US dollar slips on soft inflation figures: Quiet day ahead

The US dollar fell sharply on Friday after data showed that consumer price index rose 0.2% on a month over month basis in April. This was a modest improvement following the 0.3% decline in March. Economists polled were expecting inflation to rise 0.3% instead.

Retail sales numbers were also soft, rising 0.4%, less than the forecasts of 0.6% increase. March's retail sales numbers were revised from -0.2% to 0.1%.

The US dollar was seen trading subdued on today's open. Economic data released so far showed China's industrial production rise 6.5%, less than the expected 7.0%, while retail sales rose 10.7%, slightly below forecasts of 10.8%.

Later in the day, the NY Fed's Empire State Manufacturing index is coming up with economists’ expecting the manufacturing activity in the New York area to rise to 7.2 after slipping to 5.2 the month before. Manufacturing activity in the New York area was seen weakening for the past two consecutive months.

EURUSD intraday analysis

EURUSD (1.0930): EURUSD brushed past the 1.0900 price level on Friday, and further gains are likely to come by if support is seen being established at 1.0900. This would potentially keep the upside target towards 1.1000 in sight. However, a continuation without a pullback could see EURUSD test 1.0950 where resistance could be formed. This would mark a pullback from the recent declines and could signal a continuation towards 1.0850 followed by 1.0750.

GBPUSD intraday analysis

GBPUSD (1.2905): The British pound gapped lower this morning, opening at 1.2801 with price posting strong gains, currently trading at 1.2899 and recovering the past losses. On the 4-hour chart, the test to 1.2800 comes as a retest of the upside break-out from the bullish flag pattern that emerged three weeks ago. With prices testing 1.2900 level, further upside could be seen coming but watch for the familiar resistance at 1.2988 - 1.2965.

XAUUSD intraday analysis

XAUUSD (1230.86): Gold prices have been posting a modest recovery for the past three days after the price fell to a two month low at 1214.24. The upside recovery could continue if gold posts a higher low on the 4-hour chart. The downside correction could see price retest the support at 1221.47 where a higher low could confirm the upside in price. Resistance is seen coming in at 1250.00, although a continuation to the upside could see further gains pushing gold prices to 1263.00 and 1274.00.