Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Dollar Drops Ahead Of FOMC Meeting Minutes Today

Published 02/20/2019, 02:40 AM
Updated 08/29/2019, 07:20 AM

The U.S. dollar extended the declines for the fourth consecutive session. The drops come ahead of the Fed minutes due today. The U.S and China trade talks resume ahead of the March deadline alongside discussions with the EU officials.

On the economic front, data from the eurozone showed that the current account surplus fell to 16.2 billion euro in December. This was well below the estimates of a decline to 21.4 billion from 22.6 billion euro in November.

The German ZEW economic sentiment index showed an improvement in the sentiment. The index rose to -13.4 beating estimates of -14.1. The index rose to the highest level since the past 5-month period.

In the U.K., the ILO labor market data showed that the economy added 14.2k jobs in the three months ending December. The unemployment rate held steady at 4.0% for the second consecutive time. However, the average earnings index increased just by 3.4% below estimates of a 3.5% increase.

Regarding Brexit, the U.K. PM May should resume negotiations with the EU counterparts. This comes ahead of the February 26/27 presentation of the deal to the U.K. parliament. Meanwhile, the EU Commission President Jean-Claude Juncker said Brexit could be delayed by the EU if the U.K. requests for the delay. He said that he does not rule out an extension to the Brexit deadline until May when the EU elections are done with.

Australia’s quarterly wage price index data showed a 0.5% increase. Economists forecast a rise of 0.6% in the quarter ending December 2018. The data comes ahead of tomorrow's jobs report.

The European trading session ahead will see the German producer prices index coming out. PPI should fall by 0.2% on the month in January, slightly lesser compared to the 0.4% decline in December last year.

The economic calendar is quite sparse for the remainder of the session. The NY trading session will see the Fed’s meeting minutes coming out. The meeting minutes come under careful scrutiny from investors which covers the January meeting where interest rates stayed unchanged.

EUR/USD Intraday Analysis

EUR/USD, H4 Chart

EUR/USD (1.1342):
The EUR/USD currency pair managed to break past the resistance area of 1.1327 - 1.1309 earlier today. Price action should consolidate and potentially revisit the breached resistance level where support could establish. If a rebound off this level happens, then the euro currency could attempt to post strong gains targeting 1.1435. This marks a retest of the previously breached support level. Establishing resistance at this level could potentially keep the common currency consolidating around the current levels of support and resistance.

USD/JPY Intraday Analysis

USD/JPY, H4 Chart

USD/JPY (110.76):
The USD/JPY attempted to recover from the declines previously. Price should rebound from the temporary low formed following the rally to highs of 111.12. If price recovers from the modest pullback, we could expect the USDJPY to test the 111.21 level which would mark the completion of the breakout from the ascending triangle pattern. Alternately, to the downside, if the previous lows at 110.25 are breached, then price action could push lower. The support at 109.74 will become the next downside target for the USDJPY currency pair.

XAU/USD Intraday Analysis

Gold, H4 Chart

XAU/USD (1342.79):
Gold prices posted strong gains on Tuesday as price action rallied strongly. In a follow through, the precious metal rose to a fresh 10-month high earlier today with the intraday gains briefly testing the 1346.62 level. This marks the price level that we were anticipating to the upside following the breakout from the bullish flag pattern. A firm retest should trigger around the 1346 - 1347 level. As long as these resistance levels, gold prices could be seen posting a correction in the near term. The previously held support at 1321.50 remains the key target to the downside.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.