The U.S. dollar eased back strongly on Wednesday. The United States was seen making attempts to hold trade talks with China. On the economic front, data from the Labor Department showed that producer prices fell 0.1% in August unexpectedly. This was the first monthly decline since February 2017. Economists polled expected to see PPI rise 0.2% on the month.
Oil prices surged on a report from OPEC about rising demand and tighter supplies. Weekly inventory report from the EIA showed U.S. crude oil stockpiles fell 5.3 million barrels last week.
Australia's employment data released earlier today showed that the unemployment rate was steady at 5.3%. The economy added 44k jobs during August, beating estimates of a 16.5k increase.
The day ahead is expected to be busy with the BoE and the ECB meetings lined up. The Bank of England is expected to keep interest rates unchanged. The recent uptick in wage growth and monthly GDP could bring some cheer to policy-makers.
Later in the day, the European Central Bank will be holding its monetary policy meeting. No changes are expected and investors remain clued into the central bank's forward guidance on interest rates.
The U.S. consumer price index data will be coming out later today. Headline CPI is expected to rise 0.3% accelerating from 0.2% increase previously. Core CPI is expected to rise at a steady pace of 0.2%.
EUR/USD intraday analysis
EUR/USD (1.1636):The euro currency managed to post modest gains for the third consecutive day. However, price action was seen trading rather subdued. Price action on the 4-hour chart shows the EUR/USD still trading with the adjusted descending triangle pattern. With strong support established at 1.1540, we expect to see a potential upside breakout. As the common currency trades in the resistance area of 1.1656 - 1.1626, we expect a potential upside breakout above this level. However, to the downside, the EUR/USD will need to break below the strong support to push lower to 1.1418.
GBP/USD intraday analysis
GBP/USD (1.3048):The British pound was seen struggling near the double top resistance level of 1.3034. Price action managed to slightly lift off above this level. With the BoE meeting due later today, we could expect to see some volatility. The upside is likely to see GBP/USD rally toward 1.3205 level of resistance. For this, a successful retest of the current resistance level of 1.3034 will be required. Establishing support could confirm the upside bias. To the downside, there is a risk for GBP/USD to retest the support near 1.2959.
XAU/USD intraday analysis
XAU/USD (1205.67):Gold prices lifted higher on Wednesday as price action is seen posting an upside breakout. Having cleared the 1200.00 round number resistance, we could expect further gains. In the near term, gold prices could retest the breakout level before targeting the resistance level of 1219.75. To the downside, support is seen at 1197.50 which could be tested once again.