The U.S. dollar managed to hold its ground on Monday. Economic data was sparse. In the European trading session, the euro currency came under pressure after the German chancellor, Angela Merkel announced that she was stepping down as the head of the German Christian Democratic Party (CDU). Her announcement came after regional elections showed that the two leading parties, the CSU and the CDU fared poorly.
The NY trading session saw the U.S. personal income and spending data. As widely expected, personal spending rose 0.4%. However, personal income rose at a slower pace of just 0.2%. Meanwhile, data for the previous month was revised higher to 0.4%.
The U.S. core PCE price index data jumped 0.2% in September beating estimates of a 0.1% increase. On a year over year basis, the core PCE price index was unchanged at 2.0%.
The final trading day of the month of October will see the economic data kicking off with the flash GDP from France. Economists forecast a 0.4% rebound in the GDP for the third quarter.
German preliminary CPI data is expected to show inflating rising at a slower pace of 0.1% compared to 0.4% increase the month before.
The NY trading session is relatively quiet. The conference board’s consumer confidence data is due which is expected to show a modest dip to 136.3 compared to 138.4 previously.
EUR/USD intraday analysis
EUR/USD 4-Hour Chart
EUR/USD (1.1381): The EUR/USD currency pair continues to trend lower, but recent price action is signaling potential exhaustion to the downside in price. The next lower support is seen coming in at 1.1310 – 1.1300 region. A decline could see this support level being tested. To the upside, the 1.1435 level is likely to act as resistance and could keep a lid on the gains.
GPB/USD intraday analysis
GBP/USD (1.2806): The British pound continued to consolidate near the support level of 1.2808 level although briefly dipping below this level. The 4-hour Stochastics oscillator is seen posting a higher low indicating a potential bullish pergence. Price action will need to clear the immediate short-term resistance level of 1.2850 to confirm the upside. The previously breached support level at 1.3086 is the likely upside target in price.XAU/USD intraday analysis
XAU/USD (1227.68): Gold prices broke out from the rising wedge pattern and fell to test the initial support at 1225.35. This led to a quick rebound in price action. For the moment, gold prices are seen consolidating above this support level. A confirmed break out below this support level is needed for gold prices to extended declines to the 1207.00 region of support. To the upside, any gains are likely to be limited to the resistance level of 1238.02.