The US dollar closed on a bearish note yesterday after the FOMC meeting minutes failed to support the greenback. The Fed minutes showed that members supported the view to tighten monetary policy and felt that it was appropriate to cut back on the Fed's $4.5 trillion securities holdings this year.
FOMC officials also expressed concerns on the weak patch of numbers in the first quarter as the US GDP slowed. The weaker US dollar sent gold and euro making up for the declines from earlier this week.
The euro managed to hold on to the gains although ECB officials speaking at various events said that there wouldn't be any shift in the ECB's monetary policies despite mounting pressure. ECB officials who spoke included the president, Mario Draghi, and other members including Vitor Constancio and Peter Praet.
Looking ahead, the economic data today will focus on the UK's second estimates for the first quarter GDP which is expected to show no changes, confirming that growth expanded at a pace of 0.3% on the quarter.
OPEC leaders will be holding their meeting in Vienna today with a focus on an extension to the production cuts that was agreed upon in last November.
EUR/USD intraday analysis
EUR/USD (1.1238):The EUR/USD managed to reclaim the $1.1200 handle after briefly slipping below the level. Price action is currently bullish as the common currency is seen testing this week's 6-month highs that were posted earlier in the week. Price action remains neutral for the moment, with price gains coming on a break out above 1.1262, while a failure to push higher could potentially keep the downside bias intact towards 1.1100 support level. A break down below 1.1100 will trigger further downside in price.
GBP/USD intraday analysis
GBPUSD (1.2983):GBPUSD continues to stay flat near 1.3000 with price action caught within the tight range established from last Thursday. A breakout from the highs or lows at 1.3047 or 1.2888 will trigger further continuation in price. The overall bias remains to the downside, however, for a test towards 1.2800, where support needs to be more firmly tested. For the near term, theprice is likely to continue to push higher and test 1.3000 resistance, following which we could expect to see some downside in the British pound.
EURCAD daily analysis
EUR/CAD (1.5056):The EUR/CAD closed bearish yesterday following the minor consolidation that was formed at 1.5147 and 1.5102. The breakout from the rising wedge pattern signals a continuation to the downside, although EUR/CAD is looking to test the breakout level. Yesterday, the Bank of Canada (BoC) left interest rates unchanged with some viewing the BoC's statement as being neutral despite positive developments in the economy. However, the BoC's statement was quite upbeat compared to the previous meeting.