Spreads
Spreads
Spreads
Spreads
Spreads
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EUR/USD Sees Modest Decline as US Dollar Strengthens Ahead of FOMC Decision
The EUR/USD pair experienced a slight decline, falling from its peak above 1.0700 as the US Dollar gained strength due to deteriorating market sentiment and higher US yields in anticipation of the Federal Reserve’s (Fed) decision. The Eurozone Harmonized Index of Consumer Price Index showed a minor revision in annual rates, while economic data from Germany and the UK were on the horizon. However, all eyes were on the forthcoming FOMC decision, with expectations of a steady Fed Fund rate and a potential warning regarding the need for further tightening if inflation persists. The market’s direction, especially that of the US Dollar Index (DXY), hinged on the outcome of the meeting, leading to cautious anticipation among market participants.
According to technical analysis, the EUR/USD moved flat on Tuesday and is currently trading just above the middle band of the Bollinger Bands. This movement suggests the possibility of further consolidation. The Relative Strength Index (RSI) is currently at 49, indicating that the EUR/USD is in a neutral stance. (Note: the markets are waiting for today’s Fed rate decision which will create high volatility movement).
Resistance: 1.0711, 1.0759
Support: 1.0653, 1.0605
XAU/USD Stall as USD Gains Momentum Amid Inflation Concerns and Fed Speculation
On Tuesday, gold prices showed minimal movement, hovering around the $1,930 mark for XAU/USD. The US Dollar initially faced market disfavor but saw increased demand ahead of Wall Street’s opening and after the release of the Canadian Consumer Price Index (CPI), which indicated a higher-than-expected 4% YoY inflation rate for August. This global inflationary trend, coupled with surging US government bond yields, particularly the 10-year Treasury note reaching levels not seen since 2007 at 4.36%, bolstered the Greenback’s position. While the Federal Reserve’s forthcoming monetary policy announcement is widely expected to maintain the status quo, concerns loom, and Chair Jerome Powell’s words will be closely scrutinized for hints about future rate changes. Wednesday’s release of new economic projections by the Fed is expected to have a more significant impact on the market than the decision itself.
According to technical analysis, XAU/USD moved in a tight range on Tuesday and moved between the middle and upper bands of the Bollinger Bands. Currently, the price is trading slightly above the middle band with the potential for further higher movement. The Relative Strength Index (RSI) is currently at 57, indicating that the XAU/USD pair is in a neutral stance with a bullish bias. (Note: the markets are waiting for today’s Fed rate decision which will create high volatility movement).
Resistance: $1,939, $1,951
Support: $1,928, $1,915
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