The US dollar was seen nearing a one-week high earlier today. The gains in the greenback come as investors expect the Fed to lower rates by just 25bps. This comes against the initial expectations of a larger rate cut. Meanwhile, BoJ Governor, Kuroda, in a speech earlier today hinted at taking additional easing measures.
Euro Drops to a 5-Week Low
The common currency extended declines earlier today which saw price dropping to a five-week low. The declines in EURUSD comes as the common currency is also impacted by the Brexit events. The UK is expected to announce Boris Johnson as the next Prime minister of the UK.
Will EURUSD Stabilize Near the Support?
The declines in the currency pair have sent EURUSD to test the support level at 1.1188. Considering that this is a minor support, we could expect to see a possible breakdown lower. However, if a rebound off this support level occurs, then we could see a possible sideways pattern emerging. EURUSD could trade flat within 1.1250 and 1.1185 levels in the short term.
WTI Crude Oil Trades Flat, Awaiting API Data
Crude oil prices were largely flat on Monday, marking a second consecutive day. While the tensions surrounding Iran seizing the British oil tanker continues, investors brushed aside the tensions. The American Petroleum Institute will be releasing its weekly crude oil inventory report today which is likely to move the oil markets later in the day.
Crude Oil Likely to Maintain the Sideways Range
Oil prices have stabilized after breaking past the support area of 57.50. However, the declines below this level haven’t seen oil testing the lower end of the range at 54.42. We expect this sideways range to continue in the short term. Today’s API report could move the oil markets and the bias remains to the downside for now. A breakdown below 54.42 could spell further declines down to the 50.00.
Gold Extends Declines as Investors Await Cues
The precious metal was seen trading rather muted on Monday but nonetheless, it closed in the red. In the early Asian trading session, gold prices were seen resuming the declines the momentum accelerated. Investors await two crucial central bank meetings that include the ECB’s monetary policy meeting this Wednesday and the FOMC meeting next week.
Has XAUUSD Formed a Top?
The precious metal’s sharp rally to the upside saw prices reversing rather quickly. Given the fact that gold slipped below the support area of 1431–1428, we expect price to post even further declines. The lower support at 1404 will be the initial target. We expect the declines to stall near this support in the short term.