The US dollar index was seen trading lower towards Wednesday’s close. These declines come following a day after the USD posted strong gains. The subdued trading comes as the economic calendar has been quiet for the most part this week. The FOMC meeting is due in a week’s time but the blackout period means that there isn’t much news to fall back upon.
Euro Gains as the Dollar Retreats
The euro currency has been posting some modest gains against the dollar on Wednesday. This comes ahead of today’s ECB meeting. It will be the last monetary policy meeting under the leadership of ECB President Mario Draghi. Economic data from the Eurozone was quiet.
Can the EURUSD Maintain the Rebound?
The currency pair rebounds following a day of declines. However, we expect that the upside is limited for the moment. EURUSD could post a lower high which will confirm the downside. The currency pair will likely test the lower support at 1.1075–1.1062 region, unless the previously two-year high is breached.
Sterling Pares Losses as Brexit Delay likely
The UK Brexit saga continues. On Tuesday, British lawmakers passed the Brexit deal. But the deal failed to pass through before the October 31st deadline. The EU is currently mulling over the extension. Speculation is rife that Brexit could be postponed to January 2020.
GBPUSD Gains to Remain Limited
The upside bounce in GBPUSD comes as the currency pair fell to the support area of 1.2865. The sideways range is likely to prevail within the 1.2865–1.2960 region. As long as this level holds, we expect the bias to be to the downside. The lower support at 1.2582 is the next target. Alternately, if GBPUSD breaks out above the resistance area, then we anticipate further gains.
Gold Posts Gains on Modest Safe-Haven Demand
Gold prices posted meager gains on Wednesday amid some flows into safe-haven assets. This comes ahead of the Fed meeting next week. Expectations for a rate cut remains high. But a disappointment from the Fed is also possible. Equity markets remained steady as investors wait for more clues.
XAUUSD Consolidates into an Ascending Triangle Pattern
The precious metal is seen establishing resistance at 1495 level. Amid this resistance, the commodity is posting higher highs. Therefore, a strong breakout above 1495 will trigger the upside bias, Gold could rise to at least 1511.50 level in the short term. The upside failure will, of course, see the bias shift back to the initial support at 1462.