UK Wages Rise Less Than Forecast; Inflation Data Eyed
ORBEX | Apr 18, 2018 05:29AM ET
The US dollar was seen trading on firmer ground yesterday amid a busy trading day. Investor appetite was seen improving across the board.
Economic data from the UK showed that the unemployment rate fell to 4.2%, which was better than the expected 4.3% level. Wage growth was, however, subdued, rising 2.8% on the month. This was below forecasts of 3.0% increase from the previous month.
Data from the United States showed that building permits increased 1.35 million which was higher than the previous month's 1.32 million.
Looking ahead, the economic calendar today will see the release of the UK's inflation data. Economists forecast that inflation will rise at the pace of 2.7%, the same pace of increase as the month before. Core CPI is expected to slightly accelerate 2.5% on the year ending March.
The Bank of Canada will be holding its monetary policy meeting today. Interest rates are expected to remain unchanged at 1.25% on the month. The central bank, however, is expected to strike a hawkish tone. Later in the day FOMC members, Quarles and Dudley are expected to speak.
New Zealand quarterly inflation data will be coming out later in the evening. Economists forecast that quarterly inflation increased 0.5% during the first quarter. This marks a slight increase from 0.1% seen in the previous quarter.
EUR/USD intra-day analysis
EUR/USD (1.2378): The EUR/USD was bearish yesterday as the currency pair failed to breakout above the resistance level established at 1.2400 . Price action was seen testing intraday highs of 1.2411 before giving up the gains. The declines, however, were met with another reversal. The common currency is now attempting to retest the resistance level once again. Unless the EUR/USD posts a breakout above 1.2385, we expect to see price action trading below the resistance level and continuing to maintain the sideways range.
GBP/USD intraday analysis
GBP/USD (1.4303): The British pound maintained strong gains on the day with the currency pair testing fresh highs of 1.4377. The 4-hour chart shows the Stochastics oscillator building up the momentum, which could signal further gains in the near term. However, unless the previous high is breached , we expect to see price action likely to correct back to the 1.4232 level of support in the near term.
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XAU/USD intraday analysis
XAU/USD (1344.71): Gold prices continued to trade sideways with the daily price action closing with a doji pattern. As long as prices remain supported above the 1336 handle, we expect to see this ranging pattern continue for the near term. The rising trend line is expected to hold any declines to the downside but a breakdown below the trend line could see gold prices extending the losses to test the lower support at 1325 level.
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