US inflation expected to rise in September

The US dollar was trading rather mixed, coming out strongly against the euro was seen trading rather flat against the yen and the British pound. Economic data released yesterday showed that the weekly unemployment claims fell sharply, rising just 243k against estimates of 251k while producer price index data rose 0.4% on the month as expected. The PPI data raised expectations that consumer prices could also rise in the near term.

FOMC members Powell and Brainard along with ECB President Mario Draghi gave their views on monetary policy. The ECB President sounded cautious as he said that the central bank would remain accommodative.

Looking ahead, the main focus for today will be the US consumer prices index data for the month of September. According to the economists polled, headline CPI is expected to rise 0.6% on the month and rise above 2% on a year over year basis. Core CPI is expected to rise 0.2% on the month, maintaining a steady pace of gains. US retail sales numbers are also expected with forecasts showing a bullish print.

EURUSD intraday analysis

EURUSD (1.1848): The EURUSD was bearish yesterday but with price action rallying above the support area of 1.1843 - 1.1822 the declines are likely to be limited. In the overnight session, the EURUSD was seen falling back into the support level and currently attempting to push higher. A convincing close above this support area is required to build confidence to the upside. Price action could be targeting the unfilled gap at 1.19448 as a result. However, in the event of price failing to hold the gains, we could expect the downside risks building up. Lower support at 1.1720 comes back into focus with a potential for EURUSD to post further declines on a break down below 1.1688.

USDJPY intraday analysis

USDJPY (112.09): The USDJPY has been trending lower following the brief consolidation seen near the falling trend line. Price action has been edging lower after trading flat within the resistance level of 113.00 and support level of 111.74. We expect this range to be maintained in the near term with USDJPY likely to see a modest bounce off the support. However, in the event of a break down below 111.74, we can expect further declines to push USDJPY lower towards the support level of 111.00 - 110.88 region where the next main support level resides.

XAUUSD intraday analysis

XAUUSD (1296.37): Gold prices are seen attempting to rally after clearing the resistance level of 1290 - 1288. Further upside in the price action could keep gold prices on track to test the next major resistance level that comes in at 1324 - 1320 region. However, the recent gains in gold prices off the lower support at 12262 signals a possible ascending wedge pattern. A potential breakout from this level, below 1288 - 1290 could signal a downside breakdown in prices. This will bring gold prices back to the 1275 - 1273 support and eventually towards 1262 support to complete the downside correction.