Euro Maintains Gains As Catalonia Holds Back From Declaring Independence
ORBEX | Oct 11, 2017 03:49AM ET
The common currency was seen making gains yesterday. This came late in the evening as the Catalonia parliament saw the leader holding back from declaring independence .
However, CarlesPuigdemont said that the referendum held was successful but noted that the only way forward was through dialogue. The Spanish courts declared the Catalonian referendum as illegal. The speech that was given late yesterday in the Catalonian parliament was met with mixed reactions but was seen as a positive for the euro currency.
On the economic front, data from the UK showed that manufacturing production rose 0.4% on the month beating estimates of a 0.2% increase. Industrial production rose 0.2% as expected while construction output rose 0.6%.
Looking ahead, the FOMC meeting minutes will be coming out today. Investors will be expecting to see hawkish minutes being released with Fed officials likely to proceed with rate hikes in December.
EUR/USD intraday analysis
EUR/USD (1.1804):The euro maintained the gains yesterday as price action was seen rising to the initial resistance level of 1.1822 by the day's close. Currently, EUR/USD is seen declining off this resistance level, although further near-term upside could see price testing 1.1850. The rally to the resistance level marks the upside move and could see a near term pullback. A retest back to the breakout level from the descending wedge pattern is the main risk. However, a pullback could likely trigger a potential inverse head and shoulders pattern in the making. This would put EUR/USD on a bullish track towards the minimum 1.1902 and potentially up to 22 September's unfilled gap near 1.1948. In the event of a decline below 1.1720, it would invalidate this still nascent inverse head and shoulders pattern.
USD/JPY intraday analysis
USD/JPY (112.44):The USD/JPY continues to consolidate near the major falling trend line around the 113.00 levels. Price action was seen briefly retreating from this resistance level yesterday and further downside could be expected. Support at 111.74 remains within reach to the downside. However, the sideways price action could be maintained in the near term. USD/JPY will see further direction being established on a breakout above 113.00 or below 111.74.
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XAU/USD intraday analysis
XAU/USD (1287.96): Gold prices maintained strong gains yesterday as price action broke past the falling trend line and is currently seen trading in the resistance level of 1290 - 1288. We can expect to see a near-term dip but declines could be limited to the support level of 1275 - 1273 area of support. As long as this support holds, the decline to this level could signal a retest of the trend line breakout. A successful rebound off this support level will keep the bias to the upside with gold prices likely to break past the resistance level and extend gains to the next main resistance level seen at 1320 - 1324 area.
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