U.S. retail sales surges in July

The U.S. dollar was seen trading a bit subdued on Wednesday. However, price action was seen staying firm for the most part. Economic data over the day saw the Australia wage price index. For the second quarter, wages grew at a pace of 0.6% matching estimates.

In the UK, inflation was seen rising for the first time this year. Headline inflation rate rose to 2.5% during July matching estimates. Core inflation rate was seen rising 1.9%, the same pace as the month before.

The NY trading session saw the U.S. retail sales rising 0.5% on the headline and 0.6% on the core. Both the reports beat market expectations. Manufacturing activity as measured by the Empire State manufacturing index rose to 25.6.

Looking ahead, the economic calendar today will see the release of the UK's retail sales report. Economists forecast headline retail sales to rise 0.5% in July.

In the NY trading session, building permits and housing starts reports are due.

EURUSD intraday analysis

EURUSD (1.1382): The EURUSD currency pair extended the declines touching down to fresh intraday lows of 1.1301. Price action managed to recover slightly closing with a doji near the lows. On the 4-hour chart, the EURUSD currency pair was seen attempting to trade back above the 1.1366 level. As this level served as a brief support, the rebound off 1.1366 could signal a potential correction in the near term. A retest of 1.1366 could confirm the upside bias as the EURUSD could be seen pushing higher to test 1.1540 level where resistance could be established.

USDJPY intraday analysis

USDJPY (110.78): The USDJPY currency pair was bearish on Wednesday with price action closing with an outside bar on the day. The declines send the currency pair plunging below the support level of 111.13 - 110.85 level. Failure to hold the declines at this level could trigger further losses in store. The USDJPY currency pair could be seen targeting the 109.45 level of support as a result. However, the declines are expected to be gradual with further consolidation likely to take place near the support/resistance level of 111.13 - 110.85.

XAUUSD intraday analysis

XAUUSD (1172.34): Gold prices were seen declining further as prices touched down to fresh lows of 1160 earlier this morning. The sharp pullback off the lows could trigger a short-term rebound in prices. However, with the previously held support level at 1211.50 now likely to turn to resistance, the gains could be limited. To the downside, we expect gold prices to consolidate around the 1160 - 1150 region in the short term.