Trade Optimism Keeps USD Supported

The US dollar recovered from Monday’s decline, but price action was largely confined to the previous session’s range. Reports that China was willing to buy US agricultural products sent equity markets briefly higher, reflecting the risk sentiment.

However, overall, USD remains rather muted ahead of the ECB meeting. Economic data also picks up with the producer prices and CPI reports coming up later in the week.

Euro Holds Firm as Markets Speculate Easing

The euro held steady on Tuesday. This comes as investors speculate whether the central bank will announce its QE program at the monetary policy meeting this Thursday. Speculation is rife that the central bank could seek more time before committing to a relaunch of QE.

EURUSD Forms a Minor Double Top

The EURUSD establishes resistance near 1.1059, forming a minor double top pattern on the four-hour time frame. A breakout above this level will see the euro rising to 1.1085 as the minimum target. Further gains could push the common currency closer to the main resistance area of 1.1140. To the downside, the support at 1.1016 will remain key. A close below this support could trigger further declines.

eurusd

Sterling Steady as Boris Affirms EU Pullout on October 31st

The pound held near recent highs, even as PM Boris Johnson once again reiterated his commitment to pull out of the EU on October 31st. This comes even as lawmakers passed a last-minute law preventing a no-deal Brexit. The UK parliament is suspended for four weeks with investors waiting for further developments on Brexit.

GBPUSD Likely to Consolidate Near Support

The currency pair retreated from recent highs on a modest pullback. However, price is yet to test the support level at 1.2320. As a result, the GBPUSD downside is limited. But a break down below this support could trigger a sharper correction in the GBPUSD currency pair. To the upside, the resistance area of 1.2533 – 1.2511 remains within reach.

GBPUSD

Gold Extends to a 4-day Decline

The precious metal continued to fall, extending declines to four consecutive sessions. The precious metal is losing ground amid investor sentiment improving. Furthermore, the strong gains logged by gold previously are also due for a correction. A lack of key fundamentals over the past few days has kept price action subdued. However, with US economic data on tap later in the week as well as the ECB meeting, we expect to see some volatility in the precious metal.

XAUUSD consolidates near lower support

The precious metal is consolidating near the lower support area of 1485. Price action remains somewhat muted near this level. With gold breaking past the initial support at 1508, we expect the sideways range to continue into Thursday’s ECB announcement on monetary policy.XAUUSD

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About the Author
“John Benjamin Resident Analyst at Orbex. John has over 8 years of experience specializing in the currency markets, tracking the macroeconomic and geopolitical developments shaping the financial markets. John applies a mix of fundamental and technical analysis and has a special interest in inter-market analysis and global politics.” [space height="10"] At Orbex, we are dedicated to serving our clients responsibly with the latest innovations in forex tools and resources to assist you in trading. Please Director at Visit our site for more details.

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