US dollar eases as euro jumps on better GDP data

The US dollar was seen trading weaker yesterday. This came despite the US producer price index rising 0.4% on the headline and 0.4% on the core, beating the forecasts. Earlier in the day, the European session saw the release of the final German GDP figures. Surprisingly, data showed that German GDP advanced 0.8% on the quarter ending September. The euro posted strong gains rising back above the 1.1700 handle by yesterday's close.

The UK's inflation report released yesterday showed that consumer prices stabilizing, rising at a pace of 3.0%. This was the same pace of increase as seen in the month before and was slightly below forecasts.

Looking ahead, economic data from the UK continues with the release of the monthly jobs report. The UK's unemployment rate is expected to remain steady at 4.3% while wage growth is expected to weaken somewhat. In the US trading session, the monthly inflation figures will be coming out that could be the major highlight of the day. This is followed by the retail sales numbers.

EURUSD intraday analysis

EURUSD (1.1792): The euro posted strong gains yesterday, rising over 1% on the day. The gains came as the single currency was seen steadily rising over the past few sessions. Yesterday's GDP data from Germany showed an upbeat print of 0.8%. This helped the euro to break past the resistance level of 1.1688 - 1.1710. The break of the falling trend line marks some upside bias in the EURUSD. In the near term, we expect the pullbacks to be limited to the support level that could be established near 1.1688 - 1.1710 level. The new range of 1.1822 - 1.1710 is likely to be maintained in the near term. However, watch for a potential break down below the support level which could suggest a continuation to the downside.

USDJPY intraday analysis

USDJPY (113.17): The USDJPY was seen closing on a bearish note yesterday. Price action is weaker in the early Asian trading session as price approaches the short term support level at 113.00. The initial decline to this level was met with a strong pullback. However, we expect a firmer test of support at this level. A break down below 113.00 could send the USDJPY lower towards the next main support level at 112.04. In the near term, the range at the current levels could be seen continuing, but this could change in the event of a break down below 113.00.

XAUUSD intraday analysis

XAUUSD (1281.17): Gold prices posted a bounce back after price briefly slipped below the support level at 1274.70. The strong gains in gold prices saw price rising just close to the main resistance level of 1285 level. A breakout above 1285.00 is requiredin order for gold to continue posting further gains. However, weakening momentum could keep gold prices hovering near the resistance and the support levels. The sideways range below 1285.00 could be seen nearing completion on a potential upside breakout in price. The next main target for gold will come in at 1320.00 upon a successful breakout.