Weekly Technical Analysis For September 9th to 12th, 2019
Keep Your Eye On The ECB Rate Decision
The U.S. economy created fewer jobs than expected in August. The US Nonfarm payrolls increased 130K in versus 160K expected. The unemployment rate remained steady at 3.7%. Average hourly earnings rose 0.4% monthly and 3.2% from the year-ago period. The soft employment figures keep the Federal Reserve on track to cut interest rates later this month.
US Inflation numbers and ECB Rate Decision will be the main market focus in the upcoming week.
On average, economists expect that the US CPI rose 0.1% in August. The year-on-year rate of inflation is expected to stay at 1.8%. The core CPI, which excludes food and energy prices, is expected to have risen 0.2%. US consumer price inflation has been tame in recent years and consistently below the Federal Reserve's 2% target.
Additionally, the US Commerce Department will report August retail sales numbers on Friday. Economists predict that retail sales rose 0.2% last month. On the other hand, Core retail sales, which exclude autos, are expected to have risen 0.1%.
In the Eurozone area, the ECB will announce its policy decision on Thursday. Weaker inflation in the eurozone and downside risks from global trade issues amid rising expectations the ECB will cut interest rates further below zero and consider fresh asset purchases.
Most economists expect a 20 basis point deposit rate cut, more generous TLTRO conditions and €30 million per month of quantitative easing. The announcement will be followed by President Mario Draghi's news conference and his statements about inflation will be significant. The meeting will bring new information about the ECB's policy.
The EURUSD upward movement was paused at the daily resistance level of 1.1052. As long as the price stays below 1.1052 on a daily basis, we will see 1.0979 as a support level again. On the upside, if the pair goes beyond 1.1052, the next resistance level will be placed at 1.1114.
Support: 1.0979 - 1.0837
Resistance: 1.1052 - 1.1114 - 1.1165
he GBPUSD pair showed an upward movement last week after UK parliamentary defeat for Prime Minister Boris Johnson. The British parliament voted to prevent Johnson from taking Britain out of the European Union without a deal on Oct. 31 but rejected his first bid to call a snap election two weeks before the scheduled exit.
Looking ahead, UK Manufacturing Production for June will be announced on Monday. Data is expected to drop to -0.1% in July.
Moreover, the UK Office for National Statistics will publish the monthly jobs report on Tuesday and it will be watched more for what it says about wages than hiring. The UK Unemployment Rate is expected to stay at 3.9% in July, the same as the previous reading.
The GBPUSD pair closed last week above the key support level of 1.2286. As long as the price stays above 1.2286 on a four hourly basis, we will see the resistance level at 1.2364. On the other hand, if the price breaks down below 1.2286, the next support level will be at 1.2205.
Support: 1.2286 - 1.2205 - 1.2110
Resistance: 1.2364 - 1.2428 - 1.2502
Focus on the daily resistance level of 106.98. In order for the rise to gain more momentum, it needs to break out and stay above 106. 89 on a four hourly basis. Should this occur, we will watch the 107.22 resistance level. Otherwise, the support levels can be seen at 106.72 and 106.41.
Support: 106.72 - 106.41 - 106.15
Resistance: 106.98 - 107.22 - 107.52
The Gold price pulled back from the 1555 daily resistance level and closed last week below the 1509 key level. As long as the price stays below 1509, on a four hourly basis, we will follow 1492 as a daily support level. On the other hand, if the price goes beyond 1509, the next resistance level is holding at 1524.
Support: 1492 - 1478 - 1466
Resistance: 1509 - 1524 - 1540
08 Sep 19 (Sun)
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