The US dollar continued to remain weak with price action yesterday showing the greenback extending the declines. This kept the EUR/USD biased to the upside, although price action was largely muted. Investors will be looking to the "Super Thursday" tomorrow where the ECB meeting alongside the UK elections will impact the markets.
The uncertainty is evident by the fact that the euro and the British pound remains subdued. On the economic front, the economic calendar today is light with the early Asian session seeing the release of the quarterly GDP report from Australia.
Official data showed that the Australian GDP expanded 0.3% on a quarterly basis, slightly better than expected, but weakened, following the 1.1% Q4 2016 economic expansion
EURUSD intraday analysis
EURUSD (1.1260): EURUSD was bullish yesterday, but price action continues to be maintained within Friday’s range. With price action supported above 1.1245, the bias remains to the upside. The current decline could see EURUSD slipping back to test this support as investors are likely to book profits ahead of the ECB meeting tomorrow. On the 4-hour chart, the bearish divergence is building up, and this warrants caution as price action could risk invalidating the bullish flag pattern on the daily chart. A decline below 1.1245 could signal a test towards 1.1200 support level.
GBPUSD intraday analysis
GBPUSD (1.2897): The British pound closed with a doji yesterday, but price action remained broadly flat with the bullish momentum being maintained above 1.2800 support level. A decline to the downside could signal a continuation on a break down below this support. On the 4-hour chart, we can see price testing the minor resistance level at 1.2937 with a doji close. This potentially suggests that GBPUSD could test 1.2800 in the event of a downside move. Therefore, the possible decline to 1.2600 which marks the downside target in the head and shoulders pattern remains.
USDJPY intraday analysis
USDJPY (109.53):The USDJPY extended the declines, falling to a fresh two-month low. However, price action is likely to remain subdued with the longer-term support zone seen at 109.50 – 109.25. Currently, we notice price action consolidating at this level. However, unless a higher low is formed to the upside, USDJPY remains biased lower with the potential to test 108.30 support level. To the upside, a retracement could, however, keep USDJPY recover to retest 110.79 where resistance level is likely to be developed.
