FOMC Meeting Minutes Next
The US dollar has been lightly sold over the European session so far today. Following on from losses seen yesterday, the USD index had posted a mild recovery overnight. Today, however, it has since come back under selling pressure. Markets are awaiting the FOMC meeting minutes tonight. While the Fed cut rates last time around, Powell downplayed the prospect of further easing. It will be interesting to see how much discussion there actually was. USD index trades 98.11 last.
EUR Still Capped by 1.1112
EURUSD has been relatively muted today, despite the weakness in USD. Price is still capped by the 1.1112 level for now following a break below the level last week. To the downside, the next key level to watch is the 1.1025 zone. Flows are expected to remain quiet with no key eurozone data today.
Brexit Drama Weighs on GBP
GBPUSD is trading in the red today so far also. Ongoing Brexit uncertainty has seen GBPUSD glued to the bottom of its bearish channel over recent weeks. The prospect of a no-deal Brexit is becoming more of a reality with each passing day, putting the risk of a break below 1.20 into sharper focus.
SPX500 Trades Higher
Risk assets have had a better day today with the SPX500 trading higher over the European morning. Traders remain optimistic regarding the ongoing US/China trade negotiations, despite the various risks attached to the situation. SPX500 trades 2917.18 last having recovered most of yesterday’s losses at this point.
Safe Havens Down on Risk Recovery
Safe havens have seen a little selling today in light of the recovery in risk appetite. Both gold and JPY have been lower, despite a weaker USD. XAUUSD trades 1500.66 for now, still sitting off recent highs posted just above the 1522.75 level, which capped the recent rally. USDJPY is a little higher today, at 106.43 last. However, for now, remains trapped in a block of consolidation below the 106.77 level which remains the key topside level to watch.
Crude Breaking Trend Line
Oil prices have been higher again today as the general improvement in risk appetite has been accompanied by better industry reporting. The API report yesterday showed an unexpected drawdown in US crude stores. The market now waits for the headline EIA report, released later today, to confirm the movement. Crude trades 56.57 last with price now trading above the bearish trend line from July highs.
Commodity Currencies Recover
USDCAD has been a little softer today in light of the recovery in risk appetite and higher oil prices, which have both helped CAD. The FOMC meeting minutes later today have the potential to weigh on USD further putting USDCAD at risk of a break back below the 1.3300 level.
AUDUSD is in the green today also, though price action remains tightly congested in the current block which has formed around the .6758 level support. The market is highly driven by developments in the US/China trade story which poses heavy two-way risk.