The Federal Reserve Bank held its monetary policy meeting yesterday. As widely expected, the central bank cut the Fed funds rate by a quarter basis point to 1.50% – 1.75%.
In its widely watched monetary policy statement, the central bank removed reference to future rate cuts. The statement indicates that the central bank will like pause its rate cut cycle. There were also two dissenting votes from Esther George and Eric Rosengren.
French GDP Rises Slightly Better than Forecasts
The flash GDP estimates for France, covering the third quarter were slightly better. The GDP estimates saw a 0.3% increase on the quarter ending September 2019. This was above the forecasts of a. 0.2% increase.
Germany’s preliminary inflation data also saw a modest 0.1% increase on the month beating estimates of no change. Today, the flash GDP and CPI estimates for the eurozone will be coming out.
Can the EURUSD Continue its Gains?
The euro is holding on to the gains after bouncing off the support region of 1.1075. Price action will need to break past the initial highs of 1.1150 to confirm further upside.
This will see the EURUSD testing the previous highs of 1.1177. Still, the EURUSD could remain caught within the range. Unless we see a breakout above 1.1177, the momentum could slow.
Oil Prices Slip as Inventories Show Build-Up
Crude oil prices were trading weaker on Wednesday after the weekly oil inventory report. Data from the Energy Information Administration saw commercial crude oil stockpiles rising 5.7 million barrels.
This was well above the estimates of a 0.5 million increase. The build-up in inventory comes following the previous week which saw an unexpected drawdown.
WTI Crude Oil Could Rebound
Oil prices fell to the support area of 54.50 region. This marks a retest of the previously held resistance level for support. As long as price holds above this level, there is scope for an upside rebound. The upper resistance level at 57.87 – 57.64 remains the target. Watch the Stochastics oscillator indicating a bullish divergence.
Gold Advances on Weaker US GDP
The precious metal was seen notching gains ahead of the Fed meeting on Wednesday. The gains in gold prices came as US preliminary estimates saw a weaker print.
The US economy grew by 1.9% in the three months ending September. This was slightly better than the 1.6% increase that was forecast.
XAUUSD Remains Directionless
The precious metal posted some modest gains. But the weakening momentum will likely keep the precious metal directionless for the moment. Price action is approaching the previous minor resistance level that broke at 1495. With the confluence of both this horizontal resistance and the trend line, XAUUSD gains will be limited for now.