U.S. dollar attempts to post a recovery amid a slow trading day

The U.S. dollar is attempting to post some gains to build up from Friday's reversal. Price action has formed an inside bar among EURUSD and USDJPY which could indicate a potential breakout trading that could establish the near-term direction of prices

The markets are looking to a quiet day of trading as the U.S. session is light on account of Presidents Day. The Economic calendar is quiet for the most part with only German PPI (expected 0.3% m/m) and the UK's industrial order expectations due over the European trading session. Canada's wholesale sales figures are expected later in the day followed by the Eurozone consumer confidence.

EURUSD intra-day analysis

EURUSD (1.0615): EURUSD's reversal on Friday saw prices breaking down below 1.0644 by the end of the day. Although this morning's price action is a bit bullish, EURUSD could be seen testing 1.0600 here support is likely to be found. A bounce of the 1.0600 support could signal a continuation to the upside targeting 1.0700 followed by a move towards 1.0800. Alternately, failure to establish support at 1.0600 could mean further decline in prices as EURUSD could slide towards 1.05550 support.

XAUUSD intra-day analysis

XAUUSD (1233.88): Gold prices were seen retesting 1241 resistance last week, but failure to break out higher has signaled a near-term push lower. A breakdown below 1235.50 could signal near-term declines as gold prices could be seen testing the lower support once again at 1220.00 - 1217, which was briefly tested last week and was met with strong rejection at these levels. Price action on the 4-hour chart also shows a possible double top pattern being formed which could mean that a breakdown below 1220 could signal further declines towards 1200.00 at the very least.

USDJPY intra-day analysis

USDJPY (113.12): USDJPY is looking to post a reversal after falling to 113.00 support last week. The rebound from the support zone at 113.00 - 112.50 could signal a short-term move to the upside in USDJPY which could see prices potentially rally back to target 115.36. The 4-hour chart also shows a hidden bullish divergence at the current level, meaning that USDJPY could see some consolidation within 113.00 - 112.50 following which an upside move can be expected. This bullish bias will be invalidated on a close below 112.50.