Summary:
- Today we will have major central bank meetings, including monetary policy decisions both from Bank of Japan and European Central Bank, and watch their impacts on markets.
- In today’s earlier Asian session (20 July), AUD/USD fell back on the release of the bad AU employment data after shooting up.
Markets whipsawed Wednesday amid lack of major economic reports and fundamental events. However, we will see latest monetary policy decisions both from Japan and euro area and Mario Draghi’s comments on ECB press conference could bring volatilities back to markets while influence the euro and USD’s medium-term direction.
Technical
The Dollar Index (DXY) mostly moved in a choppy session Wednesday. Its recent rally on the 1 hour chart stalled at declining long term moving averages which were still diverging with slight shrinking, then price action on the DXY traded sideways, potentially pulled back in the short term. Its short term moving averages flattened just below its long term moving averages, indicating that short-term trend faces tests and could change. Its upside resistance is at H1-period EMA60 and downside support is at this week’s weekly low.
Non-U.S. currencies
The euro kept falling back in a choppy trading and found some support at H1-period EMA60, however, the level gave away early this morning. The single currency could remain volatile ahead of ECB decisions. The sterling trapped and whipsawed throughout yesterday, watching breakouts direction in the short term. The commodity currency Aussie remained firm with slightly slower pace of rising, however, it fell back on the release of the bad AU employment data this morning.
Precious metals
Gold traded and whipsawed at relative highs after price rallied recently. Gold was no doubt supported by its long term moving averages which kept diverging with bullish bias and touched by its short term moving averages twice. Wait and see if its short term moving averages could move below its long term moving averages and await ECB policy decisions and statement.
Disclaimer: The views and opinions expressed in this article are those of the authors and for the purpose of reference only, and shall not be relied upon by investors in making any trading decisions.