EURUSD enjoyed a surge in demand over the course of the previous trading day. The shared currency saw increased bidding as market participants await the ECB’s monetary policy decision, which is scheduled during the late European trading session of today. Markets are currently pricing in a 50 basis point interest rate hike by the ECB; however, interest rate hikes could pose further pressure on a deflating European economy. In addition to a slowing economy, Europe now faces further energy price instability as the Nordstream 1 pipeline halts its supplies. The initial jobless claims figure from the U.S. is also scheduled to be released during today’s American trading session.
On the technical side, EURUSD has successfully defended our previous estimated support level of 0.9902. The short-term bounce of the pair will meet its near-term resistance at around the 0.9983 price region. RSI for the pair sits at 52, as of writing. On the 4-hour chart, EURUSD currently trades below its 50, 100, and 200-day SMA.
Resistance: 0.9902, 1.0033, 1.0055
Support: 0.9902, 0.985
Cable traded lower over the course of Wednesday’s trading. The British Pound met strong selling pressure at the start of the Asia trading session. Remarks from members of the BoE further added to the selling pressure. BoE policymakers are still debating whether a further interest rate hike is necessary and some are arguing for a more gradual rate hike in order to prevent over-tightening as the British economy continues to falter. The strong U.S. Greenback further limits any upward movement for the British Pound. Market participants will now turn their attention to the U.S. initial jobless claims figure, scheduled to be released during today’s American trading session. A worse-than-expected initial jobless claims figure could ease bets of a 75 basis point interest rate hike by the Fed and allow the British Pound some breathing room.
On the technical side, GBPUSD has touched our previously estimated support level of 1.1463 and is currently trading around that price region. The next level of support for Cable sits at around the 1.13 price region. RSI for Cable sits at 41, as of writing. On the four-hour chart, GBPUSD currently trades below its 50, 100, and 200-day SMA.
Resistance: 1.1561, 1.1854
Gold traded higher over the course of Wednesday’s trading. The non-yielding metal took advantage of a weaker Dollar and was able to find footing above the $1700 per ounce price level. The U.S. Greenback saw a broad-based sell-off as short-term treasury yields retreated below 3.3%. However, as the next FOMC nears, market participants should be aware that the Dollar-denominated and non-yielding metal could see further price depreciation. Furthermore, with the ECB slated to increase interest rates by 50 basis points, demand for the yellow metal is expected to fall even further. A return to normalcy could be on the horizon as breakthroughs in antibody research against COVID-19 have been announced by Duke University. A reverse in risk sentiment could send Gold below the $1650 price level.
On the technical side, XAUUSD has rebounded from our previously estimated support level of $1695 per ounce and is trending toward our estimated short-term resistance level of $1724 per ounce. RSI for XAUUSD sits at 51.7, as of writing. On the four-hour chart, XAUUSD currently trades below its 50, 100, and 200-day SMA.
Resistance: 1762, 1800
Support: 1688.129, 1695