Gold and yen maintain gains. BoC meeting eyed

Daily Forex Market Preview, 12/04/2017

The U.S. dollar remained mixed but was seen trading weaker against the safe haven gold and the Japanese yen, while the AUD and NZD remained week in a strong risk aversion in the markets.

The British pound managed to make some strong gains on the back of a modestly better than expected inflation report. However, today's unemployment report will be crucial as a failure for the wages to catch up with inflation could potentially spell downside risks for the UK's economy. BoE Governor, Mark Carney is also expected to speak today.

In the North American trading session, the Bank of Canada's monetary policy meeting is on the cards. No changes are expected to interest rates which are tipped to remain steady at 0.50%. The Canadian dollar is seen trading weaker during the Asian trading session ahead of this event later today.

EURUSD intra-day analysis

EURUSD (1.0601): EURUSD closed bullish for a second day after falling to a one-month low on Monday as price closed above 1.0600. This could potentially mark a short term retracement to the declines which could send the single currency to test the resistance levels at 1.0700 followed by a test to 1.0800. On the 4-hour chart, short term resistance is seen at 1.0635, which will be the next obstacle that has to be cleared for a confirmation of a sustained move to the upside towards 1.0700.

Alternately, failure to break out above 1.0635 and the support failure at 1.0600 could signal a break down in prices towards 1.0500.

GBPUSD intra-day analysis

GBPUSD (1.2483): The British pound logged some gains yesterday for the second consecutive day. The gains came on a better than expected print on headline inflation which rose 2.3%, beating estimates of 2.2%. However, the increase in inflation was seen to rise at the same pace as in February. GBPUSD has been testing the support at 1.2400 multiple times with prices posting lower highs.

Thus a break down below 1.2400 could signal further declines to the downside as prices are likely to test the lower support at 1.2200. However, given the current consolidation above the falling trend line, we can expect to see some upside movement towards 1.2550.

EURCAD daily analysis

EURCAD (1.4131): The EURCAD closed with a doji looking pattern yesterday coming off nearly three consecutive days of declines. This indecision candlestick signals a possible correction to the declines. Resistance at 1.4278 will be tested in the near term if prices continue to push higher above 1.4175. We can expect EURCAD to remain range bound within these levels in the near term, while the longer term bias remains to the downside, targeting the support at 1.3900.

Source:www.orbex.com