Article by: ETO Markets
The USD selling tendency is still there, but the safe-haven gold price is capped at the $2,040 supply zone due to the general risk-on sentiment. In anticipation of the most recent monetary policy announcements from the European Central Bank, the Bank of England, and the Swiss National Bank later today, traders choose to remain on the sidelines. Aside from this, the monthly US Retail Sales data release could provide the metal some momentum. However, the underlying environment is conducive to the possibility of an additional upward advance.
Following a two-day meeting, the Fed is expected to make its policy announcement later in the US session. Nonetheless, attention will continue to be focused on the revised economic forecasts and Fed Chair Jerome Powell's news conference following the meeting. Ahead of the major Bank of Japan monetary policy meeting next week, investors will be watching for clues regarding the Fed's future rate path. This will have a significant impact on the USD price dynamics and provide the USD/JPY pair some much-needed momentum.
The European Central Bank will make its announcement. It is anticipated that interest rates will stay unchanged for the second straight meeting. No decisions are anticipated at this time, but talks about the Minimum Reserve Requirement and PEPP reinvestment are likely to occur. There will be a news conference led by ECB President Christine Lagarde and the release of updated staff macroeconomic estimates. Forecasts for inflation and growth are expected to be lowered. The conference may have little effect on the market if nothing unexpected comes out of it.
A significant drop in the US dollar helped the EUR/USD pair break over … and climb toward the … region. Further gains might be triggered by a bullish breakout over that level, with … serving as the next barrier.
The Relative Strength Index is in overbought territory on the 4-hour chart. In the event of a correction, … is anticipated to provide support. The uptrend line and the 20-SMA are included in the slide below …, which would only cause the short-term outlook to become negative.
Investors now appear to be convinced that the Bank of Japan is not going to quickly abandon negative interest rates. This is thought to be a major contributing element to the safe-haven JPY's relative underperformance compared to its US counterpart, combined with the general positive market sentiment.
The resistance is likely to be encountered on any further upward move close to the round number of ... The 200-HMA, which is currently in the … range, is keenly monitored by this and could potentially pave the way for further rises if it is convincingly cleared.
Conversely, weakness below the psychological level of … may still draw some buyers in the vicinity of the … region, or the 38.2% Fibonacci level. Bearish traders will be sparked by a strong breach below, which would push the USD/JPY pair closer to the 50% Fibonacci support level around the … round number and ultimately to the 61.8% Fibonacci zone at ...
