The US dollar posted strong gains on Tuesday as the two-day FOMC meeting got underway. The Fed will be announcing its rate plan decision and releasing the economic projections. Oil prices were also seen recovering from the recent surge. This came as Saudi officials announced plans that oil production would be back on track earlier than anticipated.
Euro Gains After ZEW Data
EUR/USD was seen rising strongly on the day. These gains came after the ZEW economic sentiment improved to -22.5. The data came better than expected. The Eurozone ZEW economic sentiment was also seen coming up better than the median expectations. The common currency gained despite the US dollar rising higher on the day.
EUR/USD Clears Resistance Level, More Gains Ahead?
EUR/USD was seen rising above 1.1030 resistance level. The gains came following the currency pair finding dynamic support off the trend line. However, price action will have to clear the near-term top formed at 1.1091. A close above this level will see further gains to the main resistance level of 1.1140.
Sterling Gains Despite No Brexit Breakthrough
The pound sterling was seen posting gains, regaining the lost bullish momentum. The gains in the currency came despite the EU officials noting that there was no major breakthrough with the UK on Brexit. This comes as UK officials laid out new plans to avoid the Irish backstop arrangement.
GBP/USD on Track to Test Resistance
The GBP/USD currency pair managed to post strong gains on the day. The reversal comes as price formed a higher low. The upside gains will see price action testing the resistance level of 1.2511–1.2533. However, we expect to see a possible reversal on the initial test of this level.
The precious metal continued to trade flat ahead of the Fed meeting today. The market risk sentiment was also rather mixed. But this sideways range could be breached following the outcome of today’s Fed meeting. The bias remains to the upside at the moment.
Will XAUUSD Breakout Higher
Gold prices are currently holding the sideways range of 1508–1485 for the moment. However, we expect a potential breakout to the upside. This could form a possible lower high to the longer-term trend. Alternately, a downside breakout will result in XAUUSD continuing the longer-term correction. The lower support is at 1431–1428 level.
