previous bullishness. The pair’s success in breaching near resistance levels at 1.3600 would boost optimism and push the price test to 1.3625 levels. A return below the 1.3550 support level will however, temporarily ease the bias.
The US Dollar today held back on its weakening against the major currencies and this helped push the Japanese Yen to retreat and end its rally from last week.
Asian Stocks rose today, hitting a record high as Investors returned to optimism about growth in the global economy, especially as Manufacturing Data improved around the world.
The return of selling pressures again on the USDJPY pair’s movement would consolidate the previous bearish trend. A break below the near support level at 112.25 would consolidate the pair and cause a test on the 112.00 levels alone. The return of the price above the resistance level at 112.40 however, would ease the temporary selling pressure.
The price of Gold fell during the Asian Session on Wednesday, after recording a three-month high, as demand for selling increased after recording Asian Stock Indexes record levels, reducing the demand for safe haven.
The rebound in the price of the precious metal is likely to reinforce the previous bullishness. A success in breaching near resistance levels at 1315 will enhance optimism and likely push the price test to 1320 levels. A return of prices below the 1310 support level however, would temporarily alleviate the optimism.