The US dollar, which was trading subdued the past few days held steady ahead of the FOMC meeting today. The Fed will be releasing its economic projections and dot plot summary alongside the press conference.
The US factory orders report released on Tuesday showed a 0.1% increase in January while durable goods orders rose 0.3% in January. A minor risk-off sentiment continues in the markets, with US bonds prices dipping lower.
EURUSD Firm on Dollar Weakness
The euro currency gained 0.13% on the day despite a panel of economists lowering Germany’s growth forecasts. Expectations are for Germany’s growth to rise by 0.8% for 2019, compared to 1.5% forecast previously. Experts cited Brexit and trade disputes as the main risks. However, the German ZEW Economic sentiment index released yesterday showed that optimism was back. This came as the index rose to the highest level of -3.3 this year after falling to -13.4 last month.
Will EURUSD Continue Its Winning Streak?
The common currency has managed to post gains for the past three sessions. However, momentum is easing as the currency pair is likely to fall back to 1.1329 to establish support once again. As long as it does not breach this level, EURUSD could attempt to break out higher once again. The main resistance at 1.1390 – 1.1400 could be reached in the near term.
USDJPY Closes Flat on The Day
The USDJPY was seen trading flat on Tuesday with the yen advancing just 0.04% against the greenback. The sentiment continues to remain in check with the Fed and Brexit themes keeping the risk appetite on the back foot. The BoJ’s monetary policy minutes were released earlier today which has helped the greenback post modest gains during the Asian trading session.
Will USDJPY Breakout From The Consolidation?
The currency pair has been trading rather flat above the 111.40 level of support after previously reaching highs of 112.11. The USD got a boost earlier today from the BoJ’s minutes. However, the USDJPY is yet to post any meaningful highs. The resistance level of 111.98 will remain the key upside target in the short term. A breakout above this level would be needed for the currency pair to test the next main level of 112.51.
XAUUSD Maintains Three-Day Winning Streak
The precious metal continued to post some modest gains, rising 0.21% on the day amid the prevailing risk-off sentiment. Brexit developments continue to remain in the forefront with the UK seeking to extend the Article 50 extension from March 29 to end of June.
Can Gold Continue the Upside?
The XAUUSD’s gains have been somewhat modest. Price action hasn’t quite cleared the resistance level of 1306. And, despite an intraday breakout, price settled back below this level. This possibly indicates some weakness around this level. A bearish close today could send gold prices lower to retest the support at 1284.63. While to the upside, the resistance level at 1320 – 1321 remains within reach.